Jobs Are the Presidency.
POTUS remarks while still in China that he is suddenly aware that the full moon flood tide of spending that his administration has enjoyed the last eleven months has now overrun the beach. What is to be done? POTUS sounds uncertain. "...without spending money, there may be some tax provisions, that can encourage businesses to hire sooner rather than sitting on the sidelines.... we're taking a look at those..." And what makes POTUS uncertain? "... if we keep on adding to the debt even in the midst of this recovery, that at some point people could lose confidence in the US economy in a way that would lead to a double dip recession...." All this lawyerly spin can be translated bluntly. The trillions spent on the stimulus package and TARP and the various housing/foreclosure/mortgages/rescue plans have not worked to stop the job losses and offer no promise at this time to start jobs growing again. POTUS is now faced with explaining why his stimulus bill didn't stimulate (in fact it transferred federal tax money to state coffers) in the first place. POTUS supposes that if he offers tax breaks to employers that this will create jobs in the private sector. However POTUS is aware (someone may have briefed him quietly) that the spending has wrecked the dollar and created an asset bubble in commodities (denominated in the shrinking dollar), and that this long term destruction of the dollar puts the economy at risk again of retracting.
What Is to Be Done II?
Alan Murray and John Bussey, WSJ, report from the WSJ CEO conference this past week (above) that, they learned, what has gone wrong is that the Obama administration has pushed companies into a job freeze because they cannot plan on costs. What costs? The costs of the shrinking dollar. The costs of the threatened healthcare reform bill. The costs of the now postponed but not rejected cap and trade. The costs of the possibility that the EPA will declare greenhouse gasses a pollutant and start to tax by fiat. The cost of the FCC declaring that all phone users and internet providers must pay for universal free access for all. The costs of the repeal of the Bush tax cuts. Enough. Alan Murray, John Bussey and Evan Newmark all reported (above) that the CEO's uniformly complained that they cannot and will not hire again until they can get firm numbers of the costs of the Obama administration's wish-list of polices. Most striking to me was that the Obama White House sent Rahm Emanuel, Peter Orszag and Christina Romer to answer polite, impatient, futile questions form the CEOs. But Congress did not show up, not Mrs. Pelosi nor Harry Reid nor their deputies. The implication is that Congress will not speculate about what it will cost to pay for what Congress mandates by Democratic majority legislation the next year. Murray and Bussey both indicate that Team Obama understands the CEO complaint. Does Congress? And who is running that trillion dollar printing press in Washington? The name on the door is Obama.
Jobs, Jobs, Jobs.
No evidence yet that the Obama administration understand the theory that the Federal and State budgets drain money from the economy that would be put to work growing the economy, which means jobs. No evidence that the Obama administration understands that the government intervention in the marketplace, with TARP, stimulus, mortgage bailouts, GM and Bank of America and Citi zombie status, that all this finagling and manipulating and favor-seeking and plan smoke and mirrors keeps the economy from stabilizing. You cannot hire if you do not have confidence in the housing and banks and dollar. POTUS holds yet another Jobs summit at the White House on December 3, and then departs to Allentown, Pennsylvania. No jobs in Allentown since the 1976 and Jimmy Carter. This will be a test of POTUS logic. How does he propose to stimulate job growth in a region that lost growth after Bethlehem Steel cleared out, and that hasn't sen hiring since VE Day? SEIU?
Do Nothing vs Do Something.
David Wessel, WSJ, writes that the Obama administration is uncertain what to do about the joblessness because there is another camp, outside government, that says to Do Nothing at all. To wait. (I am in the do nothing camp, with the caveat that I would undo the damage already done by shelving the fevers in Congress, the EPA, strengthening the dollar, shutting off the junk food to the zombies and so forth.) The Obama administration is in the Do Something camp. Even then, the Obama team is uncertain if it should do more and more, such as expensive tax credits for hiring (similar to what POTUS mentions above) or just tinker cheaply (the the recent $250 check to seniors for drugs). The uncertainty itself is a source of panic, because while the administration waits to make a decision, the damage already done to the dollar by the failed spending makes it difficult for the markets to stabilize and the private sector to budget and hire. In sum, I do not hear any voice in the White House remark that the problem could be (is) Congress and the White House.
Meanwhile, the fun story of the day is that the billionaire market giant John Paulson is building a new hedge fund to start January 1 that will buy gold, gold shares, gold-mining and so forth. Paulson's opinion is that gold is just starting a bull run, hanging today at $1150. The market smiled. This isn't about gold supply. This is the dollar, the new Fifty Cent piece of Planet Earth. Buy gold now. Sunday night September 14, 2008, the night Lehman Brothers died, I can recall Jimmy Rogers in Singapore telling me that gold was up $23 an ounce. Around $770. Buy gold that night, in the panic of the next weeks 0f 2008 when Congress passed the trillion dollar TARP giveaway to the bankers and their cronies, and you are now up better than 40%. If you think the dollar is going to rally with the Obama administration's current policy, sell. If you don't, can gold go anywhere but up?
Stimulus has not worked, utter failure. WSJ article today proves the Stimulus was a blatant waste of taxpayer dollars.
Beltway crowd keeps talking about the stimulus, just like the "peace process" in the middle east. Their belief system matters more than any proof of efficacy.
Cutting taxes has always been the quickest route to recovery. Tax cutting is heresy to RINOs and liberals.
Wisdom
It's possible that Obama was read the riot act while in China. He might well have been told that he can't just take his ball and go home; that there are others still out there who are entitled to play. “America can't just be permitted to retreat behind some smoldering economic ruin just because it happens to please the Utopian academics of that country; just because someone claims to have discovered the Holy Grail that would create some socio-economic arrangement that has never been seen before.
“No thank you, Mr. (American) President. By the way, how did you ever manage to get elected? Surely the whole country couldn't be as loony and bitter as you are? Go back there and fix what your administration has already wrecked. While we recognize that the some of the problems stem from what you inherited, there's no denying that, since you’ve been in office, you've made everything many times worse. Now, you've put us all at risk.
“Remember, we own you as we own your debt. We could demand our money back at any time. We know what you're doing: driving the dollar down, so we will be left holding the bag. Well, it won't work. We'll come over (if we have to) and claim your land; your women; your resources; the labor of your people - until we feel we have fair value in return for all that we've already invested there.
“And, by the way, don't even think of making any noise about Taiwan, Tibet, Pakistan, Africa or any other place in which we decide to exert our (admittedly) pernicious influence. China is a big country; we've got way too many people; we desperately need to expand. …and right now, we find, you’re in our way.
http://peterkoelliker.blogspot.com/
Do you suppose this just might be one of those "chicken comes home to roost" moments, a la the right reverend mr. wright. We have a bunch of misguided fools running this government, and we'll all pay handsomely in the end for their vision. Thank You Mr. President for your fine leadership. And for those who wish to disagree with my assessment, hope you're in gold like I am.
i really do hate to say I told you so -but i called it out months ago- right here in fact- It wasn't ever in doubt i am saddened to say- The whole strategy was lain before us- The Crisis of the Economy-The crisis of Healthcare - the crisis of the Debt- and each one will need to get done urgently and inefficiently. Cloaked in shadowy back rooms and sausage stuffing to weasel, connive & exhort support.
This is Pat's conspiracy theory come alive.- I said it during the Bush years and i am a saying it now the remodeled Politiques of fear are here to stay Apply constant pressure(chaos) and don't stop . . . dither around and act busy but by no means are you attempt to truly resolve the problem . . .
Lil Timmy Geithner still around? He out lasted my presumption by 3 months but the seems are coming apart now . . .he is looking pretty shop worn and former supporters turning around on him like a pack of wolves circle their prey. See ya Timmy- Don't forget the skateboard.
Nobody be alarmed by the next waves The Crisis of Unemployment- The Immigration Crisis, the revamp on Energy Crisis-And then the depending on just bad the 2010 elections look A great big crisis -Terror threats or International threat -my crystal is fogging . . .
Anybody willing to place a bet?
Damn I forgot to mention the VAT tax crisis mark my words JB- you start the prep work on the shows now
Bravo for Mr. Bachelor. He has (finally) come out of his upper east side intellectual abode and taken a stand and a damned good one at that.
And thank you Peter K aka Hu for your statement to lame-o BO.
I am more optimistic every day bec this ship of fools don't know (I guess) how stupid and ill-conceived their actions are. eventually even the dumbest American's will start to ask, WTF??!
And actually we don't need the dumbest (read hyper-lib's), we just need the "independents" and "moderates" to start questioning their decision last November to vote for change.
We've seen the effects of Holder's appointment (an affirmative action deal if ever there was one). think about it, bring a confessed, mass murdering terrorist to NYC for the same trial a citizen would receive, AG and POTUS declare the verdict is in the bag, declare KSM won't be released even if he's acquitted, willing to risk the whole case being thrown out bec of waterboarding etc. you couldn't make up this silliness. There's a reason Beck, OReilly, Fox viewership is growing. People are starting to tune in to find out what is going on. this doesn't seem like business as usual.
Gotta go; today I buy more gold, Canadian and Aussie dollars and stocks. I've concluded we've reached the tipping point. The ship of fools can't bring this back from the brink; I'm not too sure they want to.