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Obama's Economy: The Green Shoot Fallacy

In an earlier post I posited the question of what motivated congressional Democrats and President Obama to promulgate policies that hindered taxpayer's ability to pay off the substantial amount of debt assumed by families during the past several decades. The question was framed in a manner that called for a choice between higher government spending or immediate tax reductions as a means of improving the economic well being of Americans.

Clearly this line of inquiry is not simply an academic exercise. The unanimous opposition of House Republicans to the Stimulus Legislation revealed a fundamental divide in the electorate as to how an economic downturn should be addressed in Washington. However, there is more than just a political policy debate at work in this discussion. The U S economy is now two years into a recession that is accompanied by the worst unemployment seen in decades with almost 15 million people unemployed. Eighteen U S states have unemployment rates in excess of 10 %.

Employment recovery may be very far off:

Most of the country -- 286 of 325 metro areas covered in the IHS analysis_ aren't likely to regain their pre-recession employment levels until at least 2012. Of these areas, 112 probably won't return to their recent peaks until 2014 or later. These include Rust Belt towns such as Cleveland, Dayton and Akron, Ohio; Detroit, Warren and Flint, Mich.; the hurricane-ravaged Gulfport-Biloxi, Miss., area and the greater Los Angeles region, where the housing bubble and high unemployment have strangled the local economy.....

There are other signs that economic conditions are worsening, contrary to the jaw boning by the Obama administration and the Fed about "green shoots" of recovery. The evidence, and the analysis of heavy industry leaders, tells a different story:

"I am not particularly of the green shoots group yet," [General Electric Co. Vice Chairman John] Rice said today to the Atlanta Press Club, referring to a phrase used by Federal Reserve Chairman Ben S. Bernanke that described signs of a nascent recovery. "I have not seen it in our order patterns yet. At the macro level, there may be statistics suggesting the economy is starting to turn. I am not seeing it yet."

Also:

[Talk of a recovery] was fun while it lasted but if the latest set of data couldn't kybosh the 'green shoot' theory, then FedEx sure did when it posted earnings results that fell well short of target and the CEO announcing that the economic backdrop was "extremely difficult".

In that the President's budget forecasts call for a recovery in late 2009 and robust 3.5% GDP growth in 2010, this recent news should give anyone pause to think the worst is behind us. That the president is considering another multi trillion dollar spending program (under the guise of "health care reform") in the face of this continuing economic deterioration is appalling. Even with strong GDP growth this level of spending is unsustainable. But in a recession? Where are the adults?

If power is what motivates the Liberal left to implement the abovementioned policy then we would all be wise to remember Lord Acton's admonition that power tends to corrupt, and absolute power corrupts absolutely. As some voters begin to catch on, others need to start ringing the alarm bell. The present levels of fiscal and monetary irresponsibility are taking this country well beyond the 1970's era economic stagnation and into uncharted territory.


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Comments (8)

The Obamalala people knew t... (Below threshold)
MPR:

The Obamalala people knew this was straight out of Lala Land. They made their projections based on 4% growth. We had that when Bush got the tax cuts through after the Clinton recession and even after 9/11 the country pulled out because the economy was growing. (Don't start with the whimpering about the recession Bush inherited because we had two consecutive quarters with negative growth which is the the definition of recession). Bush and Obamalala and McCain for that matter were duped by Treasury and the Fed into thinking we had to bail out the financial sector of this country quickly to survive. And that may have been true as far as the credit market was concerned but, the way Obamalala and crowd followed up with unheard of deficit spending shocked the country and the world.
Monday if Obamalala were to announce a spending freeze and tax cuts across the board(with out the tax cuts for the rich BS) the market would explode, businesses would begin to draw money into the country and start hiring again with expansion. He won't so it is a safe bet for me but, his so-called economic team know this is the way out of this depression. And they won't say anything because they know Obamalala would let the country slide into the bottomless pit before using supply-side economics. Or worse yet, appear to vindicate Bush.

sorry to be O/T, but the ev... (Below threshold)

sorry to be O/T, but the events of the day seem to cry out for it...

Obama's cushy seat on the fence regarding the people of Iran crying out for ANY freedom, is an insult to every American President (ok, maybe not Carter).

the whirrrring sound heard near John F. Kennedy's grave the past few days is him spinning at high speed...remembering his innauguration speech:
"Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty"

58 years later Barack Obama's immortal words have replaced those:
"I'll have a double butter-pecan...and make it SNAPPY, my man!"

Hey Hugh! You better watch... (Below threshold)
GarandFan:

Hey Hugh! You better watch it! The Obamalama says everything is okay. And when The One says everything is okay, everything is okay! The One talks, it becomes FACT! Just ask the MSM.

Major turmoil in the mid-East, and Barry's out for ice cream. Can anyone say PRESENT!

This economy is going to co... (Below threshold)
MichaelR:

This economy is going to continue to suck right through the 2010 elections where the liberals will lose big time and will suck some more up to 2012 where the messiah Zero will finally be shown the door for his incompetence.

@GarandFan - your hatred is... (Below threshold)
Jake:

@GarandFan - your hatred is showing:

"Major turmoil in the mid-East, and Barry's out for ice cream. Can anyone say PRESENT!"

Even I defended Bush against claims that he was spending too much time on the ranch in Crawford. Presidents are not robots, and we don't elect them on that basis. We want and like and support people we believe have a more rounded view of the world than all policy all the time. Getting ice cream with his kids is part of being human.

If you're making the claim that Presidents from any party should be sequestered to the White House for the duration of their term, then fine. It's a stupid idea, but at least you'd be intellectually honest. Otherwise, move on.

If you had some sort of proof that he was ignoring crucial WH business in order to flitter off for an undeserved break, then that's something all together different.

As it is, you're simply glomming onto an idiotic meme no different than the old standby meme, equally ill-researched, about Illinois state politics and their legislatures tactic, used by BOTH parties on a regular basis.

As I see it, we are heading... (Below threshold)
Jorge Anzola:

As I see it, we are heading for economic disaster. Obama had a simple decision with incredible effects, either reduce taxes or print money to stimulate the economy. Unfortunately, his decision to print money, a decision that Bush would have also made, makes him another tipical politician... choosing the easy way out and leaving the problem for future generations...

This whole idea of green jo... (Below threshold)
Flu-Bird:

This whole idea of green jobs is acrock of bull kaka based on some rediculous crap from the green nuts with compost for brains

With more availability of h... (Below threshold)
Steph:

With more availability of health insurance low income Americans won't get bogged down in medical bill debt which would allow them to spend their money in other arenas that would help stimulate growth.
That said, depending on which poll you look at, Americans are split on whether they see the economy turning around soon or whether they feel the first stimulus left them hanging.
http://tinyurl.com/nqh6dh




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