Why Obamanomics Has Failed

[uscitizen]

Why our current economic system is failing?

At the most base level, becuase it is just more of the same.
We seem to think more of the hair of the dog that bit us will make things better.
And this is a non partisan effort.

Globalization migfht have a bit to do with it as well.

 

[masquerade]

One would think the clowns in control now would read a little history. Find out what worked and go with it.

Ain't holdin my breath though.

Me either.

I've read comments like yours Claudette, an awful lot on this message board and I have to wonder if the current administration doesn't really give two hoots about history. Either that or they think spending our way out of a recession was never done the 'right' way. And now THEY have the knowledge to follow through with the right way to spend us into oblivion.

 

[NYcarbineer]

Great article by economist Alan Meltzer. Many of us have said similar things here but it is nice to see it all put together in one well-argued, well written piece.
Allan Meltzer: Why Obamanomics Has Failed - WSJ.com

Let's dispose of some of the bullshit in the article first:

1. The economy was in expansion when Reagan took office. The 16th month recession began 6 months AFTER Reagan took office.

2. Reagan tripled the deficit.

3. At the time of the Reagan income tax cuts, they had a much higher starting point to begin from. With the Reagan and Bush income tax cuts and massive child credits already in place, with half of Americans already paying NO federal income taxes, with falling tax revenues already hitting the deficits when Obama took office, what is left to cut?

That's just for starters.

 

[Claudette]

Ain't to hard to figure there Yank.

There is uncertainty out there.

This administration and the Clowns in congress have already passed the HC bs. They are talking Crap and Trade carbon tax and the green agenda. They passed a huge stimulus that did nothing.

No business is going to rehire, new hire or expand until they can get a handle on how much more all this is going to cost them.

The admistraion seems to think that spending more is going to create jobs. This has never helped in the history of the US.

JFK and Reagan had it right. History proved that.

One would think the clowns in control now would read a little history. Find out what worked and go with it.

Ain't holdin my breath though.

So....why did the businesses throw so many thousands of Americans into the unemployment lines under Bush? Was THAT the government's fault too?

As I recall Yank. Unemployment under Bush was somewhere around 6%.

Anyone have anything on that???

 

[Sinatra]

Ain't to hard to figure there Yank.

There is uncertainty out there.

This administration and the Clowns in congress have already passed the HC bs. They are talking Crap and Trade carbon tax and the green agenda. They passed a huge stimulus that did nothing.

No business is going to rehire, new hire or expand until they can get a handle on how much more all this is going to cost them.

The admistraion seems to think that spending more is going to create jobs. This has never helped in the history of the US.

JFK and Reagan had it right. History proved that.

One would think the clowns in control now would read a little history. Find out what worked and go with it.

Ain't holdin my breath though.

So....why did the businesses throw so many thousands of Americans into the unemployment lines under Bush? Was THAT the government's fault too?

As I recall Yank. Unemployment under Bush was somewhere around 6%.

Anyone have anything on that???

____


The Bush years saw uemployment range from 4.2% at the start of 2001 to as high as 7.6% during his last month in office - it averaged around 5.5% over the course of his two terms.

Since that time we have of course seen unemployment under Obama rise to over 10%, and now remains stagnant at just under 10%.

The economic "recovery" has proven quite shallow, and with unemployment remaining so high, teh danger of a double-dip recession is a very real possibility.

Thus, as the column points out, Obamanomics has proven a terrible failure due in great part to its anti-business rhetoric, a call for higher tax rates, and its inability to follow the examples of recent American economic history...

 

[Jarhead]

When business, large and small, dumped all of the people into the unemployment lines, back in 2008 and early 2009, was it the government's fault then, too?

Translation = "it's all BUSH'S FAULT!!!"

This is not what I meant. I simply do NOT understand how government is NOT the problem during the collapse, but suddenly now IS the problem because businesses haven't rehired the hundred of thousands of people they laid off in late 08/early 09? Who can explain that?

Recessions come in cycles and are primarily the result of expected market saturation. Unemployment rising to 6% or a bit higher during a recession is not unusual.
Recessions last about 18 months.

When you try to stimulate an economy by pumping money into municipalities to save the jobs of civil servants, it may help stablize the employment of the public sector, but it will do nothing for the private sector. Now, bear in mind.....it will STABLIZE the public sector, not increase employment in the public sector, so no new tax revenue will be generated and no new "spenders" will become employed.

When you ALSO pass initiatives that will cost employers more money DOWN THE NEAR FUTURE road, it will give those employers reason to not hire unless there is clear cut proof that the recession is recovering.

When you threaten initiatives that will cost employers more money down the near future road such as cap and trade, it further intimidtes them and gives them reason to NOT be the pioneer in re-hiring.

When employers are afraid to hire out of concern of meeting their payroll 6 months down the road, the recovery will stall and unemployment will not change for the better.

Pretty much as clear as I can present it. You may want to punch holes in it all you want, but what is, is. Sure...maybe I am wrong. But you can not dispute the logic.

 

[VaYank5150]

So....why did the businesses throw so many thousands of Americans into the unemployment lines under Bush? Was THAT the government's fault too?

As I recall Yank. Unemployment under Bush was somewhere around 6%.

Anyone have anything on that???

____


The Bush years saw uemployment range from 4.2% at the start of 2001 to as high as 7.6% during his last month in office - it averaged around 5.5% over the course of his two terms.

Since that time we have of course seen unemployment under Obama rise to over 10%, and now remains stagnant at just under 10%.

The economic "recovery" has proven quite shallow, and with unemployment remaining so high, teh danger of a double-dip recession is a very real possibility.

Thus, as the column points out, Obamanomics has proven a terrible failure due in great part to its anti-business rhetoric, a call for higher tax rates, and its inability to follow the examples of recent American economic history...

This is the point I am after. IF, this Meltzer and you who agree want to blame "Obamanomics" for maintaining the bad business atmosphere created under the previous administration, then WHAT policies from that previous administration caused this collapse just prior to Obama taking office?

 

[Jarhead]

As I recall Yank. Unemployment under Bush was somewhere around 6%.

Anyone have anything on that???

____


The Bush years saw uemployment range from 4.2% at the start of 2001 to as high as 7.6% during his last month in office - it averaged around 5.5% over the course of his two terms.

Since that time we have of course seen unemployment under Obama rise to over 10%, and now remains stagnant at just under 10%.

The economic "recovery" has proven quite shallow, and with unemployment remaining so high, teh danger of a double-dip recession is a very real possibility.

Thus, as the column points out, Obamanomics has proven a terrible failure due in great part to its anti-business rhetoric, a call for higher tax rates, and its inability to follow the examples of recent American economic history...

This is the point I am after. IF, this Meltzer and you who agree want to blame "Obamanomics" for maintaining the bad business atmosphere created under the previous administration, then WHAT policies from that previous administration caused this collapse just prior to Obama taking office?

There is only one difference between this and other other recession of recent history. The collapse of the credit market.

And that was not the fault of any administration.

That was the fault of congress.

 

[Claudette]

So....why did the businesses throw so many thousands of Americans into the unemployment lines under Bush? Was THAT the government's fault too?

As I recall Yank. Unemployment under Bush was somewhere around 6%.

Anyone have anything on that???

____


The Bush years saw uemployment range from 4.2% at the start of 2001 to as high as 7.6% during his last month in office - it averaged around 5.5% over the course of his two terms.

Since that time we have of course seen unemployment under Obama rise to over 10%, and now remains stagnant at just under 10%.

The economic "recovery" has proven quite shallow, and with unemployment remaining so high, teh danger of a double-dip recession is a very real possibility.

Thus, as the column points out, Obamanomics has proven a terrible failure due in great part to its anti-business rhetoric, a call for higher tax rates, and its inability to follow the examples of recent American economic history...

Good post.

Thanks Sinatra

 

[Guerrilla]

Great article. Sadly, the Obama apologists will do what they always do - blame BUSH!~!!

Republicans never do this? Here's a funny video clip showing Republicans deflecting blame from Bush to Clinton for Bush's ENTIRE presidency.

Video: Blame | The Daily Show | Comedy Central

Like moths to a flame...

 

[Soggy in NOLA]

Obamanomics? You give it way to much credit...

It's just a vast lack of understanding of reality. These pinheads have never done done a damn thing in their lives. Need more money? TAKE IT! Need even more money? PRINT IT!!!! Problems? THROW MONEY AT IT. Didn't work? THROW MORE MONEY AT IT! That didn't work? THROW EVEN MORE MONEY AT IT!!

When all else fails, lie about it and blame it on Bush. Or Reagan... or maybe even George Washington.

 

[editec]

Two overarching reasons explain the failure of Obamanomics.

First, administration economists and their outside supporters neglected the longer-term costs and consequences of their actions.

Have they?

Second, the administration and Congress have through their deeds and words heightened uncertainty about the economic future.

A fair complaint. Of course economic uncertainty does come with the territory, doesn't it?

High uncertainty is the enemy of investment and growth.

True dat.

When people see million of people losing their jobs, they're apt to curtail spending.

 

[keee keee]

Good article.

I wonder if OL'BO will read it and catch a clue??

Ain't holdin my breath.

Now a days the democrats don't read the bills but will find out what is in them after they pass them!!!! This country is fucked!!! I really feel sorry for the young they are screwed and don't know it yet!!!! Up shit creek without a paddle and have holes in the boat.

 

[mascale]

This is a professor of Economics, in one of the places that caused it all, continuing to not allow math to be applied to current economics.

The $50.0 tril. plus, Great Socialist Total Credit Market aside, there is this from the OP link:

"Most of the earlier spending was a very short-term response to long-term problems. One piece financed temporary tax cuts. This was a mistake, and ignores the role of expectations in the economy. Economic theory predicts that temporary tax cuts have little effect on spending. Unless tax cuts are expected to last, consumers save the proceeds and pay down debt. Experience with past temporary tax reductions, as in the Carter and first Bush presidencies, confirms this outcome."

Nearly half of U. S. federal income tax filers have no liabiity to pay. The Refundable Tax Credit is still in place, and spending is on the increase. Personal Income is on the increase. People who desperately needed the $800.00, actually got it. For the rich, $800.00 barely buys one share of some stocks.

"Another large part of the stimulus went to relieve state and local governments of their budget deficits. Transferring a deficit from the state to the federal government changes very little. Some teachers and police got an additional year of employment, but their gain is temporary. Any benefits to them must be balanced against the negative effect of the increased public debt and the temporary nature of the transfer."

It is slowly being conceded that funding the people who caused it all: Makes no sense. This is the "Preservative" Part of the Stimulus that actually preserved the arithmetic problem of the cause.

"The Obama economic team ignored past history. The two most successful fiscal stimulus programs since World War II—under Kennedy-Johnson and Reagan—took the form of permanent reductions in corporate and marginal tax rates. Economist Arthur Okun, who had a major role in developing the Kennedy-Johnson program, later analyzed the effect of individual items. He concluded that corporate tax reduction was most effective."

That paragraph is about the Mediocre Myopia that is all about the article, linked in the OP. People are not paying any federal income taxes, and corporate tax rates have been getting cuts for years. A long time ago, Corporate income taxes were upwards of 30% of the federal take. Now it's closer to 10% of the federal take, and half the individual federal income tax filers actually owe nothing. 10% of less is still next to nothing.

"Another defect of Obamanomics was that part of the increased spending authorized by the 2009 stimulus bill was held back. Remember the oft-repeated claim that the spending would go for "shovel ready" projects? That didn't happen, though spending will flow more rapidly now in an effort to lower unemployment and claim economic success during the fall election campaign."

So the "Double-Diippers" think that the Stimulus was spent, and the rest of the world thinks that it's getting spent this summer. Anyone sees the "Invisible Hands" and minds of economists at work! Cash for Clunkers was toward the beginning. The Refundable Tax Credit went into effect. Public Works failed to happen. Stage and Local governments now do have less business to tax, that should have been available in public works--instead of bailing out state and local governments!

"In his January 2010 State of the Union address, President Obama recognized that the United States must increase exports. He was right, but he has done little to help, either by encouraging investment to increase productivity, or by supporting trade agreements, despite his promise to the Koreans that he repeated in Toronto. Export earnings are the only way to service our massive foreign borrowing. This should be a high priority. Isn't anyone in the government thinking about the future? "

So the Euro is falling, helping with imports--and those who sell and service imports--and the yuan is rising, helping with exports and those who make and ship the exports. That is not nothing, and took some prodding. The Euro-Socialists had done the largesse-as-usual social spending. Now they have basis to pay it back. The Asian Socilaists now want more of what there is to have, starting with nothing, but now with more spending power!

Mainly, especially Conservative Economists just very certain that nothing much has happened, even to 1/3 of the planet's populations, and well over half of the one's with any usable money.

Kenya, Haiti, and Bangladesh--Somalia and others--are not in scope, even now. Mostly that goes unnoticed, even in the GDP kinds of discussions, left, liberal or conservative.

"Crow, James Crow: Shaken, Not Stirred!"
(Middle ground discussions are representated in the OP link, aka Myopic, Muddled, and Confused!)

 

[Charles_Main]

Great article by economist Alan Meltzer. Many of us have said similar things here but it is nice to see it all put together in one well-argued, well written piece.
Allan Meltzer: Why Obamanomics Has Failed - WSJ.com

You are right - fantastic column that clearly outlines in simple terms the utter failure of this White House and Democrat Congress to understand basic principles of economics.

American business, both large and small, sits idle out of uncertain fear of what is coming next from this administration.

The real recipe for economic success is there - both Reagan and JFK initiated similar plans of reducing corporate and marginal tax rates to allow business the opportunity to expand, hire, and profit.

These Democrats - including Obama, have placed themselves in a corner because they have engaged in persistent anti-business rhetoric and calls for more taxes, not less. While half of Americans pay NO taxes, the Democrats continue to demand the higher income folks pay even MORE taxes.

The American economy is being stifled - and the American worker is suffering mightily because of it.

Obamanomics are failing all of us...

When business, large and small, dumped all of the people into the unemployment lines, back in 2008 and early 2009, was it the government's fault then, too?

Um yes considering it was largely bad government policy that caused the economic melt down that caused the loss of jobs.
Fanny and freddie anyone?

 

[code1211]

When business, large and small, dumped all of the people into the unemployment lines, back in 2008 and early 2009, was it the government's fault then, too?

Translation = "it's all BUSH'S FAULT!!!"

This is not what I meant. I simply do NOT understand how government is NOT the problem during the collapse, but suddenly now IS the problem because businesses haven't rehired the hundred of thousands of people they laid off in late 08/early 09? Who can explain that?

When investors are reasonably confident that the government will do everything that can be done to encourage and support success in business, then investors will invest and riskers will risk.

Without the investment and the risk taking, there is less growth. The jobs did not disappear due to anything beyond the lack of work which dried up right after the investment dried up. Jobs don't create companies. Companies create jobs.

When the government actively and publicly declares that it is going to punish anyone who is successful or profitable, the incentive to be successsful or profitable loses its luster.

The Obama administration is actively and aggressively taking every measure available to stop growth and is threatening to take more aggressive steps in the future.

There may be no connection whatsoever between the Dems taking control of the government and the economy getting destroyed. Then again, there might be. There might be no connection between the failed economy and the failed programs of the Congress and the White house. Then again, there might be.

What's pretty clear is that while the house is burning, our current set of firemen are trying to convince us that someone else lit the match instead of putting out the fire.

I wish they'd put out the fire.

 

[NYcarbineer]

I'd like each conservative here to tell us what they would have done, had they been elected president and taken office on January 21st, 2009.

1. Your plan must bring the country out of recession and create millions of jobs.

2. Your plan must also balance the budget. No deficit spending allowed, since you guys rail against deficits now as they were the plague.

Ready?

Go!!!!

 

[Sinatra]

Read the article - it's actually quite simple.

Reduce tax rates - particularly corporate rates.

Initiate a 2-year spending freeze. No healthcare BS, no Cap n Trade BS. During that 2-year spending freeze, do an honest audit of all federal government programs and cut and/or eliminate those that are simply not necessary, such as the Dept. of Education.

Watch the business cycle boom, jobs created, people back to work...

What we have seen instead is a call for higher taxes, more regulation, a massive expansion of government and government spending - all things that history has proven to cripple economic growth - see Greece, Spain, Italy, former Soviet Union, etc...

 

[NYcarbineer]

Read the article - it's actually quite simple.

Reduce tax rates - particularly corporate rates.

Initiate a 2-year spending freeze. No healthcare BS, no Cap n Trade BS. During that 2-year spending freeze, do an honest audit of all federal government programs and cut and/or eliminate those that are simply not necessary, such as the Dept. of Education.

Watch the business cycle boom, jobs created, people back to work...

What we have seen instead is a call for higher taxes, more regulation, a massive expansion of government and government spending - all things that history has proven to cripple economic growth - see Greece, Spain, Italy, former Soviet Union, etc...

LOL. Shut up.

Seriously. Any adult conservatives want to take up my challenge?

 

[Charles_Main]

I have never understood why thinking people would insist on high taxes on cooperation's.

Anyone with a basic grasp of Business knows any tax levied on a for profit cooperation. Will only appear to be paid by the Cooperation. As they will adjust their, Prices or Fees up to compensate for the tax. Therefore the actual Payee of the new tax is the end consumer.

You and I

If they do not adjust their prices/fees up to compensate, then they will have to get by on that much less profit, which may lead to people losing jobs.

I mean I know, I see the emotional argument to tax the hell out of cooperations making obscene profits, really I do, But Basic Common sense tells you Raising their taxes is only going to hurt us in the end.