Sunday, August 23, 2009

Obama and the Economy -- Now What?

It is now very clear that the economy is far worse than the Obama crowd thought as recently as late January. Unemployment, which Obama economists forecasted to remain below 8.5 % is currently 9.4 %, headed north. Obama economists, last week, dramatically raised their estimates of the path of the national debt, increasing the national debt (increase) estimates for 2019 from $7.1 Trillion to $ 9 Trillion. This $ 9 Trillion is on top of the existing national debt of nearly $ 8 Trillion.

No doubt, these numbers are still underestimates. Other than Obama economists, no serious economists had subscribed to the Obama numbers in the first place. Certainly not the Democrat-controlled Congressional Budget Office economists. The CBO has been citing the $ 9 Trillion number since January, when the Obama economists were insisting on living in fantasy land. Now the dreams are over and the haunting reality is that we are soon to push through ten percent unemployment and the national debt is exploding.

What of the stimulus? There was never any real stimulus in the so-called "stimulus" package. So, don't count on that. The bill that passed Congress and was called "stimulus" was mostly a redistribution package benefitting friends of Obama and penalizing his enemies. That doesn't stimulate anything (especially since most people who provide jobs in American are viewed by Obama as his enemies). The economy has stabilized on its own, as economies always do. Nothing the government has done has been of any benefit whatsoever. The only people that believe that the government has helped are the folks in the media, who will believe anything.

The stark reality is that there has been no "recovery" package ever put on the table. Nothing in any of the Obama Administration proposals would ever encourage anyone to hire anyone. Without hiring, there can be no serious recovery. At what point is the Administration going to get that message? Cap and trade does for energy what burning this year's corn crop would do for household nutrition. All of the Obama plans are punitive (except those that provide money for Acorn to support pro-Obama demonstrators at the town halls).

Punitive measures design to punish businesses and business people are the main policy initiatives of this Administration. Is this likely to boost hiring?

So, now, here we are. What does Obama intend now that his polls have collapsed, his major policy proposals are in complete disarry, and the economy is getting worse? Maybe he can find some way to continue to pin his problems on "W" and the evil financial community.

Incidentally, commercial real estate is now suffering the same fate as residential real estate has been suffering for several years. Can you blame the collapse in commercial real estate on predatory lenders?

You wonder if Obama didn't have someone to blame for our economic troubles, then he wouldn't know how to proceed. Obama looks for enemies, someone to blame. There always has to be someone he can blame and then punish with legislation. How does that kind of policy stimulate anything?

When will this hubris end? It is past time for the Obama folks to put something rational on the table. Look for the economy to get worse not better as long as the Obama folks maintain this course.