Isn’t it interesting that yesterday the President elect treated us to a huge statement on his economic policy, shortly after telling us that he cannot comment on the Israeli/Palestine conflict because you can only have one President at a time?
The one President at a time doctrine clearly only applies to tricky issues where the President elect does not wish to come off the fence. I find that disappointing. If he wishes to be fresh, honest and new, he should avoid such disingenuous explanations of why he is very selective in making Presidential announcements. He is going to have to tell us what he thinks of the Middle East crisis in a few days time, so why the delay? What is Mrs Clinton doing?
The content of the economic statement was no surprise, and builds on the Bush approach of excessive state spending and borrowing. It is a balanced package, in the sense that some of the money is borrowed to offer tax breaks which Republicans might favour, and some to increase spending that Democrats might favour. The Greens too do not get it all their own way. Whilst the package sensibly wishes to spend on improving the USA’s reliance on its own renewable energy sources to cut imported oil, it also favours road building.
Will it work? Yes it will create some new jobs, and in the short term the US government can probably raise the money at low rates of interest. No it will not of itself lift the economy out of recession. That rests on monetary policy and the state of the banking system.
January 9, 2009
This was the message given in Virginia last night by Barack Obama who delivered a heartfelt flawless speech which has enormous implications for the whole world.
He promised change, and part of that change was a 1,000 bucks tax refund to “every tax payer”. People need money in their pockets, he said, and this is true if governments want to help both them and the economy. Businesses need loan guarantees too, and there must be an end to the “greed” and of the “thumb on the economic scale” philosophy which got us here. Governments must stop wasting money on schemes which don’t work and which they make for political gesture and it “must start in Washington” as economies around the world are looking for America to show a lead.
Obama talks sense. Complete sense, when he says if we don’t take “immediate and decisive action then unemployment will be into double digits and recovery from this recession will take years for the American economy”. “We can get through this” he said, “We’ve confronted bigger problems such as war and depression and fear itself as a nation by coming together in common purpose”, as he began to launch his vision of mass public works “like no other”. “This is not your normal public works programme and narrow party interests should be put to oneside”. They are separate to this recovery plan”.
He said regulation has to be in place so people know where their tax dollars are being spent. “Checking online”, and the cause of this was mans own creation and as he stood there, he told the world that man could put right what we had done for it was us who made the problem, but it would take time.
Now we move to what our own leaders are doing and we see no tax cuts, no change in the regulations, no self interest “thumb on the scale greed” being changed, and no mass public works. We see an interest rate reduction, a pointless wasteful VAT reduction, bailouts for the banks but nothing into “people’s pockets” except an increase to the winter allowance for pensioners. A cynical political decision which is the opposite of what Obama was asking.
Gordon Brown is not taking a lead in engineering the essence of recovery because only through “money into people’s pockets”, and a rush of “immediate” public works, and a stop to “government waste”, can sufficient confidence be restored in our economy to help to create demand and spending and borrowing again.
Roll on April for the G20 summit where Obama will again take the lead with his team of economic advisers, but by then we’ll have lost another 600,000 jobs and will be well into our recession.
Incidentally, Gordon Brown is saying he intends to bring something forward “in a few weeks”, to make banks lend again. Yet he’s been saying this for a “few weeks”.
When April comes and the G20 summit is over, watch for what Brown says then of “his plans”, which I just know will be paraded as his own which have “saved the world”. Obama’s plan must be gotten on with “immediately”, like he said, if things are going to change for the better.
I don’t see a problem with him saying that other areas of decision are for the man in charge but our entire economy must be tackled immediately. He made that his reason as far as I heard.
January 9, 2009
You only have to look at the long list of tired and corrupt old hacks appointed to serve in the Obama administration to see that “fresh, honest and new” are not words which can be used to describe them in any shape or form. Will Obama’s be the most disappointing administration even before they get into Government? Obama already seems well on his way to letting down his voters in the most callous way imaginable. Same old, same old .. (repeat ad infinitum).
January 9, 2009
The bit about spending money on windmills is precisely the sort of token move in the wrong direction I mentioned previously. Windmills are expensive & more importantly, useless. This compares very unfavourably with Palin’s promise that a McCain presidency would start the building of nuclear power stations in January.
January 9, 2009
And us Brits?
We have no more army left now to offer in the coming war with Persia/Afghanistan. (It was war with Persia that laid the Roman Empire open to Islam and all but destroyed it).
So what right have we to say anything about or to the world’s Policeman? They are not listening.
January 10, 2009
Don’t forget the EU’s Eastward Expansion, putting missiles on russias border which is deliberate Provocation.
The One worlders want war with Russia too, Venezuela, Iran, Nth Korea and Syria.
I don’t believe the Russians mean us harm, nor Iran and if we invest in our Armed forces we could gaurantee it.
I believe Nato’s and the EU NWO expansionist Empire is the real problem we face in the World.
This wold have been Real change.
http://uk.youtube.com/watch?v=FG2PUZoukfA
January 10, 2009
Will it work?
Yes, it will work. Having $1 trillion a year deficits for the forseeable future will definitely work at completely destroying the dollar.
All it’s going to take is for one Asian country with a significant amount of US Treasury bills to start selling these while the price is still high, to get out of the door before the rest wake up and realise that the bond bubble is about to burst. America is bankrupt and cannot afford to repay its debts except with increasingly worthless Fed printing-press paper. And when everyone finally realises this, the flood to the exits will begin, the Chinese will break their Yuan peg, and the dollar will be finished in less time than it takes Gordon Brown to say ‘global economic crisis’.
Obviously, this will all be blamed on ‘capitalism’ rather than state mercantilism and Keynesianism, and the answer will be even more Obama-socialism, but I think Obama’s recent ‘One President’ speech signalled the end of America as we know it.
His honeymoon will be over before the end of the summer. The dollar will be finished before the end of his first term. Obama clearly has no idea what he’s doing, and I increasingly get the feeling that even he, the Blessed One, is beginning to realise this. You never know, he might even call in Peter Schiff or Jim Rogers before it’s all over, but it’s far more likely that he’ll keep phoning up the lunatic Keynesian Paul Krugman.
Of course, increasing government debt, bleeding the private wealth-producing sector to pump up useless government consumption, and building over-priced bridges to nowhere, to pay off building companies for political donations, would never be contemplated anywhere intelligent, such as Britain! 🙂
January 11, 2009
You are one of the very first people on this blog to put this so frankly and openly. Scary words! But that does not stop them being right. “One with Nineveh and Tyre….”