The Obama Economy

[jgaffney]

The PeeDee has an editorial this morning about how this is going to be a tough time for us:

One of the first economic forecasters to predict the collapse of the housing market and turmoil in the financial market says we'll hit bottom soon.

But, economist Chris Thornberg warns, we may be stuck there for a while.

"The recession is going to get worse before it gets better," he said Friday at a Sonoma County Economic Development Board breakfast in Santa Rosa. "But it's not that bad. It's not a Great Depression."

There's a reason that they call economics the "dismal science." Economists are very good at predicting gloom and doom, but are never held accountable when the opposite occurs because everyone is so happy that the doom-and-gloom forecast didn't come true.

But, wait! At the end of the op-ed is this little jewel;

Thornberg says John McCain was right -- the fundamentals of the economy are sound. But by that he means the United States still produces quality goods and services wanted around the world, and it has a strong labor pool, a good education system and innovative entrepreneurs.

Look for things to get better in 2010.

Remember all the mileage that the Left got out of ridiculing McCain after he made that statement? I guess now that Obama will be in charge of bringing us out of the recession, the fundamentals are not that bad after all. Do you ever get the impression that the Democrats will say anything to get elected?

[The Big Dog]

Look for things to get better in 2010... assuming that massive tax increases by both the state and federal governments don't push California straight off the cliff in the interim.

With what that picture is starting to look like, the economy of the state may very well collapse completely. Just in time for our next election of statewide officers where we will, almost certainly, elect another round of Democrats who will **** us mercilessly without so much as a kiss on our cheek to show for it.

Mark me... the taxpayers in California, maybe even some of the progressive ones, are going to wake up one day like a bimbo after a one night stand with some lounge lizard they racked up in a bar who steals their wallet while they are asleep.... sticky, broke, confused and all alone.

[The New Guy]

now that's funny.... and sad all at the same time.

[jgaffney]

You guys are missing the point. The reason I posted the original link was to point to the second pull quote. You have to believe that, if the PeeDee had that information 2 weeks before the election, they never would have published it! Doesn't fit the template!

But, now that Obama is elected, it's OK to let the real facts come out. That's called "Bait & Switch."

[bolverk]

Nov 17, 2008 14:26:26 GMT -5 jgaffney said:

Do you ever get the impression that the Democrats will say anything to get elected?

Yep.

[The Big Dog]

I'm not missing the point at all.

McCain was ridiculed by the left, and much of the "mainstream" press for his pronouncement that the fundementals were sound. Now we find out he was right, at the core of his argument and now the leftists are saying that in line with what McCain saw, things will get better next year. So to your point gaffney, it was a classic bait and switch. But we should expect that from politicians and the professionals who support them, shouldn't we? None of that should be any surprise at all.

My point is that if the state and federal governments are going to massively raise taxes into that situation now that all the negativity the Democrats ran on isn't really so bad after all in their eyes. And they are going to make it much, much worse.

[jgaffney]

Shifting gears slightly (I started this thread), one only has to look at the stock market numbers to see what we have in store for us. Although the Obama apologists want to blame the plunging stock market on "the failed economic policies of George W. Bush," those in the know see it otherwise. I heard Dick Morris describe it thusly:

Obama has continuously promised to double capital gains taxes, from the current 15% back to the 28% that they were under Reagan. Investors know that, if they wait to sell their stock holdings after the capital gains tax increase is signed into law, they will pay double the taxes on their investments. So, they are selling now.

If you look at the Dow Industrials closing numbers, they took a hit in May, dropping from 13,500 to 11,800 by mid-July. They stumbled along during the primaries, and even had an uptick before the conventions, hitting 11,700 in mid-August. But, then, when it was assured that Obama would be elected, the average began its plunge that we see today, dropping from 10,300 to 8,270.

Anyone with a retirement account in mutual funds has seen the effects of this plunge. Many people are afraid to open their 3rd quarter statement because they don't want to know how much wealth they have lost.

It's not just the subprime meltdown, which was precipitated by the push to write mortgages for people who shouldn't really get them. The economy should have recovered from that by now. Instead, we are seeing a fleeing of capital from the equities market (stocks) which is driving down the values of publicly held corporations, like GM and Ford.

To get a tax increase on top of that, which we surely will in 2010, when the Bush tax cuts are scheduled to expire, will be the knockout punch that sends the economy into a spin that will take quite a while to recover from. Remember the Carter years? I do.

[jgaffney]

So, Obama has come out and shown us that he really paid attention in his Economics class by announcing that he won't rush to increase taxes on the top 5% of taxpayers. That's a relief. Now, if he could just do something about that pledge to double capital gains taxes in the name of fairness.

In the meanwhile, Obama fiddles while the subprime mortgage meltdown is taking us off the cliff. Bloomberg reports that the total bailout package is reaching $7.7 trillion:

The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.

That's quite a price to pay for the initial goal of increasing lending in inner city areas! Talk about your unintended consequences! Clinton even admitted that it was a misguided effort (link needed).

But, here we are, in a sinking economy, and what is the new administration's position? Rahm Emanuel says, "We should never let a serious crisis go to waste!" Keep an eye on Emanuel - he's the real insider for the Democrat machine.