Category: Economy

The Wall Street Journal‘s editorial board writes this morning that the Bush recession has ended, that the market should be on it’s way to recovery. Housing prices have fallen 27%, the planet is awash in capital what with every government lowering their interest rates, stocks were priced for the recession last year, after the damage was assessed. So why hasn’t the economy begun recovering;

So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year’s fourth quarter.

What is new is the unveiling of Mr. Obama’s agenda and his approach to governance. Every new President has a finite stock of capital — financial and political — to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his “stimulus” spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.

His Treasury has been making a similar mistake with its financial bailout plans. The banking system needs to work through its losses, and one necessary use of public capital is to assist in burning down those bad assets as fast as possible. Yet most of Team Obama’s ministrations so far have gone toward triage and life support, rather than repair and recovery.

Instead of “investing” our tax money in the private sector where jobs are created, where tax revenue is generated, where our wealth lives, the Democrats, with the president in their van, are making threatening gestures at the pharmaceutical industry, and the healthcare business, in general. They’re spending the money on grasshopper research and bee insurance while plotting to grab up the private student loan business.

Earlier, I wrote that the president’s press secretary dismissed investors as “a small audience” – even though over half of Americans are invested in stocks and mutual funds. Gibbs said that Obama is working for a “larger audience” – how much larger of an audience do investors need to be to merit the administration’s attention?

James Taranto in Best of the Web Today recounts a nearly Stalinesque atmosphere in the White House with feted artists and lavish parties on the taxpayer’s dime and chiildish dismissals of our concerns;

The Dow Jones Industrial Average is down more than 50% since its October 2007 peak, and some 30% just since Election Day*. The president’s response? As we noted yesterday, he dismisses this relentless decline as “fits and starts.”

WSJ’s editorial concludes;

Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the weekend, we couldn’t help but wonder if they appreciate any of this. They seem preoccupied with going to the barricades against Republicans who wield little power, or picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want.

Perhaps they’re reading the polls and figure they have two or three years before voters stop blaming Republicans and Mr. Bush for the economy. Even if that’s right in the long run, in the meantime their assault on business and investors is delaying a recovery and ensuring that the expansion will be weaker than it should be when it finally does arrive.

All for the sake of erasing the Bush legacy.

According to the Washington Times this morning, our new president is having trouble keeping his free-spending Congressional cohorts in line so he can keep the promisies he made to voters last year;

House Majority Leader Steny H. Hoyer became the second leading congressional Democrat in a week to push back against Mr. Obama’s drive to curb member-directed earmarks on spending bills.

Saying he was open to the president’s “suggestions” about how to reform the spending process, the Maryland Democrat told reporters, “I don’t think the White House has the ability to tell us what to do. I hope you all got that down.”

His remark echoed a warning from Senate Majority Leader Harry Reid, Nevada Democrat, that the earmarks process is a congressional prerogative.

Emphasis is mine – in other words, Congress is going to do what it wants – despite the president. I guess they still think it’s Bush up there in the White House.

Yeah, here’s what Obama said in the campaign;

In case you missed it, this line was in there;

Obama and Biden will slash earmarks to no greater than year 1994 levels and ensure all spending decisions are open to the public.

Apparently Reid, Pelosi and Hoyer missed that part of the campaign. Are any of them looking around at the economy outside of the Beltway? Next year’s elections are going to be so much fun to watch.

In President Obama’s radio address today, he struck out at the half of the country who oppose his massive $3.6 trillion budget proposal casting himself in the role of populist crusader vowing to “fight for families” – you know that same drivel that lost Gore and Kerry their elections. From the Washington Times;

“I realize that passing this budget won’t be easy. Because it represents real and dramatic change, it also represents a threat to the status quo in Washington,” Mr. Obama said in his weekly video and radio address.

Mr. Obama’s language was combative and confrontational, as he promised to fight for “American families.”

“I know these steps won’t sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they’re gearing up for a fight as we speak. My message to them is this: So am I,” he said.

Well, it may represent change, but change for the sake of change isn’t always good, is it? But that’s what he won his election on – nebulous change. It’s funny, but I didn’t see any Washington lobbyists in Lafayette Park yesterday. There may have been, but I only saw regular Americans who took the afternoon to express their displeasure with Obama’s proposals. There weren’t any lobbyists in Lansing or St Louis – those were just regular people who see the folly in Obama’s plans. Just because you’re in charge, that doesn’t make you right.

“The system we have now might work for the powerful and well-connected interests that have run Washington for far too long, but I don’t. I work for the American people,” he said.

It also worked for people who went out and worked for a living without waiting for a hand out from the government – in fact, your whole plan depends on those who work to continue working just as they always have, while you suck them dry of any ambition or pride while you buy votes with the lazy and indigent masses looking for hand outs. Where’s your “fairness” now?