Tuesday, November 25, 2008

Obama won't save us...his glow is already fading

Since election day each time Obama spoke the markets responded positively. That was a welcome contrast to the devastatingly negative effects seen after any Hank Paulson or President Bush comments.

However, Obama's press conference today was met with market selling for the first time and probably for good reason. Rather than aggressively reiterating the need for a big stimulus without any conditions or without any regard over deficits, Obama sounded a more cautious tone. He talked about crafting an "efficient and responsible" budget. (Code words for fiscal responsibility.)

He spoke about how his OMB appointee, Peter Orszag and his debuty, Rob Nabors, would be "charged with going through the federal budget “page by page, line by line” to develop a budget that would eliminate waste and increase government efficiency."

Obama also said, “If we are going to make the investments we need, we also have to be willing to shed the spending that we don't need.”

Again, the thinking there seems to suggest that he believes the government is somehow constrained in what it can do. Only by "scouring the budget, line by line," is the way he believes he can come up with the money.

Obama's team is filled with deficit hawks, suggesting that bold and aggressive measures to revive demand will fall far short.


Unknown said...

Really? Already? That sounds like more smart analysis.
But, you're often wrong, aren't you?
You look like a damn fool in this clip.

STF said...

Henry (and everyone else like you) . . . listen to today's show (11/25), part 3. Enough said.

Mike . . . excellent stuff.

Not to add to your misery, but sent this (below) to Warren earlier today . . . if they have their way on the "long run fiscal gap," in the long run we'll all wish we were dead.


CNN, 11/25/08

President-elect Barack Obama on Tuesday nominated Peter Orszag to head the White House's Office of Management and Budget (OMB), which is the president's chief number-crunching department.
As OMB director, Orszag, 40, would prepare the president's federal budget proposals for Congress and analyze the effectiveness of government programs and policies, as well as have a big role in determining funding priorities for federal dollars.
Orszag has also been a frank voice on the growth in the country's deficit and the shortfalls in the Social Security and Medicare programs.
"The nation is on an unsustainable fiscal course," Orszag said in September, before the Treasury and Federal Reserve committed over a trillion dollars to stem the credit crisis, at least some of which the government is expected to make back over time.

googleheim said...

Peter Schiff told everyone to run to commodities which bit the dust.

He told everyone to get out of the U$D and he did not say to go to the YEN.

IF he did his homework, he would have noted that Japan was insulated due to experiencing this recently already and had firewalls in place.

Schiff was right then wrong big time.

Obama maybe is just appeasing the frugal side of America.

He'll swing wildly both ways, including appearing tight and then appearing generous and super-size.

He will have to wear many hats no matter.

mike norman said...

I don't think he's going to swing. At least not right away. He's been very consistent in who he's been appointing to key economic posts within his administration. They are all deficit hawks and now he's spouting the mantra, when he says, "We'll scour the budget to find money to fund the investments we need to make." The stimulus that he approves will likely be rolled out over a period of two years, with concomitant spending cuts. Net increase in aggregate demand should be modest at best. Hardly bold. Hardly change.