It's only been a few weeks since Obama made his acceptance speech in Grant Park, here in Chicago. If it was any other time, he'd still be working on getting into the swing of things.
However, this isn't "any other time." First black president and he's also got to be America's best president it seems, after taking office during one of the worst economic crises since the Great Depression (a time which demanded immediate action.)
In the weeks after November 4th, I was anticipating that Obama was going to be able, with the help of the Bush administration and republicans, start working on fixing the monumental problems the country was facing. Though, when those problems were caused, or completely ignored, by said republicans and administration, I should have known that wouldn't be the case. In fact, he was facing dishonesty and circumvention.
So now, the man who ran on "change" and "hope" for bipartisanship and working together, is on his own to solve the biggest problems the country has had to face in recent history, exacerbated by being allowed to fester due to inactivity from the time he won to the time he took office.
And like I said, had it been any other president, any other time, it would be far too early to be giving report cards, but in such a frightening economic climate, a progress report is due.
So how is he doing?
By most peoples' norms he's doing well. Especially when you think of what McCain and Palin would have done to us by now.
"Not since FDR has a new president moved so aggressively on the economic front." - Paul Krugman (Nobel Prize winning economist.)
However, "good" just ain't good enough right now. The frightening thing is the intensity of the economic crisis. How unstable it is, how far it's gone, and how far it has to go to get back to being just alright. The fear is that any misstep could send it spiraling into oblivion. Considering it began as the bust of the housing market and somehow transformed into the entire financial system falling in on itself. What began as the United States economic turmoil has now gone global since slashed spending has caused industrial production to fall in many other countries. Plummeting stock and home prices have eaten away at years of savings. The banks are crippled from the losses of houses and debt defaults. And so on.
And in this state of confusion and dilated pupils as we stare into the horror of helplessness, we are forced to hope that our government will pull us out. It's hard to do based on the cynicism created by the last 8 years. You can't trust something that's been known to betray. And without effective action from the Obama administration, this may just be the tip of the iceberg. To push spending, the Federal Reserve has lowered interest rates to near zero and has helped to finance almost everything from assets backed by credit-card debt to the operations of insurance companies. And sure, this may ease some of the credit crunch, but it's nowhere near what all needs to be done.
And so it lies on the shoulders of Mr. "Yes, we can."
I bet he's rethinking that slogan. (Changed to, "Oh, no he di'int! *finger snap*")
According to Mr. Krugman, there are three things the government can do to better address the current economic situation.
1. Offer help to the victims of the crisis, the goal being to diminish their suffering.
This can happen in a number of ways from widening unemployment benefits to rewriting mortgage terms.
2. Act to support the overall level of spending
It can either spend the money itself or give it to individuals or businesses in hopes that they'll spend it.
3. Step in to rescue and sustain key institutions crippled by the crisis
This is especially important for banks because the economy depends on their continuing ability to lend.
To an extent, the government can do well by simply helping out the unemployed to boost consumer spending, helping homeowners to strengthen banks, to which a stronger economy will reduce the number of victims.
The Obama administration has gone through with two of these. But it hasn't done enough with either and has so far balked at the third.
The best policy thus far is the homeowner-relief package. The gov't will cut rates on millions of the mortgages made by Fannie Mae and Freddie Mac, the government sponsored and government owned (since they were nationalized last year) lenders. They will also offer subsidies and guarantees to private lenders who restructure mortgages.
That plan alone will help many people. But it will only make a dent in the overall problem.
The stimulus bill is a bigger deal. It consists of $757 billion in economic support, most of it in over two years. Not only will the bill do a lot to support the economy, it will also help aid the victims in increasing unemployment benefits by allowing unemployed workers to maintain their health insurance and helping state gov'ts to pay for Medicaid and education.
And the stimulus bill as it is, is impressive, but it's much smaller than what was recommended. Many called for at least $800 billion in the first year alone, which is more than twice as large as the current bill, with many more tax cuts.
So why didn't Obama go with such a plan? Part of it was that officials wanted spending to focus on projects that would allow for quick employment to boost the economy. But there just aren't that many projects. I mean, most projects that people can come up with will take years to get under way. As things are now, more than half of the "discretionary spending" (things like infrastructure) are said to not take place until September 2010.
That sounds horrible, but it's not that bad considering people expect the economy to be shitty for years and unemployment rates to stay above average well into 2011.
It was also very possible to provide a lot more aid to victims and states. State governments were projecting deficits of $350 billion over the next two and a half years before the bill was passed. These deficits will be treated by cutting spending and increasing taxes. This will lead to the reduction of vital services, furthering the depression. The stimulus bill currently only makes up about 40% of this gap. A significant help, but what about the other 60%?
The fact that the bill is so small in comparison to recomendations, directly reflects politics and the misjudgements of the president and his advisors.
So, while I support Obama and am glad that he won vs. McCain, I feel he's being way too timid in the way he's dealing with the current economic climate.
However, this isn't "any other time." First black president and he's also got to be America's best president it seems, after taking office during one of the worst economic crises since the Great Depression (a time which demanded immediate action.)
In the weeks after November 4th, I was anticipating that Obama was going to be able, with the help of the Bush administration and republicans, start working on fixing the monumental problems the country was facing. Though, when those problems were caused, or completely ignored, by said republicans and administration, I should have known that wouldn't be the case. In fact, he was facing dishonesty and circumvention.
So now, the man who ran on "change" and "hope" for bipartisanship and working together, is on his own to solve the biggest problems the country has had to face in recent history, exacerbated by being allowed to fester due to inactivity from the time he won to the time he took office.
And like I said, had it been any other president, any other time, it would be far too early to be giving report cards, but in such a frightening economic climate, a progress report is due.
So how is he doing?
By most peoples' norms he's doing well. Especially when you think of what McCain and Palin would have done to us by now.
"Not since FDR has a new president moved so aggressively on the economic front." - Paul Krugman (Nobel Prize winning economist.)
However, "good" just ain't good enough right now. The frightening thing is the intensity of the economic crisis. How unstable it is, how far it's gone, and how far it has to go to get back to being just alright. The fear is that any misstep could send it spiraling into oblivion. Considering it began as the bust of the housing market and somehow transformed into the entire financial system falling in on itself. What began as the United States economic turmoil has now gone global since slashed spending has caused industrial production to fall in many other countries. Plummeting stock and home prices have eaten away at years of savings. The banks are crippled from the losses of houses and debt defaults. And so on.
And in this state of confusion and dilated pupils as we stare into the horror of helplessness, we are forced to hope that our government will pull us out. It's hard to do based on the cynicism created by the last 8 years. You can't trust something that's been known to betray. And without effective action from the Obama administration, this may just be the tip of the iceberg. To push spending, the Federal Reserve has lowered interest rates to near zero and has helped to finance almost everything from assets backed by credit-card debt to the operations of insurance companies. And sure, this may ease some of the credit crunch, but it's nowhere near what all needs to be done.
And so it lies on the shoulders of Mr. "Yes, we can."
I bet he's rethinking that slogan. (Changed to, "Oh, no he di'int! *finger snap*")
According to Mr. Krugman, there are three things the government can do to better address the current economic situation.
1. Offer help to the victims of the crisis, the goal being to diminish their suffering.
This can happen in a number of ways from widening unemployment benefits to rewriting mortgage terms.
2. Act to support the overall level of spending
It can either spend the money itself or give it to individuals or businesses in hopes that they'll spend it.
3. Step in to rescue and sustain key institutions crippled by the crisis
This is especially important for banks because the economy depends on their continuing ability to lend.
To an extent, the government can do well by simply helping out the unemployed to boost consumer spending, helping homeowners to strengthen banks, to which a stronger economy will reduce the number of victims.
The Obama administration has gone through with two of these. But it hasn't done enough with either and has so far balked at the third.
The best policy thus far is the homeowner-relief package. The gov't will cut rates on millions of the mortgages made by Fannie Mae and Freddie Mac, the government sponsored and government owned (since they were nationalized last year) lenders. They will also offer subsidies and guarantees to private lenders who restructure mortgages.
That plan alone will help many people. But it will only make a dent in the overall problem.
The stimulus bill is a bigger deal. It consists of $757 billion in economic support, most of it in over two years. Not only will the bill do a lot to support the economy, it will also help aid the victims in increasing unemployment benefits by allowing unemployed workers to maintain their health insurance and helping state gov'ts to pay for Medicaid and education.
And the stimulus bill as it is, is impressive, but it's much smaller than what was recommended. Many called for at least $800 billion in the first year alone, which is more than twice as large as the current bill, with many more tax cuts.
So why didn't Obama go with such a plan? Part of it was that officials wanted spending to focus on projects that would allow for quick employment to boost the economy. But there just aren't that many projects. I mean, most projects that people can come up with will take years to get under way. As things are now, more than half of the "discretionary spending" (things like infrastructure) are said to not take place until September 2010.
That sounds horrible, but it's not that bad considering people expect the economy to be shitty for years and unemployment rates to stay above average well into 2011.
It was also very possible to provide a lot more aid to victims and states. State governments were projecting deficits of $350 billion over the next two and a half years before the bill was passed. These deficits will be treated by cutting spending and increasing taxes. This will lead to the reduction of vital services, furthering the depression. The stimulus bill currently only makes up about 40% of this gap. A significant help, but what about the other 60%?
The fact that the bill is so small in comparison to recomendations, directly reflects politics and the misjudgements of the president and his advisors.
So, while I support Obama and am glad that he won vs. McCain, I feel he's being way too timid in the way he's dealing with the current economic climate.
