Why Obama Will "Own" The Recession
Clay
January 8, 2009
For eight decades, Democrats have successfully blamed Republican
Herbert Hoover for the decade-long Great Depression. That, even though
Franklin Roosevelt's New Deal failed to restore prosperity or
dramatically lower unemployment, and his tax increases in 1937 snuffed
out a nascent recovery.
Now today's Obamacrats are apparently going to try and Hooverize
President Bush in an effort to shield themselves from the potential
political fallout of a prolonged recession. It will take years to fix
the American economy, Obama says, and years of trillion-dollar budget
deficits to do it. And everyday it seems that Team Obama tries to
lower economic expectations, such as bearishly predicting that
unemployment would hit double-digits.
The not-so-subtle message in the middle of all these pessimistic
prognostications: When ya'll go to vote in 2010 and 2012 and a)
unemployment is still as high as it's been in decades, b) income
growth is sluggish at best, c) the budget deficit is running at a
trillion bucks a year, and d) stock prices remain stubbornly low --
hey, don't blame us, you can't rebuild Rome in a day or even in a
first term. Remember, Bush really left us a mess.
The incoming administration has apparently learned the lesson of
Bush's big mistake when arguing for the Iraq War, that when embarking
on a decision that will define your presidency, it's better to
underpromise and overdeliver. Of course, Obama has every reason to
honestly believe the economy is going to stay on the mat for a good
long time. According to the just-released minutes from the Federal
Reserve's December meeting, the central bank now thinks the economy
will "decline for 2009 as a whole" and that the jobless rate is
"likely to rise significantly into 2010." And in its new forecast, the
Congressional Budget Office said the U.S. economy is now in a
recession that "will probably be the longest and the deepest since
World War II." What's more, the CBO says, the economy will shrink 2.2.
percent this year and grow a wimpy 1.5 percent next year as
unemployment exceeds 9 percent. Finally, respected Harvard University
economist Kenneth Rogoff just released a paper demonstrating that the
aftermaths of financial crises are usually marked by "deep and lasting
effects on asset prices, output and employment. Unemployment rises and
housing price declines extend out for five and six years,
respectively." So the consenus is gloomy.
But can a repetitive "Blame Bush" mantra allow Democrats to hold their
huge Congressional majorities in 2010 and get Obama reelected in 2012
if they economy is as bad they think it will be? The latest iteration
of Obama's stimulus -- I mean "economic recovery" -- package indicates
that Team Obama has its doubts about voter patience and the economy.
The larger-than-expected tax cuts, even if they are really just
disguised government spending, are an effort to rejigger the plan to
provide more economic oomph this year. Indeed, as the CBO said when
Obama adviser Peter Orszag ran the joint, using infrastructure
spending to juice the economy is "totally impractical." There just
aren't enough "shovel-ready projects" to make effective use of the
hundreds of billions Obama wants to throw at the recession.
And Obama has good reason to doubt the patience of voters. Recall that
bad economies propelled Ronald Regan and Bill Clinton to the White
House -- and both gentlemen saw their respective parties suffer badly
in the very next midterm election because of voter economic anxiety.
To quote Oscar Rogers, the impatient "financial consultant" on
Saturday Night Live, American voters want Washington to "Fix it!" and
fix it fast.
And, really, how can Obama avoid taking responsibility when he will be
so actively meddling in the economy? It will be his decision to forego
deep and permanent new tax cuts, his decision to not extend the Bush
tax cuts, his decision on how to spend the remaining $350 billion in
TARP money, his decision to quasi-nationalize healthcare, his decision
to push a cap-and-trade carbon emission program and his decision to
spend hundreds of billions on a "green" industrial policy. It might
even be his decision to try and reunionize the American laborforce.
Obama will "own" the battered economy, perhaps almost literally, given
Uncle Sam's bailout binge.
So what standard should voters hold Obama to? How about this one: The
1981-82 recession last lasted 16 months and was followed by an
explosive recovery thanks largely to the Reagan tax cuts (even though
they were slowly implemented). The current downturn, according to the
National Bureau of Economic Research, started in December 2007. Mr.
Obama better hurry.
------------------
-C-
Clay
...
> Rush has been referring to this as "The Obama Recession" for months
> now.
>
> Really, got with the program.
Looks like an excellent message for you to send to the author.
Would you like James Pethokoukis' E-mail addy?
-C-
FDR
I'm surprised Rush hasn't referred to it as the Clinton recession.
Clay
...
I'm surprised your dumbass remembered to breath.
Too fucking funny.
-C-
tomcervo
> Now today's Obamacrats are apparently going to try and Hooverize
> President Bush in an effort to shield themselves from the potential
> political fallout of a prolonged recession.
UNEMPLOYMENT RATE
Then: 4.2% (Bureau of Labor Statistics, January 2001)
Now: 6.7% (Bureau of Labor Statistics, November 2008)
DOW JONES INDUSTRIAL AVERAGE
Then: 10,587 (close of Friday, Jan. 19, 2001)
Now: 9,015 (close of Tuesday, Jan. 6, 2009)
CONSUMER CONFIDENCE (1985=100)
Then: 115.7 (Conference Board, January 2001)
Now: 38.0, which is an all-time low (Conference Board, December
2008)
FAMILIES LIVING IN POVERTY
Then: 6.4 million (Census numbers for 2000)
Now: 7.6 million (Census numbers for 2007 -- most recent numbers
available)
AMERICANS WITHOUT HEALTH INSURANCE
Then: 39.8 million (Census numbers for 2000)
Now: 45.7 million (Census numbers for 2007 -- most recent
available)
U.S. BUDGET
Then: +236.2 billion (2000, Congressional Budget Office)
Now: -$1.2 trillion (projected figure for 2009, Congressional
Budget Office)
All Clinton's fault, I suppose? Oh, yeah, 9/11.
FDR
To be a good Republican you must not take responsibility.
The Weasel
> On Jan 8, 9:57 am, Clay <master_c...@outlookmail.com> wrote:
>
> > Now today's Obamacrats are apparently going to try and Hooverize
> > President Bush in an effort to shield themselves from the potential
> > political fallout of a prolonged recession.
Let's add in the change to a Democrat controlled Congress
> UNEMPLOYMENT RATE
> Then: 4.2% (Bureau of Labor Statistics, January 2001)
Dems become
the majority in
Congress: 4.7% (Bureau of Labor Statistics, January 2007)
> Now: 6.7% (Bureau of Labor Statistics, November 2008)
>
> DOW JONES INDUSTRIAL AVERAGE
> Then: 10,587 (close of Friday, Jan. 19, 2001)
Dems become
the majority in
Congress: 11,043.44 (close on Jan. 11, 2007)
> Now: 9,015 (close of Tuesday, Jan. 6, 2009)
>
> CONSUMER CONFIDENCE (1985=100)
> Then: 115.7 (Conference Board, January 2001)
Dems become
the majority in
Congress: : 110.2 (Conference Board, January 2007)
> Now: 38.0, which is an all-time low (Conference Board, December
> 2008)
>
> FAMILIES LIVING IN POVERTY
> Then: 6.4 million (Census numbers for 2000)
> Now: 7.6 million (Census numbers for 2007 -- most recent numbers
> available)
>
> AMERICANS WITHOUT HEALTH INSURANCE
> Then: 39.8 million (Census numbers for 2000)
> Now: 45.7 million (Census numbers for 2007 -- most recent
> available)
>
> U.S. BUDGET
> Then: +236.2 billion (2000, Congressional Budget Office)
Dems become
the majority in
Congress: -160.7 billion (Last Republican Budget 2007, Congressional
Budget Office)
> Now: -$1.2 trillion (projected figure for 2009, Congressional
> Budget Office)
>
> All Clinton's fault, I suppose? Oh, yeah, 9/11.
"Democrats are committed to ending years of irresponsible budget
policies that have produced historic deficits. Instead of piling
trillions of dollars of debt onto our children and grandchildren, we
will restore "Pay As You Go" budget discipline."
--Representative Nancy Pelosi (D-CA), Incoming House
Yeah, right.