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« Chickens Coming Home ... | Main | My Senior Seminar on the Great Depression »

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Two quick thoughts on Obama's "plan":

1. Funny how the left is willing to rush, rush, rush, into a stimulus plan with all kinds of dire warnings about horrible consequences if we don't ACT NOW, when that's EXACTLY what they (rightly!) complained about for the last 8 years with respect to the war. Don't we want to take our time and make sure we're doing the right thing here too before we rush to judgment? The lack of consistency here suggests to me that many on the left aren't really concerned with process. They really do believe that if the right people are in power, we can just charge ahead. (Anecdote: one very left friend of mine is very happy about how many "academics and scientists" Obama is appointing. After all, we need smarter people in DC after the last 8 years." The fatal conceit is alive and well.)

2. As many have pointed out, creating jobs is easy. Creating productive jobs is hard. What Obama et. al. seem to fail to understand is that the whole freaking mess came about because we "created jobs" - just in the financial markets not the "green" ones. There's no reason to believe the jobs created by a so-called stimulus will be any more "sustainable" than those created by the housing boom.

Alex seemed to pick out a few palatable sound bites. I wonder what the real costs of marginally fibbing at such a closed lecture are? Surely the guy knew where he was at. I wonder if we dismissed those careful word choices as outliers what Alex would have had to say about the remaining message?

I recall Bill Clinton's honeymoon plan -- a $20 billion injection into projects. And back then I argued it was ridiculous.

Anyone notice how the catch phrase is no longer "yes we can," but is now "only government can"? The soundbites gave me chills, and not the good kind. Fatal conceit indeed.

Pete,

maybe we just disagree about how bad the alternative is! Do note, however, that Obama has announced no new and big entitlement programs and no new and big nationalizations. Is this what you expected? Compare with Bush under which we have had both!

Yes, the program is going to get worse (see what the Senate Democrats want) but Obama is at least not leading the way. David Brooks had it correct today:

"Obama’s team has clearly thought through every piece of this plan. There’s no plank that’s obviously wasteful or that reeks of special-interest pleading. The tax cut is big and bipartisan. Obama is properly worried about runaway deficits, but he’s spending money on things one would want to do anyway. This is not an attempt to use the crisis to build a European-style welfare state."

http://www.nytimes.com/2009/01/09/opinion/09brooks.html

Obama is no libertarian so he is doing plenty of things that you and I would do differently but that's not news. What is news is that as bad as things are the fiscal stimulus is pragmatic and middle-of-the road and it is temporary stuff from which we can recover.

By the way, the idea that Obama would spin his remarks for a GMU audience is the most hilarious thing I have read in several weeks.

Alex

The ironic and sad part (to me) of the current situation is that it is very likely that Obama and massive government spending will get credit for the continued existence of the business cycle. Economic growth will eventually return, which is the part of the business cycle everyone loves and wants credit for. More than likely, some degree of growth will occur in the next 4 years, from which people will 'deduce' that it was the spending that did it. Post hoc ergo propter hoc. I applaud your hope in the face of this seemingly grim situation for believers in the market.

What worries me is the downside risk of moving precipitously. How does our nation respond to future crises -- in whatever form they may take -- if the stimulus package fails? The Obama proposal conjures up an image of a poker player throwing all his chips to the middle of the table, and yelling "I'm all in." Already, according to press reports, foreign investors have curbed their appetite for USG debt. Adding trillions more dollars in debt to the USG balance sheet over the next two years could, ultimately, lead to a tipping-point phenomenon, which would spark sharply higher interest rates and inflation. Will investors be naive enough to believe that Obama is serious about resolving our long-term fiscal problems? I doubt it.

One absolute last comment.If you feel marginalized now,how will you be treated when more trillions are on the line?Rolling your sleeves up?Others will roll up theirs and throw you out the window.Economics is obviously an Art to practitioners and a religion to the rest of us.Don't you see how powerful that makes you?The 'no bail out' calls received by legislators were in the 20:1 majority and in the hundreds of thousands.These doubting legislators are only human.They need 'permission' to state (and vote) openly how their personal beliefs guide them to do.You as 'ordained priests' have as much legitimacy as Bernanke (in the man in the street's mind).If you make a stand and approach legislators directly.It may bring other groupings of economists out to argue with your position.The public will see there are many dissenting groupings and the Fed will lose its aura of authority.The Austrian viewpoint IS common sense (praxeology).It fits with what the majority of Americans believe also.It's such a shame that you can't see that you can't lose and that this is your time.Please talk to Ron Paul and I'm sure he could arrange a meeting with those he knows/feels are unhappy with the leadership position.You think hard work is needed because your ego is invested in your art.You did the hard work in becoming ordained.Now you need to preach.

Signalling. How does the GMU administration really feel about the Economics Department and Law School? Besides sending out a signal to the rest of the world (both Obama by going right into the lion's den and GMU applauding his entry), is GMU also trying to signal that they are more than a "free market, ultra right wing" university?

Any thoughts on this, Pete?

Dave,

Are you being too subtle? What university administrator would spurn the PR of such a speech? There is a funding issue, too, I suppose. But I don't see why we need to look "deeply" at anything to explain why GMU would welcome Obama -- as well they should have IMHO.

reckless, not wreckless!

Stop being so dramatic!

Remember that we're not looking at the difference between a cataclysmic disaster vs an economic paradise.

We're looking at an Obama/Bush type regime damaging real economic growth 1 - 3% more than a Reagan type regime would damage it.

So it's not the end of the world, it's just that a few people will be a bit poorer than they would otherwise have been.

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