Tuesday, January 27, 2009

Boldly Go?

Is someone in the Obama Administration reading this blog?

Two days ago, we posted "On Economy, Not Obama's Style to Boldly Go Where No Man Has Gone Before". The post ended: "Be bold. Be Kirk."

Well! In checking out the proprietary Econblog Review Bloomberg Video Indicator this AM (which is neutral) with the morning cup, we see the video clip titled: "Geithner says Treasury to be Source of Bold Initiative".

Great! I won't overload the Dream Team with too many suggestions, but I will comment. Henry Paulson had a bold bazooka. Boldness in the maintenance of the status quo is no virtue.
(If you're under 50 and get that reference, good for you.) Think different (oh, I forget, Mr. Obama is into the B-berry, not the IPhone). Enough fooling around-you get the idea. If Mr. Obama wants durable approval ratings of 80%+ like Brazil's Lula, he should identify the Merchants of Debt as his ideological enemies and lead the nation forward under the banner of equity.

Moving on to the Big Boss himself, the President repeated his plea to Congress to push forward his $825 B "stimulus" plan, saying yesterday's layoffs prove the need for it to act with a "sense of urgency".

The take from this blogger is more nuanced and thoughtful (my wife always called me Spock). High-powered public Congressional hearings about this plan would be nice after TARP etc., which lacked any such thoughtfulness. Why (for example), after all the yelling by the Party now in power about the unfunded tax cuts pushed through during the last recession by the President whose name is now Mudd but whose middle initial was W (the latest possible shape of this recession), are some hundreds of billions less in receipts to the Federal Government suddenly a good idea? After all, back in the relatively sunny days pre- 9/11, U.S. Government finances were quite good (ignoring long-term entitlements); now, there is serious talk about default on the Federal debt. And while I have nothing against Caterpillar staying afloat, I remain skeptical that multi-year construction projects will do anything special about the current recession.

In that vein, DuPont, Texas Instruments and American Express have reported poor earnings and gave poor forward guidance. Yet the stocks are tipped to open higher. This continues to suggest that the market "knows" that we are in a severe recession. Recessions do end. Perhaps Mr. Obama's urgency for the Government to go into yet more debt has something to do with the fear that perhaps sooner than expected, the end of the recession will be predictable, and then America will channel its inner Perot and start wondering why the Feds are so into debt when ordinary Americans have learned the virtues of saving?

Copyright (C) Long Lake LLC 2009

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