In continuation of Friday’s article, we were discussing whether or not the Obama administration could continue to call this recession the “Bush” recession. The answer is no and the Obama administration has to face the fact that the statute of limitations for blaming Bush has run out and he now owns the economy; especially since his administration has already used all of their “Ivy League” experimental theories to correct it. As much as they would like to enter the 2010 campaign cycle with as much emphasis as possible on the “mess” that Obama inherited, there are several of those pesky little facts out there that all of Obama’s rhetoric will not change. As it turns out, Obama didn’t just inherit the recession, he hired it.
#1- President Obama has retained people within his administration that were previously key policy makers whose actions contributed to the current recession.
#2- Much of the small business community has sited major parts of Obama’s agenda that have shaken the confidence of business in the health of the economy under Obama’s leadership and in their ability to remain profitable should those agenda items become law.
#3- The actions taken by this administration to correct the faltering economy were, and continue to be, centered on government control, government spending, and the monetization of debt complicated by the dangerous misreporting of economic indicators.
We already discussed Tim “Turbo-Tax” Geithner, Obama’s current Treasury Director; specifically how his actions while he was Chairman of the New York Federal Reserve and a member of the Washington “Group of Thirty” have been considered by many economists as directly impacting the economy in ways that have severely damaged the banking industry. We also discussed that Rahm Emmanuel, Obama’s current Chief of Staff was on the board of Freddie Mac during the period that Freddie Mac was plagued with scandals involving campaign contributions and accounting irregularities. Obama torpedoed a Freedom of Information Act request to obtain communication and e-mail records that might have helped an investigation implicate his dear friend and Chief of Staff.
Let’s talk about some new people. Barack Obama’s choice for Director of the Office of Budget and Management (OMB) is Peter “Loverboy” Orszag. If you recall, the OMB gave the Senate Healthcare Bill a failing grade on maintaining the “budget neutrality” that the President required of any bill he would sign. Of course a quick closed door meeting between Obama and his Budget Director fixed that and within days, the OMB reevaluated the plan and Viola! It was budget neutral! Thank God for Orszag! It is critically important to economic recovery that the business community can trust the estimates of government. After all, to be able to expand and chance the hire of new employees, business must be able to accurately estimate little things like future tax liabilities and the burden that new regulations will have on the cost of manufacture, labor and energy. Can you imagine if people began to mistrust the government; especially in the area of official reports and estimates? The ramifications would be astounding. Why you could dump hundreds of billions into the economy and never create a single job!
Orszag is another one of those intellectual theorists that has never held a real job. While he was not a “Rhodes” Scholar like Bill Clinton, he was a Marshal Scholar and after earning a degree in economics from Princeton, Orszag traveled to England where he obtained his Masters Degree and Doctorate in economics from the London School of Economics. He sites several people that he considers “Mentors” including Joseph Stiglitz. Stiglitz was not your average apple pie and baseball American and was himself, a proponent of globalist economic policy, market socialism and what he called a “more sustainable and just global economic order”. In addition to Stiglitz, Orszag also considered Robert Rubin an important influence in his life.
Yes, that is the same Rubin that spent 26 years at Goldman Sachs as a board member and Co-Chairman before joining the Clinton administration as Assistant to the President for Economic Policy. After leaving the Clinton administration, Rubin became Director and Senior Counselor of Citigroup and would eventually serve as interim Chairman between November and December 2007. In January of 2009, Citigroup announced his resignation after having been criticized for his performance. Rubin became one more name on the list of individuals that had brought the financial system to ruin before leaving with more than $100 million dollars in cash and stocks.
The current Director of the White House's National Economic Council for President Barack Obama is Lawrence Summers. “Larry” began his academic career at MIT where he studied physics but soon switched to economics, earning an B.S. in 1975. He attended graduate classes at Harvard where he earned his Ph.D. in 1982. At age 28, Summers became one of the youngest tenured professors in Harvard’s history. Like Orszag, Summers is a theoretician when it comes to work and has spent his life either teaching, in government or governmental organizations like the dreaded World Bank. While all of that sounds impressive, I still don’t know how we let people teach what they have never been involved in….like where business actually fits into a market economy. Summers early career was as an “academic economist” and he was responsible for providing research data for economic studies.
As a researcher, Summers has made important contributions in many areas of economics, primarily public finance, labor economics, financial economics, and macroeconomics. Some of Summers' early papers concluded that corporate and capital gains taxes are an inefficient form of taxation. Cutting the capital gains tax rate, Summers found, could help the economy grow. One of Summers' prominent findings in labor economics is that unemployment insurance and welfare payments are a major contributor to unemployment, and therefore should be scaled back. Since the Obama administration has taken a course contrary to these proven economic strategies, it is apparent that Larry’s career in politics and as a professor at Harvard, has caused him to trade his lust for truth for the comfort of being part of the ruling elite.
Of course there is a down side to losing your “religion” and Summers would find out that when you ignore what you know is right and true because it is unfashionable, bad things are bound to happen. As Treasury Secretary, Summers led the Clinton Administration's opposition to tax cuts proposed by the Republican Congress in 1999; a 180 degree reversal from the data he provided for other economists earlier in his career. Summers supported the Gramm-Leach-Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services (by repealing key provisions in the 1933 Glass-Steagall Act). After passage, Summers announced: "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," "This historic legislation will better enable American companies to compete in the new economy. Unfortunately for Summers, the deregulation under the Glass-Steagall Act is widely known to have created the conditions that directly led to the sub-prime mortgage crisis; the precursor to the financial meltdown of 2008.
Summers also testified before Congress that there was no need to require additional regulation of the institutional OTC derivatives market, a move that would later lead to the near collapse of AIG. The work that Summers did for the Clinton administration in fact, created the conditions that would nearly drive the nation into depression a mere ten years later. Upon leaving the Clinton administration, Summers became the President of Harvard University. He decided to invest University funds using the loopholes he created through deregulation. Of course interest swaps and hedge funds can’t be maintained forever and his financial wheeling and dealing would end up costing the University over $1 billion dollars and cost him his job, forcing his resignation in 2006.
Now the Obama administration is shaping the financial direction of the nation under the advice of the actual architects of the financial meltdown that nearly bankrupted the entire financial system of the United States if not the world. One could argue that the Bush administration should have taken reasonable steps to restore the needed regulations which could have prevented the crisis and he probably would have if his administration hadn’t received the assurances of the Federal Reserve and Congress that everything was fine.
So in summary, the Obama administration is blaming the Bush administration for a recession that was brought on by financial deregulation enacted by the Clinton administration under the advice of people that Obama just rehired to direct the financial direction of the country under his administration. The question that remains unanswered is why Obama thinks that any of this is a good idea.
Paul
#1- President Obama has retained people within his administration that were previously key policy makers whose actions contributed to the current recession.
#2- Much of the small business community has sited major parts of Obama’s agenda that have shaken the confidence of business in the health of the economy under Obama’s leadership and in their ability to remain profitable should those agenda items become law.
#3- The actions taken by this administration to correct the faltering economy were, and continue to be, centered on government control, government spending, and the monetization of debt complicated by the dangerous misreporting of economic indicators.
We already discussed Tim “Turbo-Tax” Geithner, Obama’s current Treasury Director; specifically how his actions while he was Chairman of the New York Federal Reserve and a member of the Washington “Group of Thirty” have been considered by many economists as directly impacting the economy in ways that have severely damaged the banking industry. We also discussed that Rahm Emmanuel, Obama’s current Chief of Staff was on the board of Freddie Mac during the period that Freddie Mac was plagued with scandals involving campaign contributions and accounting irregularities. Obama torpedoed a Freedom of Information Act request to obtain communication and e-mail records that might have helped an investigation implicate his dear friend and Chief of Staff.
Let’s talk about some new people. Barack Obama’s choice for Director of the Office of Budget and Management (OMB) is Peter “Loverboy” Orszag. If you recall, the OMB gave the Senate Healthcare Bill a failing grade on maintaining the “budget neutrality” that the President required of any bill he would sign. Of course a quick closed door meeting between Obama and his Budget Director fixed that and within days, the OMB reevaluated the plan and Viola! It was budget neutral! Thank God for Orszag! It is critically important to economic recovery that the business community can trust the estimates of government. After all, to be able to expand and chance the hire of new employees, business must be able to accurately estimate little things like future tax liabilities and the burden that new regulations will have on the cost of manufacture, labor and energy. Can you imagine if people began to mistrust the government; especially in the area of official reports and estimates? The ramifications would be astounding. Why you could dump hundreds of billions into the economy and never create a single job!
Orszag is another one of those intellectual theorists that has never held a real job. While he was not a “Rhodes” Scholar like Bill Clinton, he was a Marshal Scholar and after earning a degree in economics from Princeton, Orszag traveled to England where he obtained his Masters Degree and Doctorate in economics from the London School of Economics. He sites several people that he considers “Mentors” including Joseph Stiglitz. Stiglitz was not your average apple pie and baseball American and was himself, a proponent of globalist economic policy, market socialism and what he called a “more sustainable and just global economic order”. In addition to Stiglitz, Orszag also considered Robert Rubin an important influence in his life.
Yes, that is the same Rubin that spent 26 years at Goldman Sachs as a board member and Co-Chairman before joining the Clinton administration as Assistant to the President for Economic Policy. After leaving the Clinton administration, Rubin became Director and Senior Counselor of Citigroup and would eventually serve as interim Chairman between November and December 2007. In January of 2009, Citigroup announced his resignation after having been criticized for his performance. Rubin became one more name on the list of individuals that had brought the financial system to ruin before leaving with more than $100 million dollars in cash and stocks.
The current Director of the White House's National Economic Council for President Barack Obama is Lawrence Summers. “Larry” began his academic career at MIT where he studied physics but soon switched to economics, earning an B.S. in 1975. He attended graduate classes at Harvard where he earned his Ph.D. in 1982. At age 28, Summers became one of the youngest tenured professors in Harvard’s history. Like Orszag, Summers is a theoretician when it comes to work and has spent his life either teaching, in government or governmental organizations like the dreaded World Bank. While all of that sounds impressive, I still don’t know how we let people teach what they have never been involved in….like where business actually fits into a market economy. Summers early career was as an “academic economist” and he was responsible for providing research data for economic studies.
As a researcher, Summers has made important contributions in many areas of economics, primarily public finance, labor economics, financial economics, and macroeconomics. Some of Summers' early papers concluded that corporate and capital gains taxes are an inefficient form of taxation. Cutting the capital gains tax rate, Summers found, could help the economy grow. One of Summers' prominent findings in labor economics is that unemployment insurance and welfare payments are a major contributor to unemployment, and therefore should be scaled back. Since the Obama administration has taken a course contrary to these proven economic strategies, it is apparent that Larry’s career in politics and as a professor at Harvard, has caused him to trade his lust for truth for the comfort of being part of the ruling elite.
Of course there is a down side to losing your “religion” and Summers would find out that when you ignore what you know is right and true because it is unfashionable, bad things are bound to happen. As Treasury Secretary, Summers led the Clinton Administration's opposition to tax cuts proposed by the Republican Congress in 1999; a 180 degree reversal from the data he provided for other economists earlier in his career. Summers supported the Gramm-Leach-Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services (by repealing key provisions in the 1933 Glass-Steagall Act). After passage, Summers announced: "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," "This historic legislation will better enable American companies to compete in the new economy. Unfortunately for Summers, the deregulation under the Glass-Steagall Act is widely known to have created the conditions that directly led to the sub-prime mortgage crisis; the precursor to the financial meltdown of 2008.
Summers also testified before Congress that there was no need to require additional regulation of the institutional OTC derivatives market, a move that would later lead to the near collapse of AIG. The work that Summers did for the Clinton administration in fact, created the conditions that would nearly drive the nation into depression a mere ten years later. Upon leaving the Clinton administration, Summers became the President of Harvard University. He decided to invest University funds using the loopholes he created through deregulation. Of course interest swaps and hedge funds can’t be maintained forever and his financial wheeling and dealing would end up costing the University over $1 billion dollars and cost him his job, forcing his resignation in 2006.
Now the Obama administration is shaping the financial direction of the nation under the advice of the actual architects of the financial meltdown that nearly bankrupted the entire financial system of the United States if not the world. One could argue that the Bush administration should have taken reasonable steps to restore the needed regulations which could have prevented the crisis and he probably would have if his administration hadn’t received the assurances of the Federal Reserve and Congress that everything was fine.
So in summary, the Obama administration is blaming the Bush administration for a recession that was brought on by financial deregulation enacted by the Clinton administration under the advice of people that Obama just rehired to direct the financial direction of the country under his administration. The question that remains unanswered is why Obama thinks that any of this is a good idea.
Paul
As for demographic, trade and other economic or social science statistics and indicators etc.: I have posted a Statistical Reference Inventory (http://crisismaven.wordpress.com/references/) to my economics blog with economic and statistical data series, history, bibliographies etc. for students & researchers, probably the most comprehensive on the Internet. Currently over 400 meta sources, it will soon grow to over a thousand. Check it out and if you miss something, feel free to leave a comment.
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