Obama, Geithner Get Low Grades From Economists

[Skull Pilot]

WSJ.com Economic Forecasting Survey Gives Obama, Geithner Low Grades - WSJ.com

U.S. President Barack Obama and Treasury Secretary Timothy Geithner received failing grades for their efforts to revive the economy from participants in the latest Wall Street Journal forecasting survey.

The economists' assessment stands in stark contrast with Mr. Obama's popularity with the public, with a recent Wall Street Journal/NBC poll giving him a 60% approval rating. A majority of the 49 economists polled said they were dissatisfied with the administration's economic policies.

On average, they gave the president a grade of 59 out of 100, and although there was a broad range of marks, 42% of respondents rated Mr. Obama below 60. Mr. Geithner received an average grade of 51. Federal Reserve Chairman Ben Bernanke scored better, with an average 71.

The economists, many of whom have been continually surprised by the depth of the downturn, also pushed back yet again their forecasts for when a recovery would begin. On average, they expect the downturn to end in October. Last month, they said the bottom would arrive in August. They estimate that U.S. gross domestic product will continue to contract in the first half of this year, with slow growth returning in the third quarter.

Economists were divided over whether the $787 billion economic-stimulus package passed last month is enough. Some 43% said the U.S. will need another stimulus package on the order of nearly $500 billion. Others were skeptical of the need for stimulus at all.

However, economists' main criticism of the Obama team centered on delays in enacting key parts of plans to rescue banks. "They overpromised and underdelivered," said Stephen Stanley of RBS Greenwich Capital. "Secretary Geithner scheduled a big speech and came out with just a vague blueprint. The uncertainty is hanging over everyone's head."

Mr. Geithner unveiled the Obama administration's plans Feb. 10, but he offered few details, and stocks sank on the news. The Dow Jones Industrial Average is down almost 20% since the announcement, as multiple issues have weighed on investors' confidence. The Treasury secretary has since appeared before Congress and offered more specifics but has said action on key parts of the plan still is weeks away.

"We have taken an unprecedented level of action toward economic recovery, accomplishing in weeks what took other countries years to do," Treasury spokesman Isaac Baker said. "While Wall Street and investors were disappointed when they didn't get a sweeping bank bailout, we've laid out a plan to stabilize the financial system while protecting the taxpayer and ensuring government funds are spent wisely. This crisis was years in the making, and it will take time to solve."

Treasury has started implementing a housing-recovery plan, moved forward on a joint program with the Fed to boost consumer lending, and has begun stress-testing banks in an effort to determine which institutions will need additional capital from the government. The results of the stress tests won't be known for a few weeks. Meanwhile, a key part of the plan -- a public-private partnership to take toxic assets off bank balance sheets -- remains in the planning stages.

The economists' negative ratings mark a turnaround in opinion. In December, before Mr. Obama took office, three-quarters of respondents said the incoming administration's economic team was better than the departing Bush team. However, Mr. Geithner's latest marks are lower than the average grade of 57 that former Treasury Secretary Henry Paulson received in January.

Mr. Geithner, who is relying on a skeleton crew of advisers in the Treasury Department as the administration struggles to make key appointments to his staff, is encountering the same problems as his predecessor in dealing with the complexities of a bailout plan. Richard DeKaser of Woodley Park Research, who gave high marks to Messrs. Obama and Geithner, admitted disappointment in the delay in action but said he appreciated the magnitude of the task. "I don't know what's holding it up," he said. "But I'm assuming it's not just because they're hitting the golf course."

There was widespread initial support for the appointment of Mr. Geithner, who as president of the New York Federal Reserve had been on the front lines of the crisis since it erupted. However, in the ensuing weeks Mr. Geithner has had to deal with tax troubles and criticism from those opposed to any bailouts as well as those who think the government needs to be doing more.

Meanwhile, the economists surveyed this month predict that the economy will shed another 2.8 million jobs over the next 12 months as the unemployment rate climbs to 9.3% by December, up from the 8.1% rate recorded in February. Economists also see nearly a one-in-six chance that the U.S. will fall into a depression, defined as a decline in per-person GDP or consumption by 10% or more.

"We just keep moving the date [when the recession will end] out, hoping at some point in time we will be able to move the date back in," said Diane Swonk of Mesirow Financial.

The economists didn't just single out the U.S. for criticism; 70% of participants said the response of governments around the world to the global recession has been inadequate. "The Europeans or Japanese don't seem to be doing near enough to kickstart their economies," said Nariman Behravesh of IHS Global Insight. "It could be we've done all the right things, but the rest of the world goes down the tubes."

Despite the growing criticism elsewhere, the respondents were broadly supportive of the Fed. More than 85% of the economists agreed that the central bank's proliferating lending programs are well-designed, well-executed and helping the economy. And while grades for Mr. Bernanke remain off of their 2007 highs, the average has stabilized after falling as low as 69 in the November survey.

Amid all the gloom, there is a bright spot: Four-fifths of the economists said now is a good time to buy equities, especially if the investor has a long-term view.

 

[maneal]

Is anyone really surprised? The economy has tanked even worse since Obama took over from Bush.

Spending and socialism... thats the agenda of the day for the Obama White House and the Dems in Congress.

 

[Ravi]

I wish they'd printed the questions because it sounds like most of them don't think he was aggressive enough. I agree. He needs to nationalize the banks temporarily and clean up this mess.

This was pretty funny:

The economists, many of whom have been continually surprised by the depth of the downturn

 

[Xenophon]

What a shock, economists saying that spending money you don't have on things you don't need is a bad idea.

 

[Pyrite]

And an apparently equal number of them saying we aren't spending enough of it.

 

[xsited1]

So Obama can fool the masses... Who knew?

 

[WillowTree]

So Obama can fool the asses... Who knew?

there! I fixed that one for ya!

 

[Peejay]

Are these the same economist that have been repeatedly blind sided by this avalanche ? WTF do they know ? Money is for spending people. That's the whole game.

 

[bk1983]

What a shock, economists saying that spending money you don't have on things you don't need is a bad idea.

Nearly half said the exact opposite, apparently the administration has not spent enough.

Some 43% said the U.S. will need another stimulus package on the order of nearly $500 billion.

 

[Xenophon]

What a shock, economists saying that spending money you don't have on things you don't need is a bad idea.

Nearly half said the exact opposite, apparently the administration has not spent enough.

Some 43% said the U.S. will need another stimulus package on the order of nearly $500 billion.

Is having a lot of really stupid people supposed to be relivent?

 

[bk1983]

What a shock, economists saying that spending money you don't have on things you don't need is a bad idea.

Nearly half said the exact opposite, apparently the administration has not spent enough.

Some 43% said the U.S. will need another stimulus package on the order of nearly $500 billion.

Is having a lot of really stupid people supposed to be relivent?

It is relevant when those same stupid people are giving out the grades.

 

[Xenophon]

Nearly half said the exact opposite, apparently the administration has not spent enough.

Some 43% said the U.S. will need another stimulus package on the order of nearly $500 billion.

Is having a lot of really stupid people supposed to be relivent?

It is relevant when those same stupid people are giving out the grades.

So, you believe Bo and the G man are doing a bang up job, do you?

1.2 Trillion added to the debt, and that is without interest.

Market and economy no better, no jobs added.

Funny yardstick you have there for success.

 

[bk1983]

Is having a lot of really stupid people supposed to be relivent?

It is relevant when those same stupid people are giving out the grades.

So, you believe Bo and the G man are doing a bang up job, do you?

1.2 Trillion added to the debt, and that is without interest.

Market and economy no better, no jobs added.

Funny yardstick you have there for success.

It is way too early to judge the effects the stimulus will have.

But the idea that these economists should be listened to, when half say the stimulus is bad, and the other half says we need more stimulus is a joke. I missed the article where these same economists predicted the collapse of the economy.

 

[Xenophon]

It is way too early to judge the effects the stimulus will have.

No it isn't, because the 'stimulus' was a fraud, it was just a long wish list dems wanted to enact for many years. It was so bad they hid it and didn't even let law makers read it before it was voted on.

Calling it a 'stimulus package' was a fraud from day one.

 

[Ravi]

It is relevant when those same stupid people are giving out the grades.

So, you believe Bo and the G man are doing a bang up job, do you?

1.2 Trillion added to the debt, and that is without interest.

Market and economy no better, no jobs added.

Funny yardstick you have there for success.

It is way too early to judge the effects the stimulus will have.

But the idea that these economists should be listened to, when half say the stimulus is bad, and the other half says we need more stimulus is a joke. I missed the article where these same economists predicted the collapse of the economy.

I didn't get that from reading the article. It said "some" thought we didn't need a stimulus without telling us how many those "some" were...it could have been two. It sounds to me that the majority of them think Obama isn't doing enough to rescue the economy.

Though I agree with your other point, since it says The economists, many of whom have been continually surprised by the depth of the downturn...what is an economist but someone with a theory, after all?

 

[Skull Pilot]

So, you believe Bo and the G man are doing a bang up job, do you?

1.2 Trillion added to the debt, and that is without interest.

Market and economy no better, no jobs added.

Funny yardstick you have there for success.

It is way too early to judge the effects the stimulus will have.

But the idea that these economists should be listened to, when half say the stimulus is bad, and the other half says we need more stimulus is a joke. I missed the article where these same economists predicted the collapse of the economy.

I didn't get that from reading the article. It said "some" thought we didn't need a stimulus without telling us how many those "some" were...it could have been two. It sounds to me that the majority of them think Obama isn't doing enough to rescue the economy.

Though I agree with your other point, since it says The economists, many of whom have been continually surprised by the depth of the downturn...what is an economist but someone with a theory, after all?

A theory like the Keynesian multiplier?

 

[editec]

I wish they'd printed the questions because it sounds like most of them don't think he was aggressive enough. I agree. He needs to nationalize the banks temporarily and clean up this mess.

This was pretty funny:

The economists, many of whom have been continually surprised by the depth of the downturn

You just nailed it, Ravi.

Where were all these genuises BEFORE the meltdown?

They were pissing all over themselves with joy telling us how the economic fundamentals were sound, that's where they were.

There were telling us about the international disconnect that would prevent an American economic disturbance from effecting the rest of the world.

They were applauding tax breaks for billionaires on Wall Street while ignoring the DEPRESSION that had already hit Main Street.

Sonner or later, most of you are going to figure it out: NOBODY KNOWS NOTHING!

Why weren't they, as I was, pointing out that historically the median price of a home needed to be somewhere in the price range of the average median family salary?

They missed that, somehow, didn't they?

Which is odd since economists definitely DID seem to understand that reality just thirty years ago.

Why weren't ANY OF THEM warning us about the DEREIVATIVES HOUSE OF CARDS that the bankers and financiers were building?

Why did they MISS the fact that the growing income and asset inequity was creating stock and bond bubbles that were bound to burst?

Economists agree?

Please...don't make me laugh.

You might as well tell me that astonomers all agree.

These so called economists are great at giving the economy a retrospective glance to tell us what happened.

But their ability to understand what is happening is clearly worthless.

And one cannot help but think that given that, they cannot even tell when the economy is getting sick, their ability to tell us what it is GOING TO DO, is probably complete nonsense, too.

 

[Ravi]

It is way too early to judge the effects the stimulus will have.

But the idea that these economists should be listened to, when half say the stimulus is bad, and the other half says we need more stimulus is a joke. I missed the article where these same economists predicted the collapse of the economy.

I didn't get that from reading the article. It said "some" thought we didn't need a stimulus without telling us how many those "some" were...it could have been two. It sounds to me that the majority of them think Obama isn't doing enough to rescue the economy.

Though I agree with your other point, since it says The economists, many of whom have been continually surprised by the depth of the downturn...what is an economist but someone with a theory, after all?

A theory like the Keynesian multiplier?

Yes, that, too. The trouble with most economists, I think, is that they are so married to their philosophies that they don't understand that sometimes something works but it doesn't work in every situation.

 

[rayboyusmc]

It's tanked even worse since Obama won the election.

No shit sherlock. When something like this starts it continues to get worse until the solutions have been put into place and had time to work. What a partisan cop out to reality. Obama has had 52 days and hasn't fixed up what Bush broke in the last 8 years. I love the objectivity of the right now that they have lost their grip on tax cuts forever.

The economists, many of whom have been continually surprised by the depth of the downturn, also pushed back yet again their forecasts for when a recovery would begin.

Who are these economists? I bet I can find others who disagree with them. And finally if they were surprised by the depth of the downturn, they apparently aren't that sharp themselfs about what what was happening

 

[garyd]

Get back to me when he puts some actuall solutions inplace in stead of the horse crap we are getting now. Since Jan. 20th we've spent damn near 1. 2 trillion dollars to lose another million or so jobs and watch Wallstreet collpase to levels not seen since the 1990's. And if this doean't turn around by 2010 Obama will have to figure out how to deal with a Republican Majority because however popular Obama is the Democratic congress has scarcely been in double dsigits popularity wise since it bacame Democratic.