TW: In contrast to the Hooverite, head in the sand (or wherever) Republicans, Obama is making bold moves. I said back in 2007 Obama had a chance to be a home run hitting POTUS. The Clintonian singles and sacrifice bunts were nice in the 90's but given where things stand today- we NEED a slugger. For too long the can has been kicked down the road on many aspects of domestic policy: fiscal/entitlements, education, infrastructure, environment. Foreign policy got totally sideways with W. Bush and the world is evolving...quickly, with or without competent American leadership. Western democracies are for the first time in a millennia losing relative power (think about that one). A myopic nationalist approach would only hasten the decline.
Obama is not our only hope but he is the best hope, bitch (whine) if u must but really who would you prefer in the office at this point?
From Jon Alter at Newsweek:
"Mid-tweet in last week's press conference, reporters were already complaining that President Obama wasn't making news. And by the old standards, they were right. Obama didn't drop any bombshells, or rein in his agenda, as so many have been urging, or tee up a YouTube-ready sound bite. The same gasbags who had blasted him for demeaning the presidency by cracking jokes on "The Tonight Show" and drinking a beer at a basketball game (hadn't some favored George W. Bush over Al Gore in 2000 precisely because he was better "to have a beer with"?) now claim Obama's boring. On Sunday he had to defend himself on "60 Minutes" from the charge that he was "punch drunk" with mirth; by Wednesday, he was derided as too serious and professorial.
...In doing so, I'd venture that he was making news in a larger sense. He was signaling that he actually trusts people to stick with him through a complex, long-term argument. This is a radical idea and a helluva bet for an American president.
...He looks steady and competent and accomplished. While it was sold poorly, the recovery bill he signed was actually four or five major pieces of legislation in one, and adds up to more public investment than at any time in nearly half a century. It was also the largest tax cut in American history.
...Obama is tripling down, wagering not just that his recovery plan will work but that he can simultaneously dent three huge problems (not fix, dent) that keep getting worse. He's telling the people exactly what to expect from him for the duration of his presidency. He's insisting that repairing the nation's "foundation" begins right now, in this year's budget. And he's set himself up for failure if he doesn't bring big changes in our new policy trinity of Health, Energy and Education
Washington isn't bored by Obama; it's dazed and confused by him. I was on Capitol Hill in early March on the day the president's proposed budget came out. It was as though an IED had hit the place. Congressional aides asked each other in amazement...Can you believe it? The guy is trying to do what he said he would!...Last week a Democratic senator told me with a mixture of awe and worry that "every time I think he's gonna step on the brake, he hits the gas."
The critique comes in many metaphors. He's overloading the circuits. Putting too much freight on the truck. Biting off more than he can chew. That might be right. It's much easier to stop an idea in Congress than to get it through. ..."They're accustomed to incrementalism in this town," says David Axelrod. "Their answer is to muddle through—take the path of least resistance. Their lesson is, 'We're in a tough spot, so let's do less..."
http://www.newsweek.com/id/191407
Showing posts with label Obamanomics. Show all posts
Showing posts with label Obamanomics. Show all posts
Thursday, April 2, 2009
Tuesday, March 24, 2009
Stimulus As an Investment
TW: One of the areas where Obama is focusing investment dollars is upgrading our electricity grid. Our electricity grid is old and inefficient, I believe something like 75% of electricity is lost during transmission. Given the conflicting incentives, risk and high capital costs associated with grid upgrades it seems an opportunity for the federal government to step in to push the ball forward.
The Republicans can bloviate on waste and deficits etc. This is not one of those things that will garner much publicity but it is a big opportunity and one that Obama should be applauded for grasping.
From Economist:
"...Obama’s stimulus package contains about $4.5 billion in grants for smart-grid investments and regional demonstrations...Obama declared that a smart grid could “save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation”—grand goals indeed.
America’s power system has changed remarkably little over the past century, with centralised utilities delivering electricity to passive consumers. A smart grid would use digital technology to collect, communicate and react to data, making the system more efficient and reliable. For example, sensors would help utilities locate problems and fix them quickly—power cuts now cost businesses more than $100 billion each year. A nimble grid would integrate electricity from both predictable sources, such as coal, and fickle ones, such as the sun and wind.
Meters, to monitor both use and prices, would give consumers more control over their electricity bill. Advocates predict that some consumption would move to cheaper, off-peak hours, easing congestion and reducing the need for new infrastructure. Consumers would save money and emissions would fall. Installing smart meters in 25% of American homes, GE estimates, would be equivalent to removing 1.7m cars from the roads. Plug-in hybrids, meanwhile, could charge at night, when demand is low, and even pump power back to the grid while parked during the day.
...Advocates have many tasks, not least of which is convincing consumers that a smart grid will lower their costs, not raise them. Changing regulations, meanwhile, is even thornier. For utilities, reducing consumption means reducing revenues, hardly an appealing prospect. The stimulus encourages rewarding utilities for efficiency, but it is local commissions that must change the rules, and they may be wary of what is still seen as a risky investment..."
http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=13337902
The Republicans can bloviate on waste and deficits etc. This is not one of those things that will garner much publicity but it is a big opportunity and one that Obama should be applauded for grasping.
From Economist:
"...Obama’s stimulus package contains about $4.5 billion in grants for smart-grid investments and regional demonstrations...Obama declared that a smart grid could “save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation”—grand goals indeed.
America’s power system has changed remarkably little over the past century, with centralised utilities delivering electricity to passive consumers. A smart grid would use digital technology to collect, communicate and react to data, making the system more efficient and reliable. For example, sensors would help utilities locate problems and fix them quickly—power cuts now cost businesses more than $100 billion each year. A nimble grid would integrate electricity from both predictable sources, such as coal, and fickle ones, such as the sun and wind.
Meters, to monitor both use and prices, would give consumers more control over their electricity bill. Advocates predict that some consumption would move to cheaper, off-peak hours, easing congestion and reducing the need for new infrastructure. Consumers would save money and emissions would fall. Installing smart meters in 25% of American homes, GE estimates, would be equivalent to removing 1.7m cars from the roads. Plug-in hybrids, meanwhile, could charge at night, when demand is low, and even pump power back to the grid while parked during the day.
...Advocates have many tasks, not least of which is convincing consumers that a smart grid will lower their costs, not raise them. Changing regulations, meanwhile, is even thornier. For utilities, reducing consumption means reducing revenues, hardly an appealing prospect. The stimulus encourages rewarding utilities for efficiency, but it is local commissions that must change the rules, and they may be wary of what is still seen as a risky investment..."
http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=13337902
Monday, March 23, 2009
Obamanomics: He Needs To Step Up On Free Trade
TW: The left-wing is soft on free-trade. Obama must fight them. Congress has now inserted several amendments into recent legislation which are protectionist. Protectionism in a normal environment is troubling, in the current environment where international cooperation is crucial if an even worse economic crisis is to be averted, it is absolutely toxic. Obama pandered on the issue during the primaries then tacked back to the center subsequently. Lets hope he more than tacks in coming weeks.
From Economist:
"...a provision inserted into the Omnibus Appropriations Bill signed into law by Mr Obama has scrapped a pilot programme that allowed a small number of Mexican trucking companies to carry cargoes north of the border—as NAFTA requires.
Mexico’s response was swift. On March 18th it imposed tariffs of up to 45% on 90 American agricultural and industrial imports, ranging from strawberries and wine to cordless telephones. The list was carefully chosen to avoid pushing up prices of staples in Mexico while hitting goods that are important exports for a range of American states. That way, it could have maximum political effect north of the border.
Since NAFTA was signed in 1992, trade between Mexico and the United States has boomed. But the issue of road transport has turned into a political battle. Around two-thirds of cross-border trade goes by road. Transport companies from each country were supposed to be able to operate freely in the others by 2000. The Teamsters union, whose members include American truck drivers, has fought a long and largely successful rearguard action against this provision. It argues that Mexican trucks are unsafe and polluting and their drivers insufficiently trained.
An American court rejected these arguments. So did a NAFTA dispute-settlement panel, which ruled in 2001 that the United States was violating the agreement and gave Mexico the right to impose retaliatory tariffs. Mexico chose not to do so, to give the United States a chance to honour its commitment. The Bush administration tried, but was thwarted when Congress approved a measure setting 22 new safety standards for Mexican trucks.
...The Teamsters’ safety argument looks spurious. Mexican transport firms have invested in new trucks and trained their drivers to meet the safety requirements under the pilot scheme. A study commissioned by America’s Department of Transportation, which tracked Mexican trucks operating north of the border in the first year of the programme, found that these trucks clocked up far fewer safety violations than their American counterparts.
The Teamsters’ victory means that most Mexican goods going north will continue to have to be unloaded at the border, reloaded for the short hop across it, then loaded again onto an American truck...No such restrictions apply to Canadian lorries..."
http://www.economist.com/world/americas/displaystory.cfm?story_id=13331117
From Economist:
"...a provision inserted into the Omnibus Appropriations Bill signed into law by Mr Obama has scrapped a pilot programme that allowed a small number of Mexican trucking companies to carry cargoes north of the border—as NAFTA requires.
Mexico’s response was swift. On March 18th it imposed tariffs of up to 45% on 90 American agricultural and industrial imports, ranging from strawberries and wine to cordless telephones. The list was carefully chosen to avoid pushing up prices of staples in Mexico while hitting goods that are important exports for a range of American states. That way, it could have maximum political effect north of the border.
Since NAFTA was signed in 1992, trade between Mexico and the United States has boomed. But the issue of road transport has turned into a political battle. Around two-thirds of cross-border trade goes by road. Transport companies from each country were supposed to be able to operate freely in the others by 2000. The Teamsters union, whose members include American truck drivers, has fought a long and largely successful rearguard action against this provision. It argues that Mexican trucks are unsafe and polluting and their drivers insufficiently trained.
An American court rejected these arguments. So did a NAFTA dispute-settlement panel, which ruled in 2001 that the United States was violating the agreement and gave Mexico the right to impose retaliatory tariffs. Mexico chose not to do so, to give the United States a chance to honour its commitment. The Bush administration tried, but was thwarted when Congress approved a measure setting 22 new safety standards for Mexican trucks.
...The Teamsters’ safety argument looks spurious. Mexican transport firms have invested in new trucks and trained their drivers to meet the safety requirements under the pilot scheme. A study commissioned by America’s Department of Transportation, which tracked Mexican trucks operating north of the border in the first year of the programme, found that these trucks clocked up far fewer safety violations than their American counterparts.
The Teamsters’ victory means that most Mexican goods going north will continue to have to be unloaded at the border, reloaded for the short hop across it, then loaded again onto an American truck...No such restrictions apply to Canadian lorries..."
http://www.economist.com/world/americas/displaystory.cfm?story_id=13331117
Saturday, March 14, 2009
The Worst Decade Ever
TW: As the Republicans rev up the socialist meme re the Dems and Obama please review the data below. Not only is absolute economic growth bad, the distribution of the wealth has been bad. Yet...yet, we are meant to fear the Dems and embrace the same economic know-nothings who got us into this hole.
From Economist:
"...This decade - the 2000s - is set to be the weakest for American real GDP growth since the 1930s. The average growth rate is on course to be 2.5%, below the 3.1% recorded in the 1980s and 1990s and the 3.3% in the dismal (in popular perception) 1970s.
Think back to the start of the decade and all the guff we were told about the internet ushering in a new era of growth. Think back also to the Bush tax cuts which were supposed to be good for growth. Indeed this decade has seen the widest dispersion of wealth since the 1920s; it's not exactly been a triumph for trickle-down economics, has it? It can't be blamed on "socialism" either. Government share of GDP over the last decade has been 17.5-18%, below the 19.1% average over the last three decades.
In truth, of course, economies are driven by a whole host of factors, of which tax policy is far from the most important. UBS thinks the main factor behind the slowdown has been demographic; the participation of females in the workforce has slowed. Worth remembering, also, that GDP per capita is a better indication of individual wealth than pure GDP growth; on that measure, the European Union has been doing a lot better than the general impression in the media suggests. Over the decade 1997-2007, the EU grew at a 1.9% annual rate per capital and America 2.1%; not so bad for a "sclerotic" continent."
From Economist:
"...This decade - the 2000s - is set to be the weakest for American real GDP growth since the 1930s. The average growth rate is on course to be 2.5%, below the 3.1% recorded in the 1980s and 1990s and the 3.3% in the dismal (in popular perception) 1970s.
Think back to the start of the decade and all the guff we were told about the internet ushering in a new era of growth. Think back also to the Bush tax cuts which were supposed to be good for growth. Indeed this decade has seen the widest dispersion of wealth since the 1920s; it's not exactly been a triumph for trickle-down economics, has it? It can't be blamed on "socialism" either. Government share of GDP over the last decade has been 17.5-18%, below the 19.1% average over the last three decades.
In truth, of course, economies are driven by a whole host of factors, of which tax policy is far from the most important. UBS thinks the main factor behind the slowdown has been demographic; the participation of females in the workforce has slowed. Worth remembering, also, that GDP per capita is a better indication of individual wealth than pure GDP growth; on that measure, the European Union has been doing a lot better than the general impression in the media suggests. Over the decade 1997-2007, the EU grew at a 1.9% annual rate per capital and America 2.1%; not so bad for a "sclerotic" continent."
Thursday, March 12, 2009
Obamanomics
TW: Certainly Obama's economic policies are receiving saturation coverage for obvious reasons. Of course, regardless of the coverage we will not whether they are effective for at least a couple of years and likely a decade or more. The hollowness of some of the Reagan policies are just now becoming apparent. Some continue to question FDR's policies 75 years later.
I believe one of the reasons the debate right now is so hot (the attacks from the right have not even completely revved up yet) is that Reaganism became the default dogma, Clinton attempted to soften its edges and tweak it but did not fundamentally challenge certain notions (i.e. "any government is bad", all regulation is bad, the capitalists are to be pampered). The dogma has lost coherence after the Bush years and the collapse of the American financial system.
The question is now what to do? Reich nicely frames the potential impact of Obama below.
From Robert Reich:
"...The basic idea of Reaganomics was that the economy grows from the top down. Lower taxes on the wealthy make them work harder and invest more, and the benefits trickle down to everyone else. Rarely in economic history has a theory been more tested in the real world and proven so wrong. In point of fact, nothing trickled down. After the Reagan tax cuts, increases in the median wage slowed, adjusted for inflation. After George W. Bush's tax cuts for the wealthy, the median wage actually dropped. Meanwhile, most of the income went to the top. In 1980, just before the Reagan revolution, the richest 1 percent took home 9 percent of total national income. But by 2007, the richest 1 percent was taking home 22 percent.
Obamanomics, by contrast, holds that an economy grows best from the bottom up. Obama's program increases taxes on the top, and uses the proceeds to raise the living standards of average Americans by giving them lower taxes, better schools, and more affordable health insurance. That may not seem very radical, but compared to the last quarter century it's revolutionary.
Reaganomics didn't believe in public investment, except perhaps when it came to the military. Everything else was considered government spending, which was assumed to be wasteful. Hence, the cuts (adjusted for inflation) during Reagan, Bush I and Bush II in education, job training, infrastructure, and basic research and development. And the reluctance to expand health insurance except when it came to corporate welfare for the pharmaceutical industry.
But Obamanomics is a commited to these forms of public investment. And there's good reason: In a global economy, capital moves to wherever it can get the best deal around the globe. That means capital and jobs go to nations that can promise high returns either because labor is cheap and taxes and regulations low, or because labor is highly productive -- well educated, healthy, and supported by modern infrastructure.
Which do we want? For the better part of the last quarter century our implicit economic strategy has tended toward the first. But that's a recipe for lower wages and lower living standards for most Americans, along with widening inequality. The only resource that's uniquely rooted in a national economy is its people -- their skills, insights, capacities to collaborate, and the transportation and communication systems that link them together. Everything else -- including capital, technology, designs, even plant and equipment -- can move around the globe with increasing ease.
Bill Clinton talked a lot about the importance of public investment but he failed to do much about it because he came to office during an economic expansion, and the major worry was excessive government spending leading to inflation. Obama comes to office during the biggest downturn since the Great Depression, and although he doesn't talk much about public investment his plan represents the largest commitment to it in forty years.
Reaganomics' third principle was that deregulated markets function better. They do, in many respects, but not always. And when they don't, all hell can break loose. Energy markets were deregulated and we wound up with Enron. Carbon emissions weren't controlled, and now we face global warming. Financial markets were deregulated and we have a global meltdown. Obamanomics, by contrast, accepts that government has an important role in setting the rules of the capitalist game: Setting an overall cap on carbon emissions, ensuring that products and foods are safe, maintaining the solvency and security of financial companies.
Under Reaganomics, government was the problem. It can still be a problem. But Obamanomics recognizes there are even bigger problems out there that can't be solved without government. By building the economy from the bottom up, recognizing the central importance of public investment, and understanding that markets cannot function without regulation, Obamanomics finally reverses and repudiates the economic philosophy that has dominated America since 1981."
http://robertreich.blogspot.com/2009/03/is-obamanomics-conservative-or.html
I believe one of the reasons the debate right now is so hot (the attacks from the right have not even completely revved up yet) is that Reaganism became the default dogma, Clinton attempted to soften its edges and tweak it but did not fundamentally challenge certain notions (i.e. "any government is bad", all regulation is bad, the capitalists are to be pampered). The dogma has lost coherence after the Bush years and the collapse of the American financial system.
The question is now what to do? Reich nicely frames the potential impact of Obama below.
From Robert Reich:
"...The basic idea of Reaganomics was that the economy grows from the top down. Lower taxes on the wealthy make them work harder and invest more, and the benefits trickle down to everyone else. Rarely in economic history has a theory been more tested in the real world and proven so wrong. In point of fact, nothing trickled down. After the Reagan tax cuts, increases in the median wage slowed, adjusted for inflation. After George W. Bush's tax cuts for the wealthy, the median wage actually dropped. Meanwhile, most of the income went to the top. In 1980, just before the Reagan revolution, the richest 1 percent took home 9 percent of total national income. But by 2007, the richest 1 percent was taking home 22 percent.
Obamanomics, by contrast, holds that an economy grows best from the bottom up. Obama's program increases taxes on the top, and uses the proceeds to raise the living standards of average Americans by giving them lower taxes, better schools, and more affordable health insurance. That may not seem very radical, but compared to the last quarter century it's revolutionary.
Reaganomics didn't believe in public investment, except perhaps when it came to the military. Everything else was considered government spending, which was assumed to be wasteful. Hence, the cuts (adjusted for inflation) during Reagan, Bush I and Bush II in education, job training, infrastructure, and basic research and development. And the reluctance to expand health insurance except when it came to corporate welfare for the pharmaceutical industry.
But Obamanomics is a commited to these forms of public investment. And there's good reason: In a global economy, capital moves to wherever it can get the best deal around the globe. That means capital and jobs go to nations that can promise high returns either because labor is cheap and taxes and regulations low, or because labor is highly productive -- well educated, healthy, and supported by modern infrastructure.
Which do we want? For the better part of the last quarter century our implicit economic strategy has tended toward the first. But that's a recipe for lower wages and lower living standards for most Americans, along with widening inequality. The only resource that's uniquely rooted in a national economy is its people -- their skills, insights, capacities to collaborate, and the transportation and communication systems that link them together. Everything else -- including capital, technology, designs, even plant and equipment -- can move around the globe with increasing ease.
Bill Clinton talked a lot about the importance of public investment but he failed to do much about it because he came to office during an economic expansion, and the major worry was excessive government spending leading to inflation. Obama comes to office during the biggest downturn since the Great Depression, and although he doesn't talk much about public investment his plan represents the largest commitment to it in forty years.
Reaganomics' third principle was that deregulated markets function better. They do, in many respects, but not always. And when they don't, all hell can break loose. Energy markets were deregulated and we wound up with Enron. Carbon emissions weren't controlled, and now we face global warming. Financial markets were deregulated and we have a global meltdown. Obamanomics, by contrast, accepts that government has an important role in setting the rules of the capitalist game: Setting an overall cap on carbon emissions, ensuring that products and foods are safe, maintaining the solvency and security of financial companies.
Under Reaganomics, government was the problem. It can still be a problem. But Obamanomics recognizes there are even bigger problems out there that can't be solved without government. By building the economy from the bottom up, recognizing the central importance of public investment, and understanding that markets cannot function without regulation, Obamanomics finally reverses and repudiates the economic philosophy that has dominated America since 1981."
http://robertreich.blogspot.com/2009/03/is-obamanomics-conservative-or.html
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