…to destroy the economy. There are a lot of other good suggestions in comments.
Seriously, if he really wanted to destroy the economy, what would he be doing differently?
[Update a few minutes later]
Now you own it, Mr. President:
The Dow Jones industrial average, actually, has reacted to Obama by plunging nearly 20 percent since he became president. That’s an obliteration of wealth that no stimulus bill will recoup. Since Election Day, the market has lost nearly 30 percent of its value—trillions of dollars, not from CEO bonuses, as you may have hoped, but from your 401(k) and the private sector.
“The stock market is sort of like a tracking poll in politics. It bobs up and down day to day, and if you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong,” Obama recently explained.
You know, Mr. President, not everything is like politics.
The market is a forward-looking entity, indeed, but it is driven by the decentralized actions of millions of investors every second. It’s the opposite of politics. And this setup surely offends the sensibilities of the statist planners occupying Washington. Unlike politicians, markets don’t lie. And this market has been in freefall for a year.
So, what to do? Obama, who promised not to raise taxes during a recession, now plans to raise nearly $1 trillion in new taxes directly from the investor class. He plans to raise capital gains taxes (a disincentive to investment), corporate taxes (for you, the consumer, ultimately to pay) and on the “rich” (which the nonpartisan Tax Foundation estimates will affect 1.3 million small-business owners).
This recession already has passed the 15-month threshold, the historical average for downturns. Most presidents helped ease us out of those tough spots by easing the burden on Americans. Obama has engaged in the opposite. That’s his gamble.
He forgot to mention the carbon tax, which will hit everyone, including the poor, in a quite regressive manner. I really am starting to think that Barack H. Obama stands for Barack Hoover Obama.
[Update a little before 2 PM Eastern]
Aunt Nancy says $1.6T isn’t enough.
These people bring to mind medieval doctors and leeches. Except they’re the leeches.
[Late afternoon update]
From Eric Cantor’s web site:
Just three weeks after President Obama signed his ‘stimulus’ bill into law, Congressional Democrats are already conceding that it will fail to achieve its objective. As the Speaker knows, the only reason to craft a second stimulus bill would be if the first one failed. Every Republican in the House voted against the first stimulus bill because we believed that Congress could do better, and we had a plan to achieve that goal. America does not need another massive spending bill, what we need is to create jobs.
Republicans developed an innovative plan to preserve, protect, and create twice as many jobs as the bill that Speaker Pelosi rushed to the floor last month. If Democrats believe that their stimulus bill has fallen short, then we should work together on the Republican Economic Recovery Act, which would revitalize struggling small businesses, help middle-class families, and immediately rekindle America’s economy and create jobs.
Don’t hold your breath.
Note that under the Tax Foundation’s rather expansive definition, Al Gore, Cindy McCain and Charles Rangel are all small business owners.
Cantor’s “twice as many jobs” claim is completely bogus — it’s based on a paper that estimated the job losses caused by tax increases in a normal economy, and turned that into a formula to predict the results of tax cuts in a deflationary recession. The Republican plan was never even scored by the CBO.
Yes, well, this is one more of that odd phenomenon I remember being discussed here in some other thread, that when people do marginally dumb things — i.e. things that turn out poorly, but ambiguously enough that it’s hard to be crystal clear about the dumbness of what you did — the normal human response is to double down on the dumbness rather than try something different.
You know, the compulsive gambler stops in at Vegas and plays roulette, although he knows he shouldn’t, loses $500, and then decides to fix his problem by betting everything he has, including gas money, on the next spin of the wheel. See, THIS time it’ll turn out different, and I’ll solve this problem AND the previous problem. Ha!
Krugman — not that I read him, but I read about someone reading him — said the same thing the other day. See, the problem with this stimulus is that it wasn’t big enough. The only difficulty with this logic is that if the stimulus were at least the right thing to do, only too small, there’d have been some movement in the right direction, and you could say ha ha, see, things are getting better, only not fast enough, so we need to do more of the same.
But that’s not what’s happening. Yet, still, the “solution” from the True Believers is to double down on dumbness. We only bet $1 trillion last time. Let’s bet it all this time! Brrr. And these folks criticize house-flippers and credit-swap speculators!
the normal human response is to double down on the dumbness rather than try something different.
That’s actually what the Roosevelt administration did throughout the Depression. It didn’t stop until they got into a real war against Germany and Japan that finally distracted it from making war on business.
The liberal reaction to the failure of gasoline as a fire-suppressent is we did not use enough gas in our previous attempt and should use more.
The consservative response is to try something else like fire-retardant foam or water.
Yes, well, life and death decisions have a way of clarifying things, don’t they?
I bet if the entire Obama Administration and Democratic Congressional Leadership were sentenced to hang on December 1, 2009, if the stock market were not above 9000 and unemployment were not below 7%, they would become raging tax-cutting pro-business libertarians overnight.
That is, I don’t believe they are so stupid and deluded as to believe their own hogwash right down to their core. They know very well they’re hanging a millstone around the economy’s neck, costing jobs and punishing capital markets. But they don’t care. They have ambitions — more government power for themselves, better status and pay for their supporters — and they actually don’t care that a bunch of plumbers and HVAC men are going to pay for it with their jobs, 401k’s, life savings invested in the new house. Can’t make an omelet without breaking eggs, y’know.
Yup.
Carl,
The number one person to hold accountable (i.e., gun to the “head”) is the Chairman of the Federal Reserve. His only task is to hold the dollar to a constant gold price, say $500 / ounce, plus or minus 5%. That way our money will be worth something 20+ years from now.
The losses over the last year are tough enough, but the expected inflation (e.g., the stagflation of Carter) makes one continue working at an ordinary job rather than starting a revolutionary business. One could also volunteer to do something special helping people, but with Obama, all help must come from government.
I’m wondering if Obama’s incompetence is more a feature than a bug. If we hate his policies that bad then, if anything, we should enjoy this floundering on his part. The longer he wastes time talking with meaningless flourishes, shutting whole parts of Chicago to have dinner, and charms us with pursed lip smiles then the more we can giggle at how his opportunity to ‘radically transform America’ will slip from his grasp.
Scott, given the abuses from Obama and congress, there’s not much the federal reserve can do to stabilize the dollar. Adjusting interest rates is no match for massive tax and spend abuse, potentially backed by government borrowing with no intent to pay back, amounting to printing more money.
Scott, you may be right — it sounds right that the only purpose of a central bank should be to stabilize the value of money, and to hell with alll this monetarist “steering” of the economy, almost as bad as the fiscalist buggers now in charge — but it could be that horse has already left the barn. The Fed has already emptied its credit laxative magazine into the economy, and it hasn’t worked. This is why the fiscalists have risen from the grave and taken over.
So….now what? They could certainly start, from here on out, to simply focus on stabilizing the value of the dollar, with respect to gold or whatever (I’d honestly prefer some basket of commodities to gold itself). But what about those trillions they already injected? If they do fire up inflation, do we tell the central bank to just sit tight this time, let it work itself out?
Maybe. At this point, we are so far from what’s known about complex economic systems, it’s all the purest guesswork.
Peter H,
Yes, you’re right about the government effectively printing money to “solve” the present crisis. I have no problem with “printing money” for some bank insolvency. If the FDIC runs out of money, they shouldn’t be raising the insurance rates to the members who haven’t done bad loans – this is effectively another tax on the righteous producers in America. What I want is depositors made whole, while stripping the bad guys (and, unfortunately the stockholders) of their assets. The FED did that in the S&L and Mexican bailouts in the 80’s and it was a blip overall. But to print money for waste like ACORN and Katrina victims should be stopped.
Carl,
The horse is out of the barn. My point is we need to control the other branch of government, the FED. Obviously Congress and even the Judiciary (lack of standing for Alan Keyes on the birth certificate controversy) are also out of control. The FED could be the ultimate “NO!” machine.
Note that under the Tax Foundation’s rather expansive definition, Al Gore, Cindy McCain and Charles Rangel are all small business owners.
What is “expansive” about that? They aren’t large business owners. Note that business size is determined by number of employees, not revenues. What’s your point?
Rand, last published information on Cindy McCain’s business reported about 650 employees: not a small business. However, she reported some rental income, so the tax Foundation counts her as a small business owner. Likewise, all the partners in an international law firm employing a thousand people count as small business owners by the Tax Foundation’s definition because they claimed partnership income. Same for S-Corp shareholders, no matter how large the corporation.
By the Tax Foundation’s definition, any amount of sole proprietor, partnership, S-Corp or rental income makes you a small business owner, even if 99.99% of your income came from something else. More than that, you don’t even have to have any net income from those categories, you just have to fill out that part of the tax form.
Are you saying that it’s not possible to be both a large business owner, and a small business owner (i.e., an owner of both a large and a small business)? Why not? And what difference does it make?
So what you are saying above is the the government didn’t spend enough and it actually took a war and a conversion of an insane amount of the US economy to being run by the government to end the depression?
I know you don’t think you said that. But you actually did.
No problem. Watching you melt faster than the stock market is funny.
Actually, Daveon, what Rand was saying was that the sheer urgency of the war — its enormous life or death stakes — caused FDR and the Democrats to ruthlessly jettison all the unworkeable academic theoretical crap (and dreamy impractical theoreticians) with which they’d been buggering the economy for the previous 10 years, and that, the abandonment of the New Deal path, is what allowed the economy to revive.
See, it’s one thing to make war on capital and indulge in a little Marxist class warfare when the only cost is you have bread lines and fruitcakes like Father Coughlin ranting on the radio. (Indeed, it’s unclear why those would be considered bad times by Democratic politicians. Their jobs were more secure than at any time before or since.)
It’s quite another to indulge such goofiness when the possible cost is losing a war and getting sent to the concentration camps by the victorious Nazis. I think the suggestion Rand is making is that the advent of a very serious, even personal threat to FDR and his more practical-minded cadre caused them to do some rapid rethinking of policy. OK, let the damn capitalists get rich and make money, if that’s the only way to get all those tanks and planes built in a right hurry. Humph.
I know you don’t think you said that. But you actually did.
I don’t think I said that, because I didn’t say that. As is often the case, I have no idea what manner of insane illogic causes you fantasize that I did.
go ahead guys the self delusion is really entertaining. Oh, and is that the stock market up and banks up 40% on the week??? Say it ain’t so Rand. Say it ain’t so.
Sorry Carl that dog don’t hunt. Regardless of the urgency the success was the shear volumes of cash injected in a classic Keynesian way backed later with massive cash for post war infrastructure spending both at home and abroad. But do carry on, please. This is most entertaining to watch.