I thought the high point - in terms of communication policy - of President Obama's press conference, just concluded, was his response to a jibe from CNN's Ed Henry about why Obama took a few days to express his outrage over the AIG bonuses. Obama's response: "It took us a couple of days because I like to know what I'm talking about before I speak."
Good for Obama - refreshing in a President and a politician.
Obama also showed an admirable sensitivity in his answer about adult vs embryonic stem cell research: he takes no pleasure in stirring up controversy. If and when science can provide through adult stem cells, what it currently can through embryonic, then Obama would be happy to go the adult stem cell route - as would everyone.
As for the economy, Obama stood his ground about not sacrificing health care, new energy sources, and other key steps to a better America, on behalf of keeping spending down.
And, although Obama didn't explicitly say this, I will: balancing the budget is not the most important goal of the Federal government. Instead, as FDR and John Maynard Keynes realized, and Nobel laureate Paul Krugman has been repeatedly urging, the goal should be to spend as much money as needed to reboot the economy. Once that happens - as Obama did say - then all the other financial problems, including the budget deficit, will be more easily resolved.
The United States of America, after all, is neither an individual nor a company. Not even a municipality. We have never gone bankrupt, nor will we - unless we allow the country to get browbeaten by pursuit of balanced budgets.
14 comments:
Actually, what Paul Krugman said about Obama's handling of the financial crisis was:
"What an awful mess."
http://krugman.blogs.nytimes.com/2009/03/21/despair-over-financial-policy/
Read a little more - what Krugman finds at fault with Obama is that he's not spending enough...
"what Krugman finds at fault with Obama is that he's not spending enough..."
That's what worries me about Krugman. How much does he think the dollar can handle before its value bottoms out? China has already threatened to dump the dollars they hold if we keep spending like there's no tomorrow.
They might be able to keep the system propped up in the short term, but what about the long term effects?
Our current economic system might not be saveable. We might have to start a whole new one from scratch.
It is refreshing to have a president who does not shy away from the complexity of long-range goals or equivocate when his detractors resort to reductionism. He is modeling the patience that he speaks of as he re-educates the American people to think differently about how we must now proceed in this new world.
Well said, Linda.
Scott, you're still not getting it - the only way our system can survive is if we spend enough to jumpstart the economy and get money flowing again. That's what Krugman is saying, and what was demonstrated by FDR.
In contrast, spending less, worrying about balancing the budget, will sentence us to huddle around a dwindling campfire with no hope of rekindling.
I found it funny that none of the pundits on TV, saw it, like you and I, saw it. That is, the way Obama described it: "I like to know what I am talking about".
Goes to show you -- there is a complete disconnect between the traditional journalists / TV pundits and the general public. Obama gets the pulse of the Nation. He understands where we're coming from. The pundits do not. They think they have it figured out. This is why President Obama is going around them and using non-traditional sources to communicate with the public.
He is still MUCH smarter than what people think. And I think, that's a good thing for our country.
I agree with Scott, aren't you people afraid of inflation devastating the value of the dollar? Maybe you will jump start the economy but if the dollar is at the bottom of all currencies it won't do much in international trade. What about the worst case scenario, the economy won't start and you're facing hyperinflation. Just pumping money everywhere you can is just not the best answer to this problem.
Take care, Jay
Vancouver Realtor: I agree, and we may very well see a short term betterment of the economy. I heard one commentator likened it to a sugar high and I think thats very applicable to this situation. I fear for our economy not because that the capitalist system is bad, but because the government is bad.
We are experiencing the Zimbabweification of our economy.
MP: absolutely.
Van, Deputy, hj: Again, you're ignoring the lessons of the Great Depression and Keynesian capitalism. Spending money is the best way of getting more money back in play... It's not a sugar high, but a long term fix.
Paul, if Keynesian economics actually worked, comic books would still be 20-30 cents an issue instead of $3-5, and gas would still be 30 cents a gallon. Inflation might be beneficial to the mega-corporations, but it kills the small business entrepreneur and the average joe struggling to just keep a roof over his head.
FDR forcing regulations on the Fed to get them to cease contracting the money supply did help end the Great Depression. But what we're facing isn't a depression, otherwise prices would be dropping. What we've got is the beginnings of hyperinflationary stagflation, similar to what struck the Weimar Republic.
The problem isn't that we don't have enough money in the system, the problem is we've got too much. Central economic planning almost always cuses bigger problems than the what they were designed to solve. Eventually, the bubble bursts, and the bigger it is when it does, the worse the effects are.
It should be very simple to understand. Inflating the money supply is the worst tax of all - it transfers wealth from the poor and the middle class to the politically well-connected. When you increase the amount of dollars in the system, you decrease the value of each dollar, causing a higher price of living for all citizens who hold dollars. The Federal Reserve is now on a printing spree, pumping out trillions and trillions of dollars in bailouts and guarantees. Just recently we monetized our own debt - yes, we borrowed from our self to pay off our self. If we let this recession run its course without interfering, yes it will be difficult for one or two years, but just like the depression of 1920, it will be over quickly. However, if the government continually intervenes, I fear Ron Paul is correct: the dollar will implode within four years, leading to at least a decade of turmoil. He's been right so far, but let's hope he's wrong about this.
Paul,
I have tended to enjoy this blogger's posts as well, and this one in particular seemed apropos to this discussion:
http://www.huffingtonpost.com/frank-schaeffer/calling-doctor-obama-how_b_179427.html
Scott and hj: you're still not getting what Keynesian economics is all about: Inflation doesn't matter. What counts in terms of recession and Depression is stimulating business, creating jobs, etc. Your concerns about inflation are totally unfounded - we've had inflation for decades, and the country was doing just fine economically. What caused the current crisis was stupidity of big companies like AIG, which were unregulated.
Excellent link, MP!
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