On Loving and Leaving the Democrats

No derision from this quarter, the concern is easy to understand, even for liberals. But what was the alternative approach being proposed to deal with a dangerously crashing economy? Hands off and let the chips fall where they may? If that had been the approach and disaster had ensued, then what would we be saying about Obama's leadership today?

Also I wonder how many of the Americans who now complain about making sacrifices in the way of taxes and spending were cheering on the sacrifices being asked of other Americans in the way of blood? Which are the greater sacrifices and which are the more necessary?

I expect the process of turning the economy around will be a long and slow one. In a culture that has grown used to being gratified without delay, that prospect probably holds little appeal, but what are the choices?

I'm really not sure any more, JSpencer. There was a time when I thought I had a handle on this, but the truth is, I know so little about economics that I'm just confused these days. But I also know that there are so many professional economists on each side who completely contradict each other that this is clearly not an exact science. Should we have allowed a hands off approach, as you say, and let the chips fall where they may? Certainly I don't think that doing *nothing* was an option, but it seems to me that we are spending far, far too much and getting not nearly enough in return. Not just now, but the CBO projections down the road don't look very good either. And the debt!

Before you begin, let me cut you off and say that the Republicans did a horrible job of fiscal management too, but now it's shooting into astronomical proportions. We're going to be saddled with so much debt that it's difficult to see how even modest increases in GDP (the most we can realistically hope for at this point it seems) will be able to make a dent in moving that mountain.

I don't think we should have done nothing, but what we did seems to be far too much, too expensive, and not efficient. Again, I'm ignorant on the science behind this, but I suspect many of the people arguing with me aren't much more expert. Things look bad right now, at least to me, and the path that Obama and the Congress are charting seems like it could actually make it extraordinarily worse a few years down the line.

Well, let’s see where we’re at today…….

Jazz is backpeddling because he cast a vote based on liberal stereotypes of conservatives rather than facts.

JSpencer still believes the strawman that it was either Obama’s stimulus or nothing on the economy.

The walking, talking Senatorial Buffoon, John Kerry, has made an incredibly lame attempt to counter Sarah Palin’s OpEd.

We now know Barack Obama throws like a liberal (and has audible boos as he takes the field?)

Oh yes, this is shaping up to be a good day.

I share concerns with the debt. The problem is that was a problem President Obama was handed when he walked into the Oval Office. The choice was basically adding a large amount to the debt and try to soften the economic decline, or leave the debt as is and let the economy continue to tank. I think the stimulus was far from perfect - too many tax cuts and too little spending - but it was needed and frankly we could have used (IMO) a larger stimulus package.

GDP is defined as Consumption + Investment + Net Exports + Government Spending. Consumption (the driver of our economy) is down and due to unemployment, stagnant wages and fears over the economy is not likely to come up soon. Net Exports isn't going to change much with China keeping the exchange rate low by buying our debt. Investment may increase as people save more but probably not enough to counter act the decrease in consumption. So that leaves government spending as the only way to try and minimize the economic downturn.

Are we getting enough for what we spent? The banking industry seems to have stabilized which is a relief since the bank failures during the Depression made things that much worse. Many are even starting to pay back TARP loans. The economy still stinks but we don't seem on the verge of a collapse and many indicators are suggesting that while this will be a slow recovery, recovery may be coming soon.

And ultimately with any type of stimulus you aren't going to see a huge impact in a couple of months. The economy doesn't work that way. A stimulus basically relies on the multiplier effect where money is put into the economy, that spending is re-spent over and over again (albeit only a percentage which is determined by the marginal propensity to consume). That takes time. Yes we'd all love to see 4% growth and declining unemployment after a few months but that isn't going to happen. It is going to take time. In a year we can maybe start discussing whether the stimulus was worth it but not after less than 5 months.

Doing 'nothing', or very close to it, was what was needed. Unfortunately, it was needed over the past 15 years or so prior to Congress deciding that the credit, banking and mortgage industries were toys they could direct to their ends.

But even after everything started going south (during the middle of the Bush years, to be certain) the unwillingness to accept short-term pain so that the economy could emerge stronger in the end is symptomatic of our current culture.

When the fundamentals get too weak, then a culling HAS to occur. When things are in the state they are now, throwing money at the system does not help, especially when the money does not exist, nor does massive new spending and tax programs.

Already we are seeing the beginnings of the problems the most recent interventions cause.

Unemployment is now significantly higher than the 'worst case' estimates of the Obama administration itself if we had done nothing.

The bond market has collapsed, the US is printing money to buy our own bonds, and international calls to diversify away from the dollar grow stronger every day, as confidence in the US and the direction of our government causes massive concern.

The stock market has had its dead cat bounce, and investors now show no confidence that things are improving.

The economy continues to shrink, and the whole stimulus and current budgets of Obama, built on the premise of rising tax revenues, has been shown to be a house of cards: http://www.bizzyblog.com/2009/07/13/this-is-wha...

Jazz -- Your words reflect my current state of mind with remarkable (frightening?) precision. Thanks for this, including the longer commentary at PM.

The stimulus struck me as extraordinarily cynical. *Anything* Obama did on taking office would set him up to take credit when the economy recovers, as it always does.

jwest said: "We now know Barack Obama throws like a liberal (and has audible boos as he takes the field?)"

I don't know what that has to do with anything (throws like a liberal??) but hey, whatever. Congrats!

Instant gratification and "creative" accounting started this financial mess. And as AustinRoth points out, doing nothing should have started 15 years ago. Our country built an economy on the bubble, big but thin and weak. We called the bubble good times. And even some of the most financially prudent people fell into the good times song and dance. Now we are in the suffering period. I have accepted it fully and completely. We are going to suffer and suffer hard. The culling in our economy will keep occurring until we get where we should have been. But after the culling, we will have tremendous debt.

I don't place all the blame on Obama, Bush, or Clinton. I place it squarely on all of us living the fake life (some much more fake than others) on the bubble. Let's receive our comeuppance with a brave face and plenty of fortitude.

Sorry for the doom and gloom but hey, that's just the way I see it...

Clearly, the solution is for voters to demand tax hikes and spending cuts. Then the politicians will have a mandate to fix this mess!

*snicker*

"I place it squarely on all of us living the fake life (some much more fake than others) on the bubble"
Great Comment! Many Americans and our politicians have been leaving the "dream" while creating this massive debt problem.

The problem with our bailouts is that a lot of the money has been poorly managed by the government. If you are going to do a stimilus package, you damn better start creating jobs ASAP...not in 2010. If you are going to give banks billions of dollars, you better have serious strings attached and there better be serious oversite. We did none of these things.

I don't think doing something was the problem...I think how we managed what we did was the problem.

We would have been better off dropping billions of dollars out of airplanes.

But even after everything started going south (during the middle of the Bush years, to be certain) the unwillingness to accept short-term pain so that the economy could emerge stronger in the end is symptomatic of our current culture.

I agree with Austin Roth about this.

In fact, I would go even farther. In our culture, we think we can have wars and tax cuts at the same time. We score points by complaining about forcing our grandchildren to pay our bills, but never give serious thought to paying those bills ourselves.

Hold on there, buckaroos.

Jazz, Pete Abel, T-Steel and droves of others all are starting to realize the mistake they made believing the hype coming from the left about Obama.

Now, the self-flagellation begins. Jazz wants to slip back under the “big tent” into the warm arms of conservatism. Pete is pleading temporary insanity. T-Steel is embracing the self-loathing ways of the liberals and looking forward to some well deserved suffering.

Well, not so fast.

As any good country club republican can tell you, we don’t just throw the door open for people who have danced the tango of infidelity to the party. Spend some time peering over the fence, scratching at the front gate before we decide whether we want you back or if you’re doomed to the purgatory of moderate politics.

Yes Jazz, like any gang, the Rep party requires that you be "jumped in" to the party.

Blood in, blood out.

We score points by complaining about forcing our grandchildren to pay our bills, but never give serious thought to paying those bills ourselves.

Who's "we", George? This is precisely the argument we've been having on health care. You and other folks on the left have been advocating insuring ourselves against our bills rather than paying them (through the government, since the private-market premiums would obviously be too high). All the calls to quit trying to pass the buck and to own up to the bills have come from us fiscal conservatives.

May I hope you're now renouncing the dark side and joining us?

It's good to know that there are still people who still vote and support those politicians who are most allied with their personal beliefs and not just based on which party are in.

Nice analysis Jazz and it illustrates the quandary libertarian-leaning voters had the last election. Neither party has been fiscally responsible. In addition I believe both willingly trample on individual rights if it furthers their goals.

Obama's handling of the recession sacrifices long-term growth to avoid short-term pain, something his own projections admit. He gave congress a blank check on the stimulus package and budget, rewarded both his UAW buddies and the banks, appointed himself as a bankruptcy judge, took over 2 auto companies, and is demanding a health care plan with little planning or deliberation. While he inherited an awful situation, he is doing his best to make it worse.

The economy will eventually recover as Dr_J says, and it will be difficult to measure how much harm or good Obama did. We can be pretty sure he will take credit for the good and blame the bad on the Bush administration.

"The stimulus struck me as extraordinarily cynical. *Anything* Obama did on taking office would set him up to take credit when the economy recovers, as it always does." (@ Dr. J)

This strikes me as rather humorous, considering that this very thread proves otherwise. The last pres basically broke the world and handed it to Obama, and *nothing* he could have done to try and fix it would have been quick enough or painless enough. I guess it's not surprising that an article such as this would be posted by someone who is at heart a conservative, but for those of us on the other side of the divide, who actually believe strongly in the tenets of liberalism and progressivism, most of us realize that criticising the approach a mere five months after the biggest economic meltdown in 8 decades is deperately premature. Again, I'm not surprised that conservatives who decided not to vote for McCain are doing so, and indeed it was very easy to predict, but I still think it's kind of silly.

Broke the world? What melodrama. The most broken thing was the financial markets, which were supposed to be fixed by Bush's TARP, not Obama's stimulus.

jwest said: "T-Steel is embracing the self-loathing ways of the liberals and looking forward to some well deserved suffering."

That is HILARIOUS! But anyways let's talk about self-loathing. You are correct, I do have some self-loathing and I'm "looking forward to some well deserved suffering". But not in the ways of the liberals as you say. I am angry at myself for falling into some of the financial traps that were part and parcel of the financial industry (with Congress' blessing). And suffering is not necessarily a bad thing IF one becomes stronger for it. I've taking financial hits (failed business, maxed out credit cards, overspending), and I'm paying for it. BUT I've pulled myself up by my bootstraps (conservative love) and are forging ahead (glad I didn't buy a house).

In my opinion, there isn't enough self-loathing in the financial industry and Congress concerning the economy. If there was, maybe the stimulus bill would have been a straight jobs bill (less money). And jwest, please read the post below before you peg me as staunch Obama supporter:

http://themoderatevoice.com/23697/i-early-voted...

jwest: "Jazz, Pete Abel, T-Steel and droves of others all are starting to realize the mistake they made believing the hype coming from the left about Obama."

I think you're the one that needs to "hold on there".

Just because a group of us agree on economic issues doesn't mean we'd want into, or back into in some cases, the --as you put it-- GOP Country Club.

What was McCain's plan? Pretty much the same thing as Obama's iirc. Austin said it well, this has been a long time coming and can't be blamed on Obama or Bush alone.

Pointing fingers isn't going to solve anything. How about the GOP Country Club come to the table and have a rational discussion on fixing the economy instead of throwing a tantrum?

"Doing 'nothing', or very close to it, was what was needed. "

Yes, because letting people lose out on things like COBRA, unemployment and such was really what was going to help. And it isn't like our infrastructure didn't need some help also. The collapse of the 35W bridge in MN (and the multiple bridges that were subsequently found to be in dire need of repair) must just have been an anomaly.

"When the fundamentals get too weak, then a culling HAS to occur. When things are in the state they are now, throwing money at the system does not help, especially when the money does not exist, nor does massive new spending and tax programs. "
That doesn't mean the government can't try to lessen the impact. And you might want to review your history. Throwing money we didn't have at the system was the main reason we got out of the Great Depression.

"Unemployment is now significantly higher than the 'worst case' estimates of the Obama administration itself if we had done nothing. "

Which doesn't mean the stimulus caused it. It might just mean that the Obama administration misread how bad the situation was.

Throwing money we didn't have at the system was the main reason we got out of the Great Depression.

You need to go read yours. The Roosevelt programs were failing miserably. Throwing money around we didn't have was the CAUSE of the Great Depression, which was ended by WW II.

Perhaps we should attack China.

Dr J--

This is not the first time I've asked this question. In fact, a few weeks ago, I asked it of you, a thread about health care.

On a previous thread several weeks ago, you brought up the idea that people not born would be stuck paying for our bills:

Well, I mean you and I save money, them not so much. Best of all, those people haven't been born yet

In response, I asked:

Maybe you think the people currently alive should suck it up and pay more taxes now so future generations won't get stuck with our bills?

I'd still like to know your answer to that, by the way.

As to the question of who "we" is, it's us, what Austin Roth called "the current culture" in the comment I was replying to.

Austin Roth--

When you say the Great Depression was ended by WW II, don't you mean it was ended by the massive federal debt that was incurred to fight WW II?

When you say the Great Depression was ended by WW II, don't you mean it was ended by the massive federal debt that was incurred to fight WW II?

Haven't you learned yet that money spent blowing other countries (particularly when they are full of brown people) to smithereens is money well spent, but money spent improving the life of Americans (doesn't matter whether that money is spent improving the physical, social or educational infrastructure unless it's prisons) is money wasted.

When you say the Great Depression was ended by WW II, don't you mean it was ended by the massive federal debt that was incurred to fight WW II?

Not all debt is equal GS, as you very well know. The single biggest difference between then and now is then those who lent actually believed they would get paid back.

Maybe you think the people currently alive should suck it up and pay more taxes now so future generations won't get stuck with our bills?

What I think is we should be honest about what the costs are. People claiming entitlement programs are paying or will pay for themselves are being deceived or less-than-honest themselves about costs. People implying Europeans live to 150 are not being honest about benefits. People citing poll results that 70% of the public supports free ice cream aren't encouraging an honest analysis of trade-offs either.

If we could have such a dialog, the result might be give and take in a number of dimensions. They might involve raising taxes, or lowering expectations, or embracing more serious systemic reforms. We might even decide that our grandparents had it much worse than us in every dimension, our grandchildren will probably have it much better, and we really are going to stick them with a bunch of bills. I'm not necessarily against any of those outcomes, but who knows? It's a conversation we're not having today.

Austin Roth--

Sure, some debt is better than other debt. But the distinction between good debt and bad debt is mostly subjective.

If you had a good job in 2007, lost it in 2008, and were in danger of losing your house in 2009, your subjective view of the Bush and Obama stimulus packages might be somewhat different than it now is.

(Not that I'm wishing anything bad on you, of course.)

I agree with what JSpencer said in the first comment to this thread. Both Bush and Obama responded with the conventional wisdom for dealing with recessions: increased government spending.

I also agree with JSpen's nervousness about the level of debt. It's possible that Obama's policies will fail.

If so, then what?

The notion that Republicans are somehow the party of fiscal responsibility is not supported by evidence.

The single biggest difference between then and now is then those who lent actually believed they would get paid back.

The Federal Government has been issuing bonds of one sort or another for the last 225 years, and it has never defaulted, not once...

With that kind of track record, everyone who is loaning money to the Federal Government expects to be paid back. If for some reason the Federal Government was unable to pay back the federal debt, it would be the least of our problems.

Dr J--

I agree with you that we, as a culture, aren't honest about what the costs are. And I agree with you that the result of such a dialog might take any of the dimensions you suggest.

But I'm not aware of anybody at all implying that Europeans live to be 150 years old.

Right?

But I'm not aware of anybody at all implying that Europeans live to be 150 years old.

Jeanne Calment, World's Elder, Dies at 122

That's the best they have been able to do, a measly 122 years. Imagine how long that woman would have lived, had she had access to American know-how and medical care.

Sorry if my meaning is too hard to apprehend, there, George. I'll be more literal. People who pronounce Europe's health care systems hands-down better than ours, people who claim porkbarrel giveaways and long-term capital projects provide short-term stimulus, and people who paint the government-programs-yet-to-come as more efficient and reliable stewards of our interests than those run by the politicians we have are all either dishonest or ill-informed about the benefits of the policies they're championing.

Dr J--

Maybe people who disagree with you should be allowed to make their own arguments?

; )

You are the master of the cryptic comment, George. Perhaps you mean to imply I'm standing in their way somehow? Those arguments have all been made on these very pages, it's not like I'm making this stuff up.

GS - please find the post where I said Republicans were the embodiment of fiscal restraint. I believe I have used the same expression against both sides, that they are giving drunken sailors a bad name.

I am not saying that the Republicans would have done necessarily anything different than Obama (execpt i really don't think they would have taken over GM/Chrysler, ignored bankruptcy law concerning debt seniority, and handed the company over to the unions. I really don't)

I am the 'A pox on both their houses' guy, remember? They are the opposite sides of the same coin. I think the entire government is subverted and corrupt.

And if I were to lose my job and find myself on the edge of being destitute, would my views change? As our newest Senator used to say, "When I was young, I protested against the draft. But now that I have turned 27 and am no longer eligible, my views have changed dramatically."

DQ -

Well, China is sure getting nervous now, as are a lot of other countries.

Remember, past performance is no guarantee of future results!

Well, China is sure getting nervous now, as are a lot of other countries.

They can stop buying anytime they want, nobody is putting a gun to their head, US debt pays damn near zero interest, is denominated in US Dollars and sells like hot cakes.

Oh, that's right if they stop buying our debt, we won't be able to buy their crap and their export dependent economy will collapse, cry me a river...

US debt pays damn near zero interest, is denominated in US Dollars and sells like hot cakes.

Um, yeah, that is why recent bond sales have tanked so bad we had to have the Treasury print funny money to buy our own debt.

http://www.telegraph.co.uk/finance/financetopic...

http://www.bloomberg.com/apps/news?pid=20601087...

http://www.nationalpost.com/rss/story.html?id=1...

Austin Roth--

I was actually directing my comment about Republican financial irresponsibility to the whole vast internet, not you.

Since you have comments on this very thread complaining about that, I guess I thought it obvious that I wasn't talking about you. Sorry to be sloppy.

Dr J--

So, who made the argument that Europeans live to be 150 years old?

You're obviously exaggerating and caricaturing the arguments you don't like.

Yes, George, it is a caricature. No one literally polled about free ice cream either.

NP. You had just made the post as a 'reply' to mine, so I 'assumed' you were talking to me.

Time to go to a new thread. This one has gotten...tedious. Let's dance, my little Sprockets!

Thank you, Dr. J, for your extremely astute observation that I was using hyperbole. You sure are clever to have figured that one out.

"Let's dance, my little Sprockets!"

You know you crack a lot of us up, right? (Even though most of us are probably a little 'cracked' to begin with. )

If anything, more and more of the public will realize that the Democrats have left them, except to tax them.

Thanks, Roro, I picked it up from George. Your claims to be advocating liberalism by taxing everyone for the next generation were hyperbole too, right?