Bloggers on the left are upset that I used a running joke with a friend to poke fun at the President while making a serious point. While I said I do not believe that Barak Obama is a "freakin' moron," I am concerned that his economic policy is incoherent.
He is at once engaging in an incredibly ill considered orgy of spending while promising to cut the deficit. He is blaming the economic meltdown on too much debt while heading straight to the Chinese for a gigantic advance. He wants to jump start the economy but his stimulus package is oddly backloaded and much given over to long deferred pet projects that seem neither temporary or targeted. He wants people to spend while raising the prospect of significant tax increases. (There is, no way to get where he wants to go by taxing only the rich and, like it or not, taxing the rich is tomorrow is unlikely to prompt them to invest today.) He wants people to feel confident about the future but, until his speech earlier this week, ran around the country predicting doom unless Congress immediately pass a bill that it had not read or deliberated.
At the same time that he wants to raise the deficit and cut the deficit (an unreconstructed Keynesian might believe in that), he has, as Charles Krauthammer points out, promised a fundamental change in the nature of the US economy, seeking to substantially shift resources from the public to the private sector.
Of course, he's not a freakin' moron. I know what it takes to make the Harvard Law Review. I don't even claim that he is acting like one. But the markets are unimpressed and its hard to see why they should be.
It's easy, of course, to blame Bush and his supposedly "conservative economic policies." But I am still waiting for a convincing statement of that case.
One can accuse Bush of fiscal irresponsibility (conservatives were doing that all along), but the Democrats have decided to see him on the spending front and go all in.
One can imagine regulations that might have prevented some of the stupidity in the housing market but those regulations would most definitely not been supported by the Democrats who, in fact, opposed belated Republican efforts to rein in Fannie and Freddie. Would Democrats have supported federally mandated tightening of lending standards?
Was the problem tax cuts for the rich? Why?
It does seem that Greenspan mismanaged monetary policy by overreacting to the bust of the Clinton era tech bubble and 9-11 and then overcorrecting too quickly. But overreaction seems to be the order of the day.
I, and others, have been accused of cheering the market declines. Hardly. I'm going to need that money some day.
At least I should be in the running for Jerk of the Week.