I am not surprised by the Obama Administration's rocky start. Running the only superpower is a very difficult job in the best of circumstances. Obama is not enjoying the best of circumstances. The entire world is suffering from the current economic crisis. Maybe this is all George W.'s fault, as Todd Epp seems to think (if "think" is the right word).
But in fact, the current situation in the U.S., at least, is about what it was when Ronald Reagan came into office. Unemployment has not yet reached the peak it reached in the early eighties, and won't, according to Obama's economic advisers. And yet we are now on the point of spending about a trillion and a half dollars on a single piece of legislation. That's on top of almost a trillion we spent on the bank bailout. Of course, all that spending will be worth it if it gets us out of recession sooner. The only way to pay back debt is to make money. But all this money has to be paid back, one way or another. That means we start in a deeper hole when Obama turns to fixing the American health care system, or fixing the major entitlement programs.
Obama might have used some of his transition time to ensure that the stimulus bill contained nothing but stimulus, and not billions of addition spending. If he had done that, he wouldn't be in the tenuous position he is in now. The stimulus bill is about as popular as Dubya was in his worst days.
The major problem I had with the Obama campaign was that it was long on slogans and short on substance. When Reagan ran in 1980, everyone had a pretty good idea what he would do and he did it. It was very had to guess from Obama's shifting campaign rhetoric what he would do when he got to the White House. His opponents worried that he was going to do X, and his followers assumed that he was going to do X, but what if X had no content?
Today Treasury Secretary Tim Geithner unveiled the Obama plan for resuscitating the American financial system.
Administration officials committed to flood the financial system with as much as $2.5 trillion — $350 billion of that coming from the bailout fund and the rest from private investors and the Federal Reserve, making use of its ability to print money.
Well, okay, that's two trillion more. Great. And note that "print money" thing. That's inflation. That' sounds pretty bad to me, but the problem is in the details.
There weren't any details. In this moment of "we've got to do something now," the financial sector was waiting to find out what, exactly, we will be doing. It didn't find out. The results were predictable.
The strength stocks showed last week vanished on Tuesday after Treasury Secretary Timothy Geithner did little to slake traders' thirst for details on the U.S.'s plans to aid ailing financial institutions.
The Dow Jones Industrial Average declined 381.99 points, or 4.6%, to 7888.88. Bank of America was its weakest stock, dropping 19%, and Citigroup fell 15%. But all 30 of the blue-chip average's components ended in the red. The Dow is down 10% for the year to date and within 4.5% of its five-and-a-half year closing low of 7552 on Nov. 20.
It's one thing to wonder about the details during a campaign. It's another thing to be waiting for them now. Maybe the Obama Administration is congenitally incapable of actually making policy. Let's hope not. Meanwhile we are still waiting.
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