A little too little and maybe a little too latePosted: January 9, 2009
As the details of Obamanomics finally roll out to the public, it is increasingly obvious that what we are seeing is some kind of Reaganomics lite. I mentioned this in a post on January 5th trying to answer Paul Krugman’s concerns on how ‘bold and swift’ the Obama plan will be. Today, Krugman answered strongly not bold enough in the Obama Gap.
But Mr. Obama’s prescription doesn’t live up to his diagnosis. The economic plan he’s offering isn’t as strong as his language about the economic threat. In fact, it falls well short of what’s needed.”
Today’s Market Watch outlines the abysmal labor market.
Total hours worked in the economy fell 1.1%, with the average workweek falling to the shortest ever, signaling an annualized decline of 6% in gross domestic product in the fourth quarter, wrote John Silvia, chief economist for Wachovia. Hours worked have declined “at an eye-watering” 7.7% annual pace in the quarter, Shepherdson said.
An alternative measure of unemployment that includes workers too discouraged to look for a job rose to 13.5% from 12.6% in November; it’s the highest in the 13 years since those data have been kept.
These are serious numbers that followed the even MORE serious numbers in manufacturing reported earlier in the week. Rather than repeat what I said earlier, I’d like to show some that I’m not alone out there in the liberal wilderness. Yes, I said LIBERAL wilderness. The Black Agenda Report which has never been in the Obama corner and endorsed Cynthia McKinney outlines Obama’s hostility to both Universal Health Care and what is traditionally the Democratic Party’s approach to the economy.
In a similar vein, “Obamanomics” at best falls short of the bold progressive initiatives and challenges to financial and corporate power required to spark equitable domestic development. As adjusted in response to the banking crisis and deepening recession, moreover, Obama’s economic program could well amount to “something akin to a national austerity program….” Instead of forward movement on jobs, education, retirement, and health care, Jack Rasmus finds, “what me may well get is ‘Let’s all tighten our belts to get through this crisis.”
Turning away from the op-ed pieces, let’s examine this front page headline from the NY Times: Senate Allies Fault Obama on Stimulus.
WASHINGTON — President-elect Barack Obama’s economic recovery plan ran into crossfire from his own party in Congress on Thursday, suggesting that quick passage of spending programs and tax cuts could require more time and negotiation than Democrats once hoped.
Senate Democrats complained that major components of his plan were not bold enough and urged more focus on creating jobs and rebuilding the nation’s energy infrastructure rather than cutting taxes.
So here we have more evidence that many are beginning to see that the Obama plan is not bold and will not be swift. Back on MarketWatch, we once again have the winds of cold, harsh reality hitting the face of any one connected to the U.S. Economy.
WASHINGTON (MarketWatch) — The U.S. recession will last two full years, with gross domestic product falling a cumulative 5%, said Nouriel Roubini, chairman of RGE Monitor. Roubini was one of the first economists to predict the recession and the credit crunch stemming from the housing bubble. For 2009, Roubini predicts GDP will fall 3.4%, with declines in every quarter of the year. The unemployment rate should peak at about 9% in early 2010, he said. Consumer prices will fall about 2% in 2009. Housing prices will probably overshoot, dropping 44% from the peak through mid-2010. “The U.S. economy cannot avoid a severe contraction that has already started and the policy response will have only a limited and delayed effect that will be felt more in 2010 than 2009,”
As we get more and more evidence that Obama’s actions never reach anywhere near the level of his rhetoric, will the koolaide start wearing off even before the President Elect gets to give his first State of the Union Address? I’m waiting to see if it comes any where near even one of FDR’s minor fireside chats.
Meanwhile, Senator Harkin from Iowa, the state where, oddly enough, I attended Herbert Hoover Elementary School had this to say in the Times article today.
“There is only one thing we have got to do in the stimulus, and that is how can we create jobs,” said Senator Tom Harkin, Democrat of Iowa, as he left the meeting. “I am a little concerned by the way that Mr. Summers and others are going at this in that, to me, it still looks like a little more of this trickle-down, if we just put it in at the top, it’s going to trickle down. A number of people in there said, ‘Look, we have got to have programs that actually create jobs and put people to work.’ ”
Okay, did Senator Harkin just call Obamanomics more trickle down economics, voodoo economics, Reaganomics? Can I get a witness? Again, it’s very hard to argue for business tax credits when most businesses are just looking for customers. If you don’t put the money into the hands of customers, a few tax credits here and there aren’t going to accomplish anything. There has to be income first.
Anyway, is it too early for me to buy an ‘I told You So’ bumper sticker for my poor worn-down mustang yet?
NOTE: For those of you into really snarky satire, there’s a post at today’s Daily Beast about Obama’s package being inadequate. Also, other blogs are discussing this same topic. Jane at FDL and even HuffPo have put up threads. The link to FDL is on the right side. I think you can manage to find the other on your own.