Monday, October 24, 2011

Mr Obama, You're No Reagan!

Deroy Murdoch, a most astute man, does us a favor by assembling a concise catalog of Obama's economic blunders...
"Under Obama, federal spending has risen from 20.7 percent of gross domestic product to 25.3 percent, Washington’s largest slice of apple pie since 1945."

"Obama’s spend-o-rama includes federally funded green jobs that Boskin dismisses as “the leprechaun economy.” The apotheosis of this blarney was last month’s $1.2 billion Energy Department loan guarantee to SunPower Corporation of Richmond, California. Its solar-equipment project promises 15 permanent positions. Cost per job-created: a staggering $80 million." (NRO-Deroy Murdock)
Reagan's Recovery vs. Obama's Sagging Non-Recovery
Boskin compared snapshots of Obama’s and Pres. Ronald Reagan’s post-recession recoveries, 27 months after each downturn hit bottom.

In September 2011, on Obama’s watch, non-farm payrolls had grown 0.6 percent, yielding 841,000 jobs since June 2009.

Under the tax-cutting, business-boosting Reagan, non-agricultural employment swelled 8.7 percent, generating 7.7 million new jobs. (NRO-Deroy Murdock)
How Mr. Volker Would Fix It

Reading that comparison reminded me how Obama, to much fanfare, brought the venerable Paul Volker on-board as a convenient counter-weight to his socialist advisers who were discomfiting those serious people not in a hopium-induced daze those first heady days of the Obama Presidency.

It calmed people down, and then Obama proceeded to completely ignore the former Fed Chair who tamed Carter's dreaded stagflation and ushered in the historically-unprecedented Reagan economic boom. Volker has offered his advice on how to fix this mess. It's too wonky to go into here, but it involved breaking up anyone too big to fail, no more government underwriting Wall Street gamblers, putting the different financial functions into their own boxes and jailing those who stray, among other things. You can read the whole thing here: Volker's Advice.

Free Market Ideas for Increasing Employment

For the libertarians among us, taking advice from a former Fed Chairman just won't do, so Reason Magazine has an article entitled Get a Job! that is chock full of free-market remedies sure to get people back to work.

The ideas are too simple-minded and timeless for the progressive eggheads powering Obama's economic failure: Less regulations, less government intervention in the marketplace, no more government bureaucrats picking winners and losers...

Free marketeers know that government cannot power the recovery.  The path to economic success begins with economic freedom. Bill Frezza explains:
Do you sometimes wonder why economists are accorded such respect and influence given the fact that they claim knowledge over the unknowable, promote theories that are untestable, and make forecasts for which they are never held accountable? Isn’t that the definition of a witch doctor?

If engineers were held to the same standards, bridges would collapse as often as banks, planes would fall from the sky (if they ever got off the ground), and cyclical blackouts would be a permanent feature of our electrical grid. But at least they would get to visit the White House.
This gets to the heart of why we should take all macro economic advice with a grain of salt.  It is a soft science, useful for gaining insight, but incapable of predicting market behavior.  Government-planned economies fail, free markets succeed. 
Have you ever watched engineers from different schools argue on Sunday morning talk shows about the validity of Bernoulli’s Principle or Ohm’s Law? No? Yet economists, like rival witch doctors, get red in the face promoting diametrically opposed economic remedies, sometimes sharing Nobel Prizes in the same year for theories that directly contradict each other. Take $2 trillion and call me in the morning. (Bill Frezza - Fundamental Fallacies of Macro Economics)


Ducky's here said...

Yes sir, Saint Ronnie Raygun, who appointed Alan Greenspan to head the Fed and the rest is history.
Pump those equity bubbles.

Deroy "Short Bus" Murdoch believes that the two economic downturns are necessarily equivalent. He's sufficiently simplex to be a right winger.

Now why did spending rise? Maye the Medicare drug bill isn't off budget any longer. Maybe the asinine wars aren't off the books any longer.

Then there's the fact that Saint Ronnie Raygun was borrowing at over 10% wile Obummer is borrowing at under the rate of inflation.

Murdoch is an ass but you're right, Volcker isn't. Why Obummer decided on the Goldman Sachs crew is unknown. But just like Libertarians and their "less regulation" mantra let's try something that is known to fail miserably.

Did Saint Ronnie Raygun face an economy with a significant portion of the nation's mortgages underwater and personal debt at 120% of GDP? Deroy Murdoch is a assrack.

Anonymous said...

Having been in a family business, I can vouch for the fact that few rational folks should be willing to commence one. What once was a pleasant enjoyable experience that employed many, turned into a beaurocratic nightmare. I enjoy your Economic posts, however it doesn't take an Economics degree to know that it is the Government that is standing in the way of job creation. Just try being self-employed.

Silverfiddle said...

@ Ducky: Then there's the fact that Saint Ronnie Raygun was borrowing at over 10% wile Obummer is borrowing at under the rate of inflation.

Which means absolutely nothing. This is an msnbc talking point to dress up the fact than Obama has racked up more debt than Reagan and Bush combined, and he's done it in only a few short years.

As for the rest of your crusty comments... stale rehash.

Silverfiddle said...

Thanks Bunkerville. As anyone who is educated in economics would immediately detect, I am not an economist, not do I play one on TV, which is why I rely so much on the smart people when I do one of these posts.

It boils down to a simple fact: A market is so complex, with so many data points and signals, that no entity can replicate it or outperform it. It is an organic thing, with millions of people making millions of decisions daily.

It is folly to think an economy can be centrally-planned.

Anonymous said...

You're so right, Bunkerville. I was a partner in a small printing and publishing business for ten years. We paid five employees a living wage, paid rent, utilities, insurance, bought and maintained necessary equipment at great cost. We published a local newspaper and two periodical journals distributed in a tri-state area, and did job printing for local businesses, clubs and service organizations. People liked us and gave us enough business to keep the doors open for ten years.

If it hadn't been for the time, energy and money we were forced to expend because of stifling government regulations -- federal state and local -- we might have succeeded, but ultimately the financial strain imposed by government and the crushing burden of having to account to them monthly for every move we made -- all of which took valuable time away from productive work -- caused us to fail.

In that ten year period we provided a decent living for five employees, but never netted a dime for ourselves. Three-hundred-thousand dollars of capital -- most of which had been earned and saved by my business partner after decades of slaving away in the advertising business -- was shot to hell.

Fortunately for me I had made a tidy sum rehabilitating dilapidated houses in up-and-coming neighborhoods, which was still a great thing to do in those days. He very sadly had to declare bankruptcy, and had nothing to live on but Social Security.

Every word you wrote is true, Bunkerville. The federal government is downright evil. State and local government only adds even more layers to the burden under which small business owners are forced to stagger as they fight an uphill battle to remain viable every day of their lives.

I suspect, as times get worse and worse, we'll see a tremendous increase in the rise of black markets,bartering, and "illegitimate" enterprise in the underground economy. In other words, because of the strangling effects of government overreach we will be forced to live like Gypsies in the land our forefathers labored, then fought and died to hand down to us.

Those who work for the government -- or for large multinational corporations -- have no idea what it takes to make an effort to achieve autonomy and financial independence.

Everything seems weighted to destroy even the possibility of wanting to dream of exerting individual initiative.

Why are there no Whitneys, Fultons, Marconis, Wright Brothers, Edisons, Graham-Bells, Alexander Flemings, Jonas Salks or Steve Jobses today?

Because everything has been bought up and thus controlled by the self-serving international bankers, corporate vested interests and the Almighty Government those vast, unaccountable powers effectively control to our great disadvantage.

It's not so much Big Brother who makes our lives miserable as Big Daddy.

~ FreeThinke

Anonymous said...

It would be comical, if it weren't so tiresome, the way liberals vainly imagine the repeated use of childishly insulting and dismissive titles like "Saint Ronnie Raygun" or the cryptic "assrack" [Do you think the contributor could possibly have meant to write "assCRACK?"] lends weight to their arguments.

Will they never learn that this adds nothing of value to any discussion and serves only to detract from any credibility they might once have had?

Such tactics give us the moral equivalent of fly specks on a windshield.

~ FreeThinke

Anonymous said...

By the way, I have heard repeatedly on talk radio and elsewhere that Obama has spent more in the first two years of his residency than ALL OTHER PRESIDENTS COMBINED.

Could that possibly be true?

If so, where could one go to obtain verification?

Has that statement taken into account the ravages of inflation, which stands at about ONE-THOUSAND PERCENT since my immigrant grandpa was able to raise eight children in New York City on 20 bucks a week?

Help us out, please. I'd like to know the truth -- not some skewed left wing or right wing propagandized version of it.

It's time we stopped playing childish games and got down to brass tacks.

~ FreeThinke

Anonymous said...

I wish those Americans who continue to support big nanny government could come down to Venezuela and see how well central planning is working out for an oil exporting country. In spite of all the wealth generated by the highest oil prices in history, this country must pay between 12 and 14% on their bonds. That should tell people something I would think. Reagan was right. GOVERNMENT IS THE PROBLEM, NOT THE SOLUTION!

Silverfiddle said...

@ FreeThinke: It's time we stopped playing childish games and got down to brass tacks.

Did you mean to say "ass cracks," or maybe "assracks?"

Sorry, couldn't resist. ;) I thought your original comment on The Hackneyed Duck was funny and apropos. What is an assrack anyway?

Anyhoo, here is an answer for you from PolitiFact

Seems the "Obama has spent more than all other presidents combined" came from the bete noir of the left, Sarah Palin.

Politifact knocks down her comment as factually incorrect. Obama has not racked up more debt than all other presidents combined.

the debt he accumulated amounts to either 54 percent of his predecessors’ combined debt (using the public debt figure) or 35 percent (using gross federal debt).

See? His spending in two and a half years (out of a total of 221 years of US presidencies) accounts for only 1/3 to 1/2 of our debt.

Seeing as how he's been president for about 1% of total presidential time, that's still an impressive amount of debt!

So There!

Anonymous said...

Thanks, SF. I'll bookmark Politifact. Bound to come in handy.

Sarah Palin!

Now there's a dame whose penchant for exaggeration class lacks. (:-o

Sorry for all of today's crass cracks.

~ FT

PS: Could an assrack be a row of barstools maybe? By the way, Confucius say, " Wise man stop drinking when glass cracks."

Infidel de Manahatta said...

Wasn't Mick Jagger going to be an economist?

This explains so much.

98ZJUSMC said...

SF says - This is an msnbc talking point to dress up the fact than Obama has racked up more debt than Reagan and Bush combined, and he's done it in only a few short years.

Is that where the artsy types go for their biting and incisive political commentary?

Who'd a thunk it?

Saint Ronnie Raygun

LMAO. It never gets old. Nevah!

Deroy Murdoch is a assrack.

House-sitting Krugman's cat today?

Always On Watch said...

Today, at the dentist's office, I had to wait a few minutes. A copy of today's Wall Street Journal was on the reading table in the waiting room. I read this essay. Excerpt:

Obama's Re-Election Model Is FDR

With the economy sinking in 1937, Roosevelt accused business of sabotage.

President Obama is cozying up to the "Occupy Wall Street" movement, intending to make resentment of big business a central theme of his re-election campaign. Here he's following the lead of Franklin D. Roosevelt, who tried to convince the public that Wall Street was to blame for the double-dip recession that plagued his second administration....

Also note this from the essay:

American students are all familiar with the "Red Scare" that followed World War I, and even more with the one led by Joseph McCarthy in the early years of the Cold War. But they almost never hear of the "Brown Scare" of the 1930s, when liberals painted political opponents as incipient fascists.

More at the above link, and much of the essay is spot on, IMO. We are presently seeing Obama demonizing big business -- and for the purpose of getting re-elected.

The American electorate are particularly vulnerable to that ploy, particularly during times of economic turmoil. Clearly, we hadn't seen this much economic turmoil in the United States since the days of FDR.

Obama would much rather pretend that he's a Ronald Reagan than take the risk of the electorate's discovery that he's closer to channeling FDR.

Jersey McJones said...

It's a difficult comparison, be it 1980 v 2012 or Reagan V Obama.

Inflation is not the issue it was in 1980, so right there you have a huge contrast. As well, Reagan actually inherited a much stronger economy than did Obama. As well, tax rates were very, very different in 1980. Post-recession unemployment has gone on longer and longer after ever recession since the 1970's. Then there's a the huge difference in trade, energy dependence, and on and on.

Volker, an architect of our modern economy should be blamed for our condition today, not lauded and looked to for further instruction.

Obama's biggest mistake was allowing the Bush tax cuts to remain in place. He and the Dems had the opportunity to undue that irresponsible policy and failed to do so.

So no, Obama is not all that different than Reagan - he's made some unfortunate but easy decisions that have in the end hurt him politically, and kept the country from recovering from yet another catastrophic consequence of conservative mismanagement and malfeasance.


Ducky's here said...

The cost of debt servicing means absolutely nothing, Silverfiddle?

Are you sure you don't want to reconsider.

Ducky's here said...

98ZJUSMC -- interesting Raygun factoid. His only decent acting performance was the one time he played a heavy.

He's the mob head in Don Siegel's excellent version of "The Killer's". Give it a look, skip the rest of his crap even though you're obviously an uncritical fan.

Anonymous said...

It's an excellent essay, AOW. Unfortunately, sensible people of modest means are caught in the threshing machine run by the fiends whose ambition is to gain and hold dictatorial power -- and the feckless fools who look to them for "salvation."


" ... Reagan actually inherited a much stronger economy than did Obama."

There you go again, Jersey!

You're kidding, right?

I was in my forties when Mr. Reagan first took office. Jimmy Carter left us with record high interest rates -- I was carrying a 13.75% mortgage at the time.

By the time Mr. Carter was evicted from the White House, the Dow was somewhere in the vicinity of 700 -- that's SEVEN-HUNDRED. The stock market was in a state of virtual paralysis.

Mr. Carter took office 35 years ago. How old were you at the time -- maybe seven?

I don't know where you get your information, Jersey, but if I were you, I'd start looking at other sources. From what you tell us, you must get informed by MADD Magazine -- or maybe The Daily Worker?

~ FreeThinke

Ducky's here said...

But they almost never hear of the "Brown Scare" of the 1930s, when liberals painted political opponents as incipient fascists.


Large potion of the nation was either pro-Germany or isolationist. Wasn't much of a strategy.

FDR had a tough time managing the sanctions that eventually got Japan to attack. It was about the only way he could get us into the war after he had decided we'd come out as the only economy standing.

Not an apt analogy.

Ducky's here said...

"assrack" --- It's a local phrase.

A human shell that doesn't have a freaking brain and is nothing more than a walking, unthinking rack for an asshole. Think about it and then blame the government because your paper screwed the pooch.

Z said...

YOu wrote "Free marketeers know that government cannot power the recovery."

I mistakenly read it "Free marketeers know that government cannot borrow the recover." I think that's appropriate, too, :-)
Economic success and freedom means not being in debt to the tune we are.
O's economic failure can be blamed on that, too, of course.

Anonymous said...

By the way SilverFiddle, I meant to say this right after I first read your post, but got asstracked instead. Sorry!

Anyway, how could Economics properly be called a "science," when it's nothing but assertions, conjecture and educated guesswork based on wishful thinking and statistics manipulated by agenda-driven intellectuals to support their pet theories?

My Mother's Recipe Card File is a more authentic example of Science than any cockamamie economic theory I've ever heard of. When you do exactly what my Mama tells you, your company dinners come out perfect every single time.

THAT'S Science.

Could even the great Ludwig von Mises and Friedrich Hayek or even the more whimsical Art Laffer make a similar claim?

Economics is in the same class with Astrology, Numerology and Phrenology and Zoroastrianism.

'Tis far more farce than force I fear.

~ FreeThinke

Anonymous said...

"Free marketeers know that government cannot borrow the recovery."

Good one, Z!

~ FT

Anonymous said...

Lol, no, Obama's no Reagan. He hasn't raised taxed 11 times but Reagan also advocated taxing the rich at a higher rate.

Leticia said...

It's almost unfair to compare the incompetence of the Obama administration with the Reagan administration.

Reagan was a man of high morals and truly cared for this nation and our military personnel and would never have place this great nation into the financial turmoil we have found ourselves in.

Z said...

thanks, FT. it did fit, didn't it.

Leticia, you're so comparison in all the important things.

Ducky's here said...

Leticia was he a man of great moral force when he swapped arms for hostages?

Iran/contra was your idea of moral rectitude?

Financing butchers of nuns and priests in Salvador made him a great man?

Financing a civil war in Guatemala that killed a quarter million at least made him a great man? A moral man?

Raising taxes on the middle class while giving a tax break to the unproductive "investor" class is your idea of a moral economy?

Yeah, I know, if we hadn't increased the defense budget and spent hundreds of millions on magic missile shield the Soviet Union would have never fallen. And by claiming we did the work you insult Solidarnosc, the Prague Spring, the samizdat writers and everyone going back to the Hungarian revolt. The one's who did the heavy lifting. You are vulgar.

Anonymous said...

"You are vulgar."

Well, look who's talking.

Oh the irony! The incredible irony! Whenever the pot calls the kettle "black," I have to stifle the urge to indulge in hysterical laughter.

Whatever quibbling and questionable bandying about of selected facts you want to indulge in the fact remains that under Carter everything turned to excrement, the misery index was at an all-time high, and our prestige abroad was shot.

All that changed radically under Mr. Reagan's watch. Happy Days were here again.

Then it all started to disintegrate under the mealy-mouthed, limp-wristed leadership of George Herbert Walker Bush. Disgusted Conservatives got sucked in by Ross Perot and didn't spot his hidden agenda till it was too late.

As a result we got Klintoon who quickly turned the presidency into a dirty joke and a lunatic farce, and the White House into a whorehouse, which made us the laughingstock of the world.

Then we got Dubya whose bumbling incompetence and crypto-Liberal policies took us from the frying pan into the fire.

What we have now is the end-product of a severe case of ptomaine poisoning that gurgles and seethes in America's rectum bursting through her anus with quasi-volcanic blasts of putrefaction and noxious vapor.

So Mr. Reagan does, indeed, appear like a Knight in Shining Armor in comparison to everything that has threatened to engulf, contaminate and destroy the country at both ends of his presidency.

Your assertions about Iran-Contra are patently absurd.

~ FreeThinke

Anonymous said...

And now it's MY turn to be vulgar

This just in from The Netwits:

Here's another way to look at the U.S. Debt Ceiling:

Let's say, you come home from work and find there has been a sewer backup in your neighborhood....and your home has sewage all the way up to the ceiling.

What do you think you should do …… Raise the ceiling, or pump out the shit?

Your chance to implement your choice is coming in November of 2012 .......

Submitted by FreeThinke

Always On Watch said...

sensible people of modest means are caught in the threshing machine run by the fiends...

Perfect analogy as to what this mess is. **sigh**

Ducky's here said...

So AOW, now that we realize there is broad agreement on Freethinker's premise, why isn't there an alliance?

The Tea Party wasn't interested in what the left had to say but OWS is open to anyone who agrees with Freethinker.

While OWS is criticized for not having a list of complaints that completely misses the goal. The nightly meetings are meant to allow everyone to have a voice. No, not efficient but it does allow people to have a voice. Experience a format that is a means to collect opinion.

But we'll still yap about his birth certificate or whether or not he's a socialist. And the "sensible" people are going to continue to spin their wheels in that crap.

Anonymous said...


I suppose that stands for

One World Socialism?

Outraged Wasps Seething?

Our World Shattering?

Out With Sarcasm?

If I ruled the world I would ban the use of acronyms and cryptic combinations of initials -- the lazy man's way of communicating with pretensions to erudition.

~ FreeThinke

Leticia said...

Ducky, no matter how I respond I am sure you would find fault with it. My statement stands fine on its own.

Anonymous said...

Don't bother trying to swede Leticia Ducky, she's one dimensional and gets all of her thoughts and facts from Fox News. She's a walking sound bite with no substance.

Silverfiddle said...

she's one dimensional and gets all of her thoughts and facts from Fox News

Speaking of sound bites with no substance...

Anonymous said...

I suspect Bd may have taken a new nom de plume, although people of Bd's ilk have reached epidemic proportions. Very sadly his name is Legion.

It's like a swarm of of wasps.

~ FreeThinke

Silverfiddle said...

Wasps have a sting. More like gnats...