RSS Feed
Twitter
Facebook
Email
HomeWhich Way Is the Wind Blowing?
Posted by Larry Doyle on April 25th, 2009 1:24 PM |
Barack Obama strikes me as an individual who views popularity as necessary while principles are convenient. I see this in his engagement with the American public, the international audience, and political constituencies. While the strong liberal Democratic leadership is not only setting policy and writing legislation, Obama and team are working to appease a large percentage of the audience at home and abroad.
If one is trying to be all things to many people, ultimately an individual risks being measured as lacking depth. I believe that Obama runs a very high risk of being painted as a lightweight for this very reason. Let’s touch upon a few examples of Obama’s waffling while simultaneously working on growing his popularity:
1. Stimulus Package: rammed through Congress by Pelosi and Reid without a fair and full reading of the bill. We are now paying for the shortcomings in the bill. Obama “sold” this package via his Town Hall “concerts.”
2. On the “torture” front, Obama initially declared he was moving forward without reviewing and potentially prosecuting Bush officials. In the face of massive pressure from a hard core liberal element of the Democratic Party, Obama quickly reversed course and indicated he may pursue investigations and prosecutions of Bush officials. Getting pushed around by “friends” does not exactly send a message of character and strength to the world.
3. Budget: Obama will run over a number of Blue Dog Democrats specifically on the health care front via a process known as reconciliation which disallows filibustering. The use of the reconciliation process has never been used for major legislation. The overall budget is a MASSIVE spending proposition which dramatically escalates the federal deficit.
4. Budget Deficit: under pressure from the same Blue Dog Democrats and after putting forth the largest budget ever, Obama is now recommending a “pay as you go” bill which would instill higher taxes or spending cuts after this budget.
Why do we need to wait? Why shouldn’t we impose this “pay as you go” before the budget? Very simply, Obama would not be able to hold to his promise of not raising taxes on the middle class.
Bloomberg provides insight on the pay-as-you-go approach, Obama Urges Congress to Pass Law Enforcing Fiscal Discipline.
The timing of Obama’s newly found fiscal discipline is very interesting. Why? Earlier this week, Obama came out with a “bold” approach to imposing real discipline within his cabinet. Bloomberg shed light on Obama’s boldness,
Obama was criticized as doing too little to confront the deficit when he ordered his Cabinet to cut $100 million out of the budget in the next 90 days, which would cut this year’s projected deficit by about 0.006 percent.
Yep, this newfound discipline is starting with an aggressive move of cutting 6 thousandths of 1 per cent from this year’s budget. Such a “draconian” (NOT) level of cuts hints at how large Obama’s budget is while seriously questioning his integrity and that of the Democratic leadership on this topic.
A President who has an agenda a mile long but six inches deep risks being exposed when the wind kicks up. Speaking of wind and Obama, which way is it blowing today?
LD
Missed Opportunity
Posted by Larry Doyle on April 21st, 2009 7:52 PM |
Yesterday I asked, Is The Stimulus “Stimulating?” Today, Bloomberg reports how Caterpillar Says U.S. Stimulus ‘Missed Opportunity‘. Specifically, the bulldozer manufacturer described the Stimulus Package as “disappointing and less effective than measures approved by China.”
“The infrastructure portion of the stimulus package was disappointing in that it was less aggressive than other countries and missed an opportunity to correct past underinvestment in U.S. infrastructure.”
In my piece, I highlighted how the Stimulus Package was more a promotion of the Democratic agenda rushed through Congress without a full and proper review. Without targeted spending on immediate areas of need and benefit, our economy suffers while our deficit worsens. While the Democratic leadership railroaded the Stimulus legislation through Congress, which country did enact targeted fiscal stimulus? China.
The Chinese economy is benefitting from their stimulus while many workers in our country suffer. While President Obama visited Caterpillar in February to push the Stimulus Package, I do not get the sense that he would be invited back now. Caterpillar’s CFO said:
“We think China has it right,” Chief Financial Officer Dave Burritt said in an interview. “The majority of their package is on infrastructure spending. We are seeing life there. We are seeing the turnaround. We would like to see a more robust infrastructure package in the United States.”
I would qualify that statement as a courteous indictment of the political process in our country. Caterpillar is not the only company benefitting from the Chinese stimulus. Additionally,
United Technologies Corp., Eaton Corp., and Dupont Co. are among other U.S. industrial companies that said they have seen results from China’s plan. This week all three reported first- quarter sales declines ranging from 12 percent to 20 percent.
United Technologies’ fire and security division “is seeing some benefits from the stimulus already in terms of the dollars which are flowing through to infrastructure,” Akhil Johri, the head of investor relations, said today. The Hartford, Connecticut-based company is the maker of Otis elevators, Carrier air-conditioners and Pratt & Whitney engines.
At Wilmington, Delaware-based DuPont, the third-biggest U.S. chemical maker, “electronics customers are reporting some benefit from the China stimulus package,” CEO Ellen Kullman told analysts on a call today.
Eaton CEO Sandy Cutler, on a conference call yesterday, described China as “the first market where we can really string things through to government stimulus activity.”
Caterpillar predicted the U.S. recession in October 2007, two months before it officially began, and said today it expects the world economy to decline about 1.3 percent this year.
Missed opportunities do not necessarily always present themselves again.
LD
Is the Stimulus “Stimulating?”
Posted by Larry Doyle on April 20th, 2009 5:30 AM |
As I referenced on my radio show last evening (note: you can listen to an audio recording of the show from the BlogTalkRadio player in the right sidebar), China’s economy is benefitting from economic stimulus enacted by its government. Well, the U.S. government also enacted a major Stimulus Package in early February. How is our package doing? Is it impacting the economy? Our economy certainly does not seem to be benefitting significantly from any government stimulus.
I wrote on February 7th that Martin Feldstein, renowned Harvard economist who sits on Obama’s Economic Recovery Advisory Board, called the Stimulus Package An $800 Billion Mistake.
Feldstein’s concerns about the Stimulus as reported by the Washington Post, focused on several items:
1. On the spending side, the stimulus package is full of well-intended items that, unfortunately, are not likely to do much for employment.
2. The largest proposed outlays amount to just writing unrestricted checks to state governments.
3. The plan to finance health insurance premiums for the unemployed would actually increase unemployment by giving employers an incentive to lay off workers rather than pay health premiums during a time of weak demand.
4. A large fraction of the stimulus proposal is devoted to infrastructure projects that will spend out very slowly, not with the speed needed to help the economy in 2009 and 2010.
5. The problem with the current stimulus plan is not that it is too big but that it delivers too little extra employment and income for such a large fiscal deficit.
Let’s see how business executives view the rollout of the Stimulus Package. Would they agree or disagree with Feldstein’s concerns? (more…)
