# Are Obama's Financial Policies Prolonging This Recession? **URL:** \ **Category:** Great Debates\ **Created:** [December 4, 2009, 1:09am UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928 "2009-12-04T01:09:36Z")\ **Posts on this page:** 19\ **Page:** 4
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [December 18, 2009, 7:12pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/61 "2009-12-18T19:12:56Z")
> [@Jimmy\_Joe\_Meager](#): > > Which are easily distilled to four: > > “It’s all Bush’s fault.” Nah, we give Cheney and the Republican Congress-scum due credit also. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [December 18, 2009, 7:54pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/62 "2009-12-18T19:54:59Z")
Well, the debts run up by Obama (in his first year alone), are enough to have dropped the value of the dollar significantly-gold is heading for $1500/ounce. I wonder if part of his plan is to repudiate the USA’s foreign debt (through inflation). ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [December 18, 2009, 7:57pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/63 "2009-12-18T19:57:26Z")
Yes, the world began entirely anew last January 20, didn’t it? ---
**Author:** ![Happy\_Fun\_Ball](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/happy_fun_ball/32/17664_2.png) [@Happy\_Fun\_Ball](https://boards.straightdope.com/u/Happy_Fun_Ball)\ **Post date:** [December 18, 2009, 8:27pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/64 "2009-12-18T20:27:51Z")
> [@ralph124c](#): > > Well, the debts run up by Obama (in his first year alone), are enough to have dropped the value of the dollar significantly-gold is heading for $1500/ounce. > I wonder if part of his plan is to repudiate the USA’s foreign debt (through inflation). Cite? Let’s face it, most of the debts are due to the previous administration. President Obama _is_ contributing to the problem, but he is much more financially conservative (using the classic meaning of the world, i.e. cautious, moderate) than President Bush. On reflection: this was your thread ralph, but you have not added anything to the debate except dropping these polemic and unsubstantiated claims mixed with your partisan opinions and then running away. If you are not going to debate this stuff like a grown-up, why did you even bother starting this thread in GD? Why don’t you just drop these little nuggets in the BBQ Pit or in IMHO since you have no intention of debating them? ---
**Author:** ![Lamar\_Mundane](https://avatars.discourse-cdn.com/v4/letter/l/85f322/32.png) [@Lamar\_Mundane](https://boards.straightdope.com/u/Lamar_Mundane)\ **Post date:** [December 18, 2009, 8:40pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/65 "2009-12-18T20:40:48Z")
> [@ralph124c](#): > > Well, the debts run up by Obama (in his first year alone), are enough to have dropped the value of the dollar significantly-gold is heading for $1500/ounce. > I wonder if part of his plan is to repudiate the USA’s foreign debt (through inflation). > [@](#): > > NEW YORK – The dollar index, which measures the U.S. currency against a basket of global counterparts, rose to a new three-month high on Friday as rumblings about geopolitical risks added to the greenback’s appeal from investors looking to relative safe assets. The index rose as high as 78.105, the highest on a closing basis since Sept. 4. > Copyright © 2009 MarketWatch, Inc. > [@](#): > > NEW YORK — Gold prices took a big hit Thursday, falling nearly $30 as the dollar rose and investors bet that the greenback will continue to strengthen. > > Gold for February delivery tumbled as low as $1,098 an ounce on the New York Mercantile Exchange — the first time it traded below $1,100 in more than a month. The metal closed down $28.80 to $1,107.40 an ounce, a 2.5 percent drop from Wednesday. > > The sharp sell-off was triggered by a surge in the dollar, which rose amid growing concerns over rising debt levels in Europe and discouraging corporate outlooks. The prospect of higher interest rates also boosted the greenback. I think the lack of debate is due to these pesky things called “facts.” ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [December 18, 2009, 8:52pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/66 "2009-12-18T20:52:27Z")
> [@ralph124c](#): > > Well, the debts run up by Obama (in his first year alone), are enough to have dropped the value of the dollar significantly-gold is heading for $1500/ounce. > I wonder if part of his plan is to repudiate the USA’s foreign debt (through inflation). Was it in this thread or another one where it was pointed out that a reduction in the value of the dollar is very useful in increasing exports, decreasing imports, and thus improving our financial health. A big problem with China is that they keep their currency pegged to the dollar, and thus artificially low, in order to increase exports. There can be a downside, but for the most part it seems those complaining about the low dollar consider its value a macho thing. ---
**Author:** ![flickster](https://avatars.discourse-cdn.com/v4/letter/f/7bcc69/32.png) [@flickster](https://boards.straightdope.com/u/flickster)\ **Post date:** [December 18, 2009, 9:02pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/67 "2009-12-18T21:02:09Z")
> [@Voyager](#): > > Was it in this thread or another one where it was pointed out that a reduction in the value of the dollar is very useful in increasing exports, decreasing imports, and thus improving our financial health. A big problem with China is that they keep their currency pegged to the dollar, and thus artificially low, in order to increase exports. > > There can be a downside, but for the most part it seems those complaining about the low dollar consider its value a macho thing. If the reducing the value of a nation’s currency is the desired standard, Argentina should be a financial powerhouse ---
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [December 20, 2009, 8:32pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/68 "2009-12-20T20:32:29Z")
> [@flickster](#): > > If the reducing the value of a nation’s currency is the desired standard, Argentina should be a financial powerhouse Desired economic standards aren’t constants. They often vary depending on the situation. What works during normal times does not necessarily work during a recession. What works in Argentina does not necessarily work elsewhere. This idea should be neither new nor surprising, and is certainly not limited to economics. Doctors don’t prescribe the exact same medicine for every patient. Someone who’s suffering hypothermia would benefit from a strong fire, even though fires sometimes cause serious burns. One of our current problems is insufficient aggregate demand. A weaker currency would help alleviate this problem and lead to a swifter and more robust recovery. We don’t want to see the dollar collapse, of course, but the weakening currency is absolutely good news for us right now. It will relieve trade pressures, increase the velocity of the money supply, increase employment, and increase overall production. There are even many economists out there who are calling on the Fed to do even more to get inflation back up to its 2% target level, or even to increase the target to 3%. It’s not a universal belief–some think we’ve done more than enough for now–but suggestions like these are based on a straightforward application of basic macroeconomic principles to our present situation, which is not even remotely similar to what previously happened to Argentina. It’s best not to oversimplify an important topic with a meaningless comparison. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [December 20, 2009, 9:42pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/69 "2009-12-20T21:42:10Z")
> [@Hellestal](#): > > Desired economic standards aren’t constants. They often vary depending on the situation. > > What works during normal times does not necessarily work during a recession. What works in Argentina does not necessarily work elsewhere. This idea should be neither new nor surprising, and is certainly not limited to economics. Doctors don’t prescribe the exact same medicine for every patient. Someone who’s suffering hypothermia would benefit from a strong fire, even though fires sometimes cause serious burns. > > One of our current problems is insufficient aggregate demand. A weaker currency would help alleviate this problem and lead to a swifter and more robust recovery. We don’t want to see the dollar collapse, of course, but the weakening currency is absolutely good news for us right now. It will relieve trade pressures, increase the velocity of the money supply, increase employment, and increase overall production. There are even many economists out there who are calling on the Fed to do even more to get inflation back up to its 2% target level, or even to increase the target to 3%. It’s not a universal belief–some think we’ve done more than enough for now–but suggestions like these are based on a straightforward application of basic macroeconomic principles to our present situation, which is not even remotely similar to what previously happened to Argentina. > > It’s best not to oversimplify an important topic with a meaningless comparison. So I see, inflation is great? Inflation (which is essentially stealing from those who have cash/savings) has never been shown to help a nation out of recession. So I guess, this is Obama’s plan? God help us! ---
**Author:** ![Ace309](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ace309/32/1050_2.png) [@Ace309](https://boards.straightdope.com/u/Ace309)\ **Post date:** [December 20, 2009, 10:01pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/70 "2009-12-20T22:01:47Z")
> [@ralph124c](#): > > So I see, inflation is great? Inflation (which is essentially stealing from those who have cash/savings) has never been shown to help a nation out of recession. > So I guess, this is Obama’s plan? God help us! What’s a false dilemma? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [December 20, 2009, 11:06pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/71 "2009-12-20T23:06:35Z")
> [@ralph124c](#): > > So I see, inflation is great? Inflation (which is essentially stealing from those who have cash/savings) has never been shown to help a nation out of recession. > So I guess, this is Obama’s plan? God help us! Inflation is often a sign that a nation **is** coming out of a recession/depression, which in turn is usually characterized by deflation. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [December 21, 2009, 2:50am UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/72 "2009-12-21T02:50:19Z")
> [@ralph124c](#): > > So I see, inflation is great? Inflation (which is essentially stealing from those who have cash/savings) has never been shown to help a nation out of recession. > So I guess, this is Obama’s plan? God help us! You people torched our economy, and now you are hassling the firefighters about the possibility of water damage. Such is the chutzpah of the ridiculous right. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [December 21, 2009, 5:32pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/73 "2009-12-21T17:32:45Z")
> [@ralph124c](#): > > Well, the debts run up by Obama (in his first year alone), are enough to have dropped the value of the dollar significantly-gold is heading for $1500/ounce. > I wonder if part of his plan is to repudiate the USA’s foreign debt (through inflation). [![](https://farm3.static.flickr.com/2804/4203947426_148f3072a6_o.png) ](https://farm3.static.flickr.com/2804/4203947426_148f3072a6_o.png) [![](https://farm3.static.flickr.com/2595/3694968160_07e0b3919f_o.gif) ](https://farm3.static.flickr.com/2595/3694968160_07e0b3919f_o.gif) [http://www.shareswatch.com.au/blog/wp-content/gallery/economic-charts-and-graphs/gold-10-year-chart-mar-09.gif](http://www.shareswatch.com.au/blog/wp-content/gallery/economic-charts-and-graphs/gold-10-year-chart-mar-09.gif) EDIT: the first chart is the dollar index over the last ten years. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [December 21, 2009, 5:47pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/74 "2009-12-21T17:47:51Z")
> [@Dick\_Dastardly](#): > > [http://farm3.static.flickr.com/2804/4203947426\_148f3072a6\_o.png](http://farm3.static.flickr.com/2804/4203947426_148f3072a6_o.png) > [http://farm3.static.flickr.com/2595/3694968160\_07e0b3919f\_o.gif](http://farm3.static.flickr.com/2595/3694968160_07e0b3919f_o.gif) > [http://www.shareswatch.com.au/blog/wp-content/gallery/economic-charts-and-graphs/gold-10-year-chart-mar-09.gif](http://www.shareswatch.com.au/blog/wp-content/gallery/economic-charts-and-graphs/gold-10-year-chart-mar-09.gif) > EDIT: the first chart is the dollar index over the last ten years. 2nd edit : an even better dollar chart. [http://alhambrainvestments.com/wp-content/uploads/2009/11/us-dollar-index.png](http://alhambrainvestments.com/wp-content/uploads/2009/11/us-dollar-index.png) Certain presidents seem to have done better than others, don’t they? Anyone remember a daily media drumbeat about the collapse of the dollar between 2003-8? ---
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [December 21, 2009, 8:33pm UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/75 "2009-12-21T20:33:56Z")
> [@ralph124c](#): > > So I see, inflation is great? Inflation (which is essentially stealing from those who have cash/savings) has never been shown to help a nation out of recession. Have you never heard of the Great Depression? It was a severe economic downturn in the 1930s. It happens to be the single most notable event in all of economic history. The major industrialized powers all decided to devalue their currencies. Quite opposite of what you say, the speed of their recoveries was directly related to how quickly they dropped their gold pegs. The faster they devalued their currencies, the quicker they recovered. Causing a bit of inflation was, in fact, _the single most important factor in recovery from the Depression_. This is not a controversial point, as so many other topics in macroeconomics are. The great libertarian Milton Friedman himself argued that the cause of the Depression was the Federal Reserve’s inability to maintain the money supply in the time of crisis. Devaluing the currency was the first step to expanding the money supply again, and thus relieving the deflationary pressure that they were experiencing. To claim that inflation has never helped a country out of recession is to know absolutely nothing about this topic. > [@ralph124c](#): > > So I guess, this is Obama’s plan? God help us! No. This is not Obama’s plan. That you do not like Obama does not mean that everything bad in the world (or everything you perceive as bad) comes from him. Personally, I dislike Obama on a great many issues, but I do not blame him for disagreeing with me about monetary policy _because Obama is not in charge of monetary policy_. The president is very powerful, but the money supply is outside of his domain. Getting us away from this crippling deflationary pressure and returning to our inflation target of 2% is not Obama’s policy–it is the policy of the United States Federal Reserve, with Ben Bernanke as Chairman. If he’s going to be the devil of your imagination, then you should blame him for everything bad that happens in your life. What’s most ridiculous about this is that Obama did have a chance to press for a more economically liberal Fed chairman. Instead, he renominated W’s old chairman, Bernanke. This is the one time that Obama could have freely pressed for more expansionary monetary policy, and he declined. And yet you still take whatever meager excuse you can find to blame him for policies that you clearly have never thought through and don’t at all understand. You might as well be blaming him for the snowstorms on the eastern seaboard. It would make just as much sense. ---
**Author:** ![waterj2](https://avatars.discourse-cdn.com/v4/letter/w/858c86/32.png) [@waterj2](https://boards.straightdope.com/u/waterj2)\ **Post date:** [December 22, 2009, 12:03am UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/76 "2009-12-22T00:03:02Z")
> [@Hellestal](#): > > What’s most ridiculous about this is that Obama did have a chance to press for a more economically liberal Fed chairman. Instead, he renominated W’s old chairman, Bernanke. This is the one time that Obama could have freely pressed for more expansionary monetary policy, and he declined. Is there anyone in particular that you think might have been in line had Obama wanted to do that? I recall a bit of speculation that Bernanke might be replaced, but can’t recall any potential replacements mentioned. ---
**Author:** ![Happy\_Fun\_Ball](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/happy_fun_ball/32/17664_2.png) [@Happy\_Fun\_Ball](https://boards.straightdope.com/u/Happy_Fun_Ball)\ **Post date:** [December 22, 2009, 12:19am UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/77 "2009-12-22T00:19:44Z")
Never mind. ---
**Author:** ![Hellestal](https://avatars.discourse-cdn.com/v4/letter/h/3ab097/32.png) [@Hellestal](https://boards.straightdope.com/u/Hellestal)\ **Post date:** [December 22, 2009, 12:24am UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/78 "2009-12-22T00:24:44Z")
> [@waterj2](#): > > Is there anyone in particular that you think might have been in line had Obama wanted to do that? I recall a bit of speculation that Bernanke might be replaced, but can’t recall any potential replacements mentioned. I heard some speculation about Larry Summers maybe taking the job, and also at least one recommendation for San Francisco Fed President [Janet Yellen](http://www.federalreserve.gov/aboutthefed/bios/banks/pres12.htm). I just want to be clear, though, that I’m not a harsh critic of post-crisis Bernanke. I think he’s making the wrong choice in concentrating more on anchoring inflation expectations instead of actively reducing unemployment. But of course, I don’t know for sure. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [December 22, 2009, 3:02am UTC](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928/79 "2009-12-22T03:02:34Z")
> [@ralph124c](#): > > -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. Cite? [Malpractice awards have been flat for years](http://www.insurance-reform.org/StableLosses2007.pdf), and have been far outstripped by rising malpractice premiums. One does not drive the other. Malpractice premiums rise in periods of stock market decline, not rising malpractice awards. [Previous page](https://boards.straightdope.com/t/are-obamas-financial-policies-prolonging-this-recession/519928.md?page=3)