Hey, Barry, let's get a few of your obvious misconceptions corrected. to begin with, South Asians did not vote for you. American workers did. American workers who increasingly seek unemployment assistance since the highly-vaunted private sector continues to not create employment over fears that consumers won't spend. This is a realistic fear, as consumer borrowing fell in June for a fifth straight month. American workers are hurting, with as many as 1.6 MILLION expected to file bankruptcy this year despite the very hostile Bush-driven Bankruptcy Abuse Prevention Act of 2005 which makes it so much harder to file. A record 40.8 million Americans are living on Food Stamps (while at the same time Congress is cutting funding for same), and you send jobs to South Asia and Armenia using American working-class tax dollars to do so. (Or is this just a way of raising taxes on foreigners to pay for the increased border patrols the homeland conservatives demand but won't fund?)
WHAT THE HELL ARE YOU THINKING? How long do you think Americans are going to put up with this hypocrisy on your part? Do your advisors really think that lip service is going to prevent serious losses to the Republicans this November due to your sorry economic performance and your employment betrayals?
You tell the AFL-CIO that you would want a union to represent you, yet you knife unions in the back. Do you really think these same folks are going to give you their money, their energy, and their time, and their votes after suffering such an injury? Get real! Paul Krugman was awarded a Nobel Prize for Economics, and he clearly takes the position that "when America had a strong middle class, it also had a strong union movement." A strong middle class is considered vital to economic growth, and the lack of such is seen by many economists as the reason why the economy refuses to reverse direction.
For some reason, spitting in your supporters' faces seems to be something you do. I'm amazed that the Nobel Peace Prize you were awarded wasn't recalled once you gave your "acceptance" speech justifying making war. But having a Nobel Prize yourself should mean that you understand what it represents, that you are considered very knowledgeable and active in support of the cause for which it was given. You should be listening to those who have them as well.
One such is Edmund S. Phelps, who was the 2006 Nobel Laureate in Economics. I don't agree with everything he proposes, but I find his suggestions a good place to begin the work you have put off since you were elected in November of 2008.
Article comments
1 - Dave Nalle
Of course, the real problem here is the gross inefficiency of the administration's approach to stimulus. Spending money to stimulate the economy is an indirect approach which wastes more money than it puts to good use. By taking this approach you have to spend literally 10 times as much or more than you would if you implemented your stimulus through substantial tax cuts, especially ones directed at the middle and working class.
The reason Romer's demands were unacceptable is that they were based on this false assumption that government spending is a sensible way to stimulate the economy. What her situation revealed is that the law of diminishing returns makes that kind of stimulus more and more inefficient the more you spend.
They need to rethink the whole approach they are taking, but as you point out, with Summers behind the wheel and ideologues at the helm they are never going to get outside of their big government box.
Dave
2 - jeannie danna
Tax cuts for the middle class will not matter here, since it's not our economy that they want to stimulate.
using foreign aid money to specifically help private corporations "take advantage of low labor costs" in the developing world - that's absolutely grotesque.
so, why only blame Obama?
: ) Hi Realist! Long time no see.
3 - handyguy
Dave, your ideological view of economic stimulus is not shared by a lot of economists. Some, but certainly not universally.
4 - Ruvy
So, Realist is finally waking up! Man, it took a long time!
5 - handyguy
This article is massively over the top [as usual]. Just one example: Obama has been "BP's lackey"??!! Ludicrous.
The size of the Feb 2009 stimulus bill was determined largely by the political ability to push it through Congress. It was derided by the right as huge and wasteful, and by the left [i.e. Krugman] as a good start but not big enough given the size of the hole.
[By the way, about a third of it consisted of tax cuts aimed at middle class families and small businesses. Over $250 billion!]
The recent Alan Blinder/Mark Zandi evaluation of the success of TARP and the 2009 stimulus was pretty convincing: Those actions prevented a 10% unemployment rate from becoming a 15% or 20% one, and kept a scary Wall St economic meltdown from spiraling all the way down the drain.
Don't you think that if there were a "magic bullet" solution to unemployment, the president would go for it? He's hardly unaware of that 9.5% jobless rate's effect on his poll numbers.
Companies are sitting on cash reserves and not hiring. That's the key to the eventual solution.
But even recent small-bore attempts to get small-business tax breaks and a small-business loan fund through Congress have been made hostage to election-year partisan hostilities.
Mr. Obama ain't perfect. But this piling on from left and right accomplishes nothing.
6 - John Wilson
Phelps article is bad economics. I suspect it reflects his political views.
All these ideas to help businesses are misdirected: the USA is WAAYYY over capacity already. We have a capacity glut. No amount of money given to suppliers and builders will cure our unemployment problem for the simple reason that there is no market for products.
It's the endpoint of 'supply side' economics, which should only be used as a monor correction to demand-side econ, which is what powers our economy. Suppliers are camp-followers: they go where there is business, but markets are set by consumers.
It is useless to pump more resource into the producer side. Unless, of course, you wish to subsidize export of US business to foreign lands to save them, which will be done at the expense of US citizens and workers.
It is worse than useless, it is a negative because it takes money and attention away from where it is really needed: at the low end of the earning scale where big consumerism thrives.
7 - handyguy
I didn't read Phelps's piece that way, John. He says there is insufficient venture capital because there is insufficient innovation, and vice versa. A vicious cycle.
He also says companies are thinking short-term when they should focus on the long haul. And for public companies, the stock price is the reason for the short term-itis.
He suggests tax breaks especially aimed at lower-paying jobs. That doesn't sound right wing or supply side to me.
8 - jeannie danna
President Obama is not perfect, but he is a hell of a lot better than the last guy!
9 - jeannie danna
John,
It is useless to pump more resource into the producer side. Unless, of course, you wish to subsidize export of US business to foreign lands to save them, which will be done at the expense of US citizens and workers.
Hasn't that already been done?
10 - Chlotilde
Of course there's a market for products. We could be selling all those consumer goods which were selling 5 years ago and are not selling now.
11 - Ludwik Kowalski
You wrote: "But as the Stalinist nations collapsed, and Glasnost and Perestroika replaced 'global revolution' and 'the dictatorship of the proletariat', there was no longer any opponent to use to motivate the capitalist working class to strive for efficiency and greater productivity...."
Glasnost and Perestroika also did not happen without reason. They demonstrated the faulty nature of Marx's idea proletarian dictatorship.
Ludwik Kowalski, the author of two books:
1) "Hell on Earth: Brutality and violence under the Stalinist regime"
2) Another short book, also free for on-line readers, is “Diary of a Former Communist: Thoughts, Feelings, Reality.”
12 - handyguy
Excellent and entertaining conversation from an unexpected source:
Former Treasury Secretaries Paul O'Neill and Robert Rubin on Fareed Zakaria's show today on CNN. O'Neill is often hilarious, and both men have a lot of common sense wisdom on the current economic situation. Good stuff [even those who enjoy sliming Rubin may find themselves impressed].
[I just watched it live on cable; the clip may not be posted on the web yet.]