I say yes, here is why:
-the decision to keep GM and Chrysler alive (and out of bankruptcy) is like keeping a corpse on life support-instead of allowing the companies to break the ruinous labor contracts they are shackled with, they continue on, paying labor rates that will keep them losing market share and money
-allowing the crooks on Wall Street to profit hugely, while paying for their mistakes-this means that while the Goldman-Sachs VPs get huge bonuses, they will continue misinvestments (the latest thing is stock market hypertrading)
-the enormous deficits and huge balance of payments deficits will weaken the dollar and drive up the cost of energy
-China will now dictate much US policy; our masters in Beijing will continue the dismantling of US manufacturing -meanwhile, jobs move to China
-we are staying in all of these stupid post WWII alliances, which means we are keeping bases (that we cannot afford) around the world
-Obama’s health care “reforms” are not reforms at all-there is no reform of the medical torts issues which are driving up the cost of care. Meanwhile, the staggering cost of universal health care will suck more investment capital out of the economy.
In sum Obama is counteracting the forces that would normally move the economy out of recession. He’s our FDR (and FDR’s depression lasted more than 11 years (1929-1941)::rolleyes::
I say yes, here is why:
It’s impossible to say for certain what might have happened. Alternate history is only predictive.
But from what I’ve heard, the consensus of economists is that Obama’s policies have greatly mitigated the economic crisis.
Until taxes are hiked to cover it, there won’t be any negative effect. So as of yet, it will almost certainly only have been a positive.
With 145 million people earning a salary in the US, an average income of $25k a year, and an average overall tax burden of 40%, the total government income by taxes is $1.5 trillion. Adding in interest, taxes would need to be raised by about 25% (from 40% to 50%) to cover all of these stimulus packs within the next decade. That could certainly take the wind out of everyone’s sails.
What timetable they are actually considering to pay this all off I don’t know, but I doubt it would be more than 30 years, which is still an 8% increase in overall taxes for the next 3 decades. If there’s any chance at all that the economy could have recovered without the stimulus and without people dying in the streets, it was almost certainly a foolish thing to do. We can certainly pay off that debt when things come back, but it’s going to be a very large drag for a long time.
If you look at predictions made at the beginning of the crisis, we’re hewing fairly closely to the ‘best case’ scenario. 10.2% jobless instead of 10%, recession ended by mid-august, jobs beginning to rebound by end of year.
We’re not out of the woods yet, but January may show actual job growth. So I’d say he’s done a pretty good job, all things considered.
I saw the thread title, and the name of the poster… and predicted that the word “yes” would appear in the first sentence.
What do I win?
This recession started during the last Presidency. Recessions, by their very nature, are like large oceanic cargo ships- they don’t exactly turn on a dime. Any change will take place very slowly, and it’s hard to get them to deviate from their course. The previous administration had years to get this thing going on the path it’s on- reversing that course is going to take a similar amount of time.
Things might get worse before they get better. That does not imply that this administration’s actions are making things worse.
Give Ralph a break. Did you know his picture appears next to the entry for “credulous” in the dictionary? It’s true!
I wish I could find my copy of “Infinity Welcomes Careful Drivers”. There’s a part, when they’re about to break lightspeed where Holly has just realized this, and he’s thinking to himself:
"He’d realized they were about to break lightspeed (which is impossible) and so he’d sent the signals to the engines to stop accelerating. However, because they were still accelerating, only more slowly, they were still going faster and faster even though Holly was telling the ship to go slower.
It made about as much sense to Holly, too."
Ralph = Holly
On the other hand, GM and Chrysler going under would have driven a HUGE number of other businesses under that were already on the brink. There’s also some cause for (very)cautious optimism.
There is a real need to unpick the giant snarl that is the American car industry, but letting it die is not the way.
Technically their success helps the current economic climate; the danger is that the continuing misinvestments will cause the next economic disaster.
Any sensible economist will tell you that government deficit spending, properly focused, is a good course of mitigation during a recession, as long as it’s balanced by clawback during better times. It counteracts the drop in spending by consumers, keeping jobs going and money flowing.
Not sure why we’re blaming Obama for that one - it’s not like all the jobs went to China in the last ten months.
In case you haven’t noticed, we’ve got two wars currently on the go that we can’t manage on our own. Obama is working on winding them down, which will cut down both our spending and our immediate dependence on our allies, but these things take time.
Except that UHC isn’t on the table. Not even close. And the health care debate has nothing to do with the recession, since nothing’s been passed yet and when it is, it won’t by implemented for years.
I like how you blame both Obama and FDR for recessions that started in the terms of, and were greatly exacerbated by, their predecessors (Hint: FDR took office in 1933).
I don’t agree with everything Obama’s doing but at the very least he’s not making things worse.
I’ll call bullshit on this one. Every analysis I’ve read indicates that Chrysler and GM’s financial problems are due mainly to poor quality of product and high pension costs, not to labor contracts in themselves. As for ‘breaking ruinous labor contracts’, these are contracts that, to my knowledge, were freely agreed to by the manufacturers. Does the OP believe that breaking of legal contracts agreed to by both parties is perfectly okay outside of the labor/management sphere?
Best case senerario as predicted when? Certainly not when the stimulus plan was passed. We’ve far supassed the “if we pass the stimulus plan unemployment won’t go above 8%” rhetoric bouncing around beforehand.
They broke the contracts. I don’t know what it takes to please the anti union people. The wages and benefits of auto workers have been slashed. The suppliers have had wages cut in half.
The illogic. Spend trillions making the bankers who caused the whole mess whole again. But wage earners? Fuck them, let them starve, they don’t need jobs as much as bankers need multi-million dollar bonuses .
Step one, eliminate every Goldman Sachs executive from government positions. They are taking care of themselves.
I believe we are heading out of the recession. Housing sales are starting to pick up, and I understand that is some sort of indicator.
Let’s wait 12 months. Why? I’m waiting to see how Obama will pay for the bailout. Will it be taxing the middle-class (like so many presidents love to do). Will it be more issuance of debt that we might as well print in Peking and save the shipping costs? Will it be paid for by businesses and the rich? I know a lot of you don’t believe in the trickle-down theory of economics but through sheer self-interest the rich and business want to invest money to grow the economy.
I also think that there is a bump in the numbers because of the Dec 1st expiration of the $8000 home buying credit. I don’t know that it will be sustained. Unemployment not that bad? Say that to Mrs. Cad who is going on her 1 year anniversary of being laid off (worked for a bank). Guess how many security management jobs there are available in the State of Colorado. ZERO!!! She did apply for four jobs in her field over the last month. That is equal to the total number of open jobs there were for her field during 10 months in Phoenix. And unemployment numbers do not account for people off unemployment insurance or underemployed. If Mrs. Cad works at WalMart as a greeter for $10 an hour, unemployment numbers improve. In Arizona, the number of new unemployment filings dropped and this was heralded as great news. Guess what idiots - that’s the second derivative. Bottom line is more Arizonans still lost jobs! How is that an improvement?
But my favorite is health care reform. First of all, it’s not health CARE reform. It’s health INSURANCE reform. I hope it passes because I’d love to see the reaction when voters realize they will be taxed for three years before it goes into effect. And the backroom deals with the stimulus money have already started. We know about the “Louisiana Purchase” but AARP just supported cuts to Medicare. What would they accept cuts? Obviously not because they received $18 million in TARP funds right?
I think that the answer to the question in the OP is yes - to the extent that the stimulus was not big enough. And a post that calls the Great Depression is the historical and economic equivalent of one saying the Earth is flat. How come conservatives don’t have the moral courage to ever admit they screwed the pooch?
Reports say 11,000 jobs were lost in November, which is better than expected. It’s only good news compared to the job losses we saw earlier this year and late last year, but still.
Your questions and comments don’t support the question you are asking, ralph214c. It sounds like you are making a different argument, which is that some of the problems and expenses of this crisis are being delayed rather than solved. There’s probably a better case to be made for that than for Obama prolonging the recession.
And how is that going to prolong the recession?
May not be a good policy, but again, how is this extending the recession? The economy did grow last quarter, so by that measure, the recession is coming to a close.
Not this again. China owns a bunch of U.S. debt, but does not own the U.S., and this goes back to before Obama.
This can’t be blamed on Obama. Even if these commitments could just be cut off - and it’s probably not that simple - it would have been stupid to propose this as a response to the economic problems of 2008 and 2009. Military bases didn’t cause those problems and closing them would not solve them. Aside from the fact that Obama would have been killed politically for suggesting this idea, it would not have made sense to bring it up in this context.
That’s not what’s driving up the cost of health care.
I’m not seeing it.
I don’t agree with this assessment, but by your measure it looks like Obama is about nine years ahead of the curve. (Or Bush and Obama, if you give Bush credit for the effects of the stimulus bill.) Do you think this recession is likely to last five more years or longer?
Here’s something I’d like to have explained from the “stimulus not big enough/need second stimulus crowd”. Keeping in mind that I have no real opinion on the matter, so I’m not arguing a particular side, why do you say that?
From what I’ve heard only a tiny fraction of the first stimulus package has actually been spent. What is the reasoning to say that more is needed when only some tiny fraction (I want to say under 20%?) has even been spent in the first year?
ralph124c, Are you looking for a debate or are you just wanting to slam Obama?
Maybe so. I personally agree that it was a bad idea to support these companies and they should have gone under. But it is a stretch in my mind to think that these actions are going to prolong the recession. We are talking a drop in the bucket here. And anyway, I am not clear why you are pinning this on President Obama. It was in President Bush’s term that congressgave the big 3 automakers 25 Billion dollars in loans and the president gave them 17.4 Billion in TARP funds. Sure, President Obama then gave them another 30 Billion or so, but there is plenty of blame to go around here and pinning it on President Obama is pretty lame.
Wait, wasn’t it our previous president that bailed out Wall Street? I believe the Emergency Economic Stabilization Act and the Troubled Asset Relief Program were passed in 2008 (Remember Senator McCain suspending his campaign because he wanted to help?), before President Obama was able to promote any of his financial policies. So, while we can debate the premise of you OP, you also seem to assert that it was the polices of the previous Republican Administration that prolonged the Recession. True? In fact, to address your other contention, it was ~15 days after President Obama took office that the senate modified the program so that the compensation of Wall Street executives was capped. The senate did this the day after the President used his executive authority to limit executive compensation for firms receiving Government aid under President Bush’s program. So who was it that allowed them to profit on the taxpayer’s dime?
Hmmm… Well, I think we can agree that the deficits are a bad thing, but again, it was the Previous Administration that is responsible for the majority of it. When you take into account the 700 Billion of the Emergency Economic Stabilization Act of 2008 and the 150 Billion in the Economic Stimulus Act of 2008 and the 190 Billion that the Bush Administration spent on Iraq and Afghanistan in 2008 and the more than doubling of the monetary base by the Fed (the majority of which seems to have occurred before he took office - cite). All of this makes the 787 Billion in President Obama’s American Recovery and Reinvestment Act of 2009 seem kind of paltry in my opinion. Or are you arguing that it is President Obama’s continuation of the previous administrations policies that is lengthening the recession? If you really want to understand President Obama’s effect on the deficit, let’s start with this: America’s Sea of Red Ink Was Years in the Making
Regardless, I am not sure that you understand the effects of this. The weakening dollar will only strengthen our industry and most likely will shorten the recession. I am sure there will be somebody smarter than me coming along that will explain this to you in more detail. As far as the energy costs, again I think you are mistaken. The deficits and the devaluation of the dollar is not the main cause of rising energy prices, supply and demand are. If you disagree, show me some evidence that the US deficits are increasing the cost of energy, because this sounds much to simplistic for me to swallow.
Bullshit. China will never dictate US policy. Do you really think that any President of this country would allow that to happen? Our economy is more than double the size of theirs and they are more dependent on us than we are on them. In fact, the weakening dollar that you complain about in your previous point is actually weakening what power they do have over us. Also, you don’t know what you are talking about when you speak of the dismantling of US manufacturing. US manufacturing capacity and production has grown steadily over the years (proof here). Just because china now makes our t-shirts and shoes, does not mean that all manufacturing has gone their. This is a myth. If you disagree, put you money where your mouth is and prove to me that US manufacturing is being dismantled.
Wait a minute, this has been US policy for far longer than President Obama has been in office, but you want to pin this on him? And how does this lengthen the recession? What does this have to do with the debate?
Universal health care? Are you talking about Medicare? Where is this Universal Health care you speak of?
Look, I don’t like the health care reforms that are being discussed right now, I think they are crap and will not likely do anything, but you are full of shit when you say they are not reforms. The are just likely to be ineffective ones. Also, tort reform is not the end all, be all with regards to health care reform. Why don’t you give us a cite on how much medical torts drive up the cost of care?
Damn, I almost want to open a pit thread to reply to this. Nuff said.:rolleyes:
You’re asking a guy who blames the Depression of 1929 on Roosevelt and General Motor’s financial problems on the UAW.
Yeah, I know. But who knows, maybe he will actually come up with something intelligent. Though I disagree with his premise, I could argue his side and actually come up with some points. Maybe Sam Stone, or some other reputable conservative, will drop in and argue his side. Either way, I agree that it is silly to expect ralph124c to contribute anything of value to a political debate.
I’ll try but I don’t know how successful I’ll be.
The problem with all of this money being spent is that it is doing nothing to solve the fundamental problem of losing jobs. Say what you will about the unemployment numbers but the fact remains that more Americans are losing jobs every month and the numbers do not account for the underemployed. Obama can talk about 1 million jobs created or saved, but how do really measure a job saved? We gave money to GM so we saved all those jobs. Is this like counting anyone who dies in the same house as a smokers as having died of second-hand smoke.
We’ve given money to banks that wont lend to anyone. Try to buy a house with a FICO under 620. It is quite literally impossible. The car companies are opening jobs overseas and if you believe McCain, AARP got #18 million in TARP funds and have yet to create a job. So the money the government is spending is not making it into the economy, yet those hardest hit are going to have to come up with the money to pay for it. Arizona is quite literally out of money and services will have to be cut but of course bankrupt companies got money to give their execs that bankrupted them huge bonuses.
People compare this to the New Deal, but this is different - the New Deal used government money to create jobs directly and not giving taxpayer money to companies that have already proven they can’t manage money. I don’t necessarily disagree with putting money in the economy, but the carte blanche these companies are given with what to do with the funds WILL extend the recession and blame Bush all you want for the original infusion of money, one cannot disagree that it is Obama’s plan to spend even MORE money and provide as little oversight as Bush did.
I’m getting my information from Krugman, who seemed to have called this one also. One of the things that could have been done was to give more money to state governments to avoid layoffs. I think there was some more in the original bill, which got cut to keep the cost down a bit.
Second, while not all of it is spent, it will be spent by the end of next year, and it appears that unemployment will still be relatively high even then. If the stimulus money goes away, there might be an increase in unemployment if the private sector isn’t in good enough shape yet to take over.
There is a stimulus-funded road improvement project within walking distance of my house, by the way, so the money is now flowing.