Government Spending

Good Luck, America!

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The Beltwaytastic National Journal today was reborn as a new (and newly accessible) journalistic entity, with the requisite cover interview with the president of the United States of America to prove it. Here's what that fellow says about the economy, and economic policy:

NJ Let me start by asking you about the issue that's most on the minds of Americans: the economy. I'm wondering, absent any big change in policy, is there anything you see on the trajectory that would cause the economy, particularly jobs, to grow faster in the next year than they have been growing in the last year?

OBAMA Well, the American economy is massive, it's complicated, and so anybody who says they know exactly what the economy will do is probably overestimating their foresight. What we know is that we're coming out of the worst financial crisis and the worst recession since the Great Depression. So we've suffered a significant body blow. Because of the steps we've taken, the economy is now growing again, and we've seen nine consecutive months of private-sector job growth. Businesses are profitable and consumers are cautious, but they're spending. If businesses got more confident about demand being out there to justify their investments, and in turn that led to slightly increased spending, which then created a virtuous cycle, then you could see significant improvement in 2011 over 2010. But given the hole that we're in, it would still take a significantly long time to make up for the 8 million jobs that have been lost, so that's why we think it's still important to take those extra measures that can improve demand, give small businesses more confidence in terms of their ability to get financing. The steps we took in terms of cutting capital gains tax for start-ups, trying to accelerate business investment, allowing them to depreciate faster if they make those investments next year, those kinds of measures can potentially make a difference because even if all goes well, we lost 8 million jobs. The housing market is still very weak. And those headwinds are going to keep on blowing for some time to come. […]

[W]e've got some structural issues that we put off for a long time, and we're not going to transform overnight. What we have tried to do is to make sure we get started on some of those, that we get started addressing some of those structural issues knowing that the payoff is not going to be immediate, it's not going to be next year. The best example of that is probably the education issue. We used to rank first in the proportion of college graduates; we now rank ninth. We used to be at the top of the heap in math and science; we're now 21st and 25th in math and science when you look at the performance of 15-year-olds. So what we're doing with Race to the Top, what we're doing in terms of expanding student-loan programs, all those steps are designed to make sure that in this highly competitive environment, we're going to be better positioned. When it comes to manufacturing, the investments we made in research and development, particularly in sectors like clean energy that show promise for the future. Those aren't going to pay off immediately, but if we start positioning ourselves so that we're a leader in advanced battery manufacturing, we're a leader when it comes to solar and wind energy, then we have the opportunity once again to make up some of that ground that we lost over the last decade.

Note the centrality of the federal government at every stage above–in boosting demand (even though the multiplier is a myth), giving small businesses goodies (even though the resulting policy hurts taxpayers and businesses alike), strengthening the housing market (even though the political intolerability of declining housing prices is one of the key reasons we're in this mess), impacting education policy (even though Obama's ballyhooed rhetoric on this issue issue masks a terribly disappointing and big-spending performance), sloshing more money into student loans (even though signs point to increased defaults and a higher education bubble), and investing in clean tech (even though that failed the first time around, and the long-promised "green jobs" are literally countless).

Later in the interview Obama says, of the resurgent GOP, "I have yet to hear anybody, with the exception, to his credit, of Paul Ryan, give me any specifics on what exactly do they want to cut." Which is a fair enough point (if hyperbolized). But what about the president? Out of one side of his mouth he acknowledges that the fiscal situation of the country he presides over is "untenable." But out of the other, when talking about an economy that has far undershot the administration's own initial worst-case scenarios, he wants to keep throwing bad money after bad. The president and those within his bubble see zero connection between his massively interventionist economic policies and the massively disappointing economy. As long as that remains the case, there will be a growth market in political "restraining orders," no matter how crudely imagined.

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95 responses to “Good Luck, America!

  1. I’m still annoyed by the audacity of “We’re coming out of the worst financial crisis and the worst recession since the Great Depression”.

    If private-sector employment is growing slower than population growth, which it is, we’re not coming out of recession. Sorry.

    1. Sorry, but facts don’t sell as well as fear.

      1. Not with the never ending 50% off on Fear&tm; fire sale, they don’t.

        1. Oh good grief. The blinky flashy stuff, well, ok on that, but not even a TM thingee? FASCISTS!

          1. ?

            Nevermind. I submit myself for Nelson laughter.

  2. I have yet to hear anybody, with the exception, to his credit, of Paul Ryan, give me any specifics on what exactly do they want to cut.

    clean the wax out of your ears then

    1. Only establishment people’s suggestions count.

    2. Wax? Oh, so that’s what it is.

      1. It’s not wax, it’s the whole Henry Waxman shoved in there.

  3. OBAMA: Well, the American economy is massive, it’s complicated, and so anybody who says they know exactly what the economy will do is probably overestimating their foresight.

    Yet you said the stimulus would prevent unemployment from going above 8%. So now the economy is complex enough not to allow forecasts?

    What we have tried to do is to make sure we get started on some of those, that we get started addressing some of those structural issues knowing that the payoff is not going to be immediate, it’s not going to be next year.

    So much for not being able to forecast.

    1. He meant anybody outside of 50 miles from either coast.

      1. And especially NOT within 50 miles of the 3rd Coast.

    2. The supreme governing policy is cognitive dissonance.

    3. Modeling is not an exact science except when it used to prove man made global climate disruption.

    4. Shorter Skippy – ok, ya got me, I don’t have a clue what the hell is going on, but I’ll just keep talking and hope that you’ll get distracted by breaking news about LiLo. . .

    5. Yet you said the stimulus would prevent unemployment from going above 8%.

      For such an independent minded non-establishment type you sure do like your GOP talking points, OM. There are serious criticisms and there are non-serious ones, and this is the latter. Christina Romer made this prediction and has admitted that it was optimistic–so what is the argument here? That we’d have been better off without the stimulus? That doesn’t follow. Some predict we’d be upwards of 12% without it. All evidence suggests a larger stimulus was/is needed.

      1. “All evidence suggests a larger stimulus was/is needed.”

        And, what, exactly, is this “evidence”?

        1. An economy stabilized but not robustly growing. What caused the stabilizing?

          1. Construction layoffs and depreciated housing prices. You know, everything you guys have tried to prevent from happening.

        2. And, what, exactly, is this “evidence”?

          Krugman knows…

      2. Re: Tony,

        For such an independent minded non-establishment type you sure do like your GOP talking points, OM.

        Talking points – right.

        Christina Romer made this prediction and has admitted that it was optimistic–so what is the argument here?

        The argument is that the bill was sold on that very GOAL, Tony. You seem to forget that.

        That we’d have been better off without the stimulus? That doesn’t follow. Some predict we’d be upwards of 12% without it. All evidence suggests a larger stimulus was/is needed.

        You mean from the same people that touted their stimulus that failed its own goals?

        And this “all evidence suggests” red herring falls under the category of “pulling one out of my ass.”

        1. I have been reading reason.com for over a year and I got to give Tony credit for enjoying a good beating on a regualr basis. Only bad thing about Tony is that he has made me dislike my sock puppet, and when the wife always saying no, I ain’t getting much loving lately.

          BTW, I do get the mag in the mail once a month.

      3. Yep, and the people who say there would be 12% unemployment without the stimulus are using the EXACT SAME MODELS that Christina Romer used to get her 8% figure. So why the hell should anybody listen to them?

        Answer: They shouldn’t.

      4. “Christina Romer made this prediction and has admitted that it was optimistic”

        Admitted it was optimistic? No shit. You act like she had a choice, like she could have held her ground when unemployment hit 10.5%.

        She didn’t admit anything. She was proven wrong.

  4. your lips move, but i cannot hear what you’re saying.

  5. What the President has said is unimportant and we do not hear his words.

    1. Dammit, Barry, I’m a political operative not a policy wonk!

  6. Note the centrality of the federal government at every stage above?in boosting demand (even though the multiplier is a myth)

    Tell that to the pundits – they still peddle that tripe.

    Here’s a better article on the myth of the multiplier effect (not to be confused with the expansion of the money supply effect):

    http://mises.org/daily/1889

    In the Keynesian multiplier story the initial consumer expenditure creates new income for the next person, who in turn creates income for another person and so on. However, to have income for consumption one must first produce something useful that can be exchanged in the market[.]

    This economic truth totally discredits the notion that mere demand fuels supply, which would (logically) tell anybody that just giving people money would suddenly entice production.

    The amount of consumer goods that each individual can secure for himself is limited by the purchasing power of the stock of final consumer goods at the disposal of each individual.

    In other words, you can only consume if you have PRODUCED something first. In order to have money to buy things, you had to produce OTHER things you then exchange for money. You produce, you raise the overall “stock” of goods. Just giving you money does NOT increase the stock of goods, it just BIDS UP THE PRICES of the existing goods.

    The article teaches even the blockhead some very needed economics. I recommend it greatly.

    1. I don’t understand.

      1. It means your pants are on fire, Tony. Stop, drop, and roll, dude.

        1. Don’t tell him that.

          Let him burn! Let him burn!

      2. Re: Tony,

        I don’t believe you’re Tony.

    2. I’ve always thought what if two neighbors paid each other to mow their (same size) lawns instead of doing it themselves. The exact same amount of work would be done and same things (mowed lawns) ‘produced’, but economic activity would be increased(?). This seems like the policy many urge and always seemed a bit bizaare.

  7. Anyone else seen this article: http://www.bloomberg.com/news/…..uries.html

    I’m no economics major, but doesn’t this just prove that most of the companies that were bailed out probably didn’t need it? And that the government has simply discovered the wonders of semi-capitalism?

    1. Even if it’s true, it’s cherry-picked data. What about the billions shoveled into Fanny and Freddie? What’s “our” return on that “investment”?

    2. Yes, the government is indeed the best investment in town. The way it has cornered the market in so many different and diverse territories with a marketing campaign that should make all Madison Avenue admen feel like third string hacks in comparison, in so many different industries with an expertise that even the most ingenious of our industrialist of yore, and capitalist in our day can not possibly compare. They have put nearly all of their rivals in the poor house wearing barrels, and given to those who have smartly put their support in with their lot unprecedented returns and rewards. You would be a fool not to invest with government no matter how steep the initial investment in lawyers and lobbyist might perchance be.

  8. [W]e’ve got some structural issues that we put off for a long time, and we’re not going to transform overnight. What we have tried to do is to make sure we get started on some of those, that we get started addressing some of those structural issues knowing that the payoff is not going to be immediate, it’s not going to be next year.

    I find it helpful to envision him, as he says this, as a magician. dredging his brain for snippets of snappy patter as he watches the audience lose interest; tuxedo drenched with flop sweat, arm in the top hat up to the shoulder, desperately fumbling for a rabbit which is obviously not there.

  9. I think there is clearly a consensus among economists, from across the political spectrum, that if we just had more college graduates, we would have an abundance of jobs. That’s the ticket.

  10. The president and those within his bubble see zero connection between his massively interventionist economic policies and the massively disappointing economy.

    There’s a case to be made that what seemed to “work” for FDR has not worked not will ever work for anyone else, because FDR had the political advantage of helping repeal Prohibition, which amounted to a HUGE weight lifted from the back of America. This gave him the popularity that allowed him to get away with almost everything. Obama has not repealed his 18th Amendment yet, so he will not get away with his 3rd World economic policies.

    http://mises.org/daily/4797

    Roosevelt was inaugurated on March 4, 1933. After dealing with the banking crisis and the budget during his first week on the job, on March 13 he called on Congress to repeal Prohibition. On March 23, he signed the Cullen-Harrison Act, which legalized the sale in the United States of beer with an alcohol content of 3.2 percent.

    He wasted no time: he signed it one day after Congress passed it. He said with great ?lan, “I think this would be a good time for a beer.”

    Only then, on March 16, did FDR begin to work on his New Deal agenda. Then he had the wind at his back. It was a dramatic beginning to the end of one of the greatest legal calamities in American history: the hated Prohibition embodied in the 18th Amendment, which had been in effect for 13 violent years.

    So FDR had a lot of good political capital with his help of repealing one of the most destructive pieces of legislation ever created at that time. Does Obama have such great, uplifting achievement, besides being the first black president?

    1. He’s clean and articulate?

    2. Does Obama have such great, uplifting achievement, besides being the first black president?

      Well of course he does. He got the ever-popular stimu…er, he got cap and tr…um, he got health care ref…saved the auto in…green jo…climate cha…

      Aw, fuck it. RACIST!!!!!

    3. Aha, so he clearly needs to end the War on Drugs!

      1. One of the simplest solutions if accompanied with the requisite cuts in government spending that accompanied the WoD. The direct amount would be well over $100B from the feds alone, and the trickle-down effect would help states cut costs as well. Too bad those “costs” are often the salaries of union correction officers, sheriff’s deputies, local cops, social workers and myriad other agencies.

        1. The reduced cost of not enforcing the laws combined with the increased income from taxing the stuff would go a long ways to fixing our fiscal problems. I have never understood why the tax money argument doesn’t work better. I think “make the fucking dopers pay for it” sounds like a good campaign slogan.

          1. Seriously though, why not? Someone really could campaign on that. “Why should thuggish drug dealers be making all the money? Let mom and pop stores boost their income from drug sales, while turning over a chunk of money in taxes to help control the deficit.” It’s win win win.

            1. Me, I’m still waiting on our ‘first Black President’. This shill is fucking Elmer Gantry.

              p.s. – the numbers argument on Repeal is a bit of a Red Herring, with the numbers from both sides being wildly over or understated. We won’t know for sure until after it happens, when market prices and Puritanical ‘sin’ taxes have stabilized. . .to be sure, given the actual costs of production, even for high grade hydro, the only thing that’s certain is we’ll probably be saying bye bye to $400/oz pricetags.

            2. Well, it’s not exactly a win win win, but it’s definitely a move in the right direction. I’m not a huge fan of the “legalize it so we can tax the fuck out of it,” but that would certainly be better than the status quo.

              Also, I don’t know how they could put a federal tax on it. That would mean two different pieces of legislation. One, taking it off the Schedule 1 list of the CSA, and two, setting a tax rate and means for collection. Also, won’t taking it off the CSA only allow states to legalize it? It couldn’t compel them to, could it? (As an aside, that would create some real competition between states for tourism, entertainment, etc.) Another issue would be prohibiting positive drug tests from the hiring process. Since states have to recognize rights of the other states, wouldn’t they be prohibited from using a positive pre-employment drug screen in the hiring process for a person who legally smoked up in a state that allows it? Based on the collective level of intelligence of our House and Senate, the process would be comedy gold for C-Span.

              1. the process would be comedy gold for C-Span.

                Or an excuse to run to the freezer for a moon shaped ice cube to gouge ones eyes out with. . .

              2. Why are you advocating prohibition of drug testing from the hiring process?

                Are you trying to tell me that I, as an employer, don’t have the right to decide who I do or don’t want to hire? Let my business succeed or fail because I am limiting my labor force (among other business decisions). Keep your nose out of my hiring process.

                1. No, but the whole reason drug use is a disqualifier is because it’s illegal. I don’t want to see it used as a part of the process at all, but especially if someone does something perfectly legal.

                  Unfortunately for me, this is a losing argument as you should have the right to hire whoever you want. I just realized I was still arguing against freedom for the owner to hire whoever he wants to.

                  Fuck. How do we balance the two rights with each other? In this case I guess I have to agree that you’re right.

                  1. Fuck. How do we balance the two rights with each other? In this case I guess I have to agree that you’re right.

                    And this is why libertarians are so much more appealing than both progressives and neocons. We have the ability to see error in our argument and concede defeat, or at the very least adapt the argument we are using to meet the new challenges to it.

          2. The reduced cost of not enforcing the laws combined with the increased income from taxing the stuff would go a long ways to fixing our fiscal problems.

            The treasurer of a voluntary professional association I’m a part of stole $5,000 from the bank account. 7 to 10 days for a detective to get on the case.

    4. I was the first black president!

      Barack Obama fulfilled John Kerry’s dream of becoming the second black president.

      1. I thought Warren Harding was the first.

      2. Honestly if somehow Obama earnestly ended the War on Drugs I’d forgive so much of the bullshit. Unfortunately, that fiction is so far removed from reality that it is absurd. Someday, ending the WoD will boost political capital and thus be the thing to do in office. Alas, not today.

  11. Later in the interview Obama says, of the resurgent GOP, “I have yet to hear anybody, with the exception, to his credit, of Paul Ryan, give me any specifics on what exactly do they want to cut.”

    The president should read Hit and Run. I and many others have outlined numerous areas to cut, including, but hardly limited to, Social Security, Medicare, Defense, other entitlements and discretionary spending.

    Of course all of these cuts will piss off some voters and would thus require a leader with some balls to enact.

    The fiscal future doesn’t look too good, does it?

  12. Typo in article: “clean tech” not “clean teach” (bet that was auto” corrected”. My spell check suggests I replace wifi with wife. Not in a million years…)

    1. top 10 reasons why you should password protect your wife.

  13. Later in the interview Obama says, of the resurgent GOP, “I have yet to hear anybody, with the exception, to his credit, of Paul Ryan, give me any specifics on what exactly do they want to cut.”

    The president should read Hit and Run. I and many others have outlined numerous areas to cut, including, but hardly limited to, Social Security, Medicare, Defense, other entitlements and discretionary spending.

    Of course all of these cuts will piss off some voters and would thus require a leader with some balls to enact.

    The fiscal future doesn’t look too good, does it?

    1. Its hard to hear any opposing point of view when you[Obama] have your hands covering your ears while screaming la la la la la I can’t hear you…la la la…

    2. The president should read Hit and Run.

      The President does read H&R. As a matter of fact, he reads it daily if his schedule permits. However, he stands by his assertion that “I have yet to hear anybody … give me any specifics on what exactly do they want to cut.”

      1. I specifically propose a reduction in Presidential Staff. Starting with you, Mr. Pibbs. Or Nibbs, or however you spell your name, you most-likely to be caught with a sheep Press Secretary.

  14. Well, the American economy is massive, it’s complicated, and so anybody who says they know exactly what the economy will do is probably overestimating their foresight.

    No one says he knows “exactly” what the economy will do. No one.

    People do, however, project. And we know your people suck at it.

    1. No one says he knows “exactly” what the economy will do. No one.

      There are plenty of people out there, some with Nobel Prizes, who say they know exactly what to do. The problem is that Obama did listen to them and their Keynesian-fantasyland ideas.

      1. Krugman says he can’t be held responsible for the failure because we didn’t follow his plan exactly. Kind of like any party secretly holding doubts prevents ghosts from showing up at a seance.

      2. The failure with Keynesians, Socialsit, and marxist in general is their failure to come to terms with the fact they cannot predict let alone legislate/dictate human nature.

        Marx diabolically left human nature out of the equation and it is exactly that reason socialism in all its forms leads to epic fail, also the reason the next socialist believes they’ll be The One to get it right THIS TIME!

        1. Every business plan has forecasts.

        2. You spelled “Socialsit” wrong: FIFY: Socialshit.

        3. The main failure of Keynesian economics is that it is impossible to implement, even if it actually worked. (Maybe if we lived in the Left’s wetdream fantasy kingdom, a dictatorship run by Czar Krugman.) Otherwise, politicians use this solely as a rationale to shower money on their preferred constituents.

    2. I have a similar problem: I misunderestimate my powers of foresight.

  15. “When I was a kid my father said to me, ‘You’re too damn big to be going trick-or-treating. You’re done,” Eckert said. “When that doesn’t happen, then that’s reason for the city governments to intervene.”

    Waaahh, my teenage kid won’t listen to me! Someone call city council!

  16. the American economy is massive, it’s complicated, and so anybody who says they know exactly what the economy will do is probably overestimating their foresight.

    But remember, children…

    Because of the steps we’ve taken, the economy is now growing again

    1. Because despite the steps we’ve taken, the economy is now growing again (sort of)

  17. Despite this article and it’s “on the other side of his mouth”. They fail to see that although the economy remains challenging, President Obama is working hard to fix a problem that was created by the Bush administration. Give him more time to fix it, he deserves it

    1. Re: Luis Guerrero,,

      Give him more time to fix it, he deserves it[.]

      Ha ha ha! That was funny! +1

      Uh . . . You’re joking, right??

      1. Reelect Obama in 2012. He deserves it, and deserves it good and hard.

    2. I’m thinking that we’re starting to see some of those “cable news” viewers show up here in Comments.

      For those who wandered over here from MSNBC:

      The regulars are fully aware of the Standard-Issue Talking Points, and treat them with derision when they bother to react at all.

      Around here, you need to do better. Frothing rage is always welcome. Bizarre conspiracy theories are good. Links to obscure yet entertaining whackjobs or subcultures are perhaps the best way to fit in quickly, though.

    3. Give him more time to fix it, he deserves it

      But we dont.

    4. LMFAO. He wouldn’t know how to fix his toilet if it started to run. This man has never run a business, never held an honest job, never tended to anything other than his own advancement. I love people like this, that think because Obama has a lovely voice and is ethnically trendy, he will be some postmodern genius of a leader. What he is is a joke….

  18. CHANGE!

    Hey I like that slogan, Change!

    Change is about to hit you Libs upside the head….

  19. When your only tool is a hammer, everything looks like a nail.

    Replace “hammer” with “government spending” …

  20. Maybe the reason that Obama considers these issues from the point of view of actionable items for the Federal government is because he is in charge of it?

    When you’re a hammer, you tend to focus on the nails.

  21. NJ Let me start by asking you about the issue that’s most on the minds of Americans: the economy. I’m wondering, absent any big change in policy, is there anything you see on the trajectory that would cause the economy, particularly jobs, to grow faster in the next year than they have been growing in the last year?

    OBAMA: Can’t I just finish my waffle?

  22. Obama and the loony left wing of the Democrat party must be the only species on the face of the earth that cannot or will not learn from experience, even Animals learn from experience!

    The Socialist countries in Europe , Britain, France, Germany, Greece etc. have finally recognized Socialism and the Welfare State with unlimited immigration of uneducated third world parasites flooding in to get on the public dole does not work and are cutting back government, including numbers, wages, & benefits in order to survive as a Nation and returning to capitalism.

    While here in the USA Obama and the Democrats are hell bent on taking theUSA to a welfare socialist paradise in spite of proof all over the world and in the failed Blue States here that it does not work.

    Illinois, Calif, New York, New Jersey, all Blue States that have been controlled by Democrat Majorities for years and long enough to try there taxing, spending and vote buying of public union members by giving wages and benefits that is bankrupting the government while pandering to illegal Aliens, and welfare leeches, are now seeing the results, all are bordering on bankruptcy.

    Now Obama is following the same blueprint on a vastly bigger scale for the rest of American using 100,s of billion of the simulate money to reward Democrat supporters and to keep the under worked and overpaid public union in jobs and buy Workfare & Welfare votes!

    The same multi-trillion dollar con job Obama is attempting, by giving Amnesty to the invading horde of Criminals & Uneducated Prolific breeding third world parasites & with chain immigration all the ones still left in Mexico to buy 10,s of millions of welfare votes for the Democrat party with money borrowed from China while bankrupting this Nation.

    With the future & further goal of turning the USA into a Spanish speaking Third World Slum modeled on Mexico but controlled Lock, Stock & Barrel by the Socialist/Democrat party Dictatorship of the United Sates of Mexico!

  23. I really get the feeling that if you asked Obama to explain what he’s trying to say he wouldn’t have a clue. In his mind he’d be thinking “I dont know. Its just what they told me to say.” American confidence in this guy will be close to zero by the time boot him.

    1. That’s what the teleprompter is for. Now for the life of me I can’t figure who is typing all that garbage onto it. It can’t be all him and Team Alinsky. So who really is pulling the puppet strings?

  24. the president, i’m afraid, is a horse’s ass. he is nothing but a reasonably intelligent charmer with a lovely voice and a talent for reading off of a teleprompter. but as a leader, he is a narcissistic flop, a delusional caricature, an arrogant, intolerant, divisive joke. Nov 2nd, hurry up and arrive….

  25. Thanks Matt. This is the elephant in the room which this magazine and libertarians in general have some primordial need to ignore.

  26. good job….thank you…..

  27. what’s the really fact~~TYF220GDH

  28. just said what you want to say DT45DIFD

  29. you said you are to tired DT45DIFD

  30. mark here DT45DIFD

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