Nominations Oversights May Be Obama's Biggest Sin.
Especially if we throw Ben Bernanke into the mix...
Sunday Night Futures
57 minutes ago
This blog was previously devoted to seeing to it that Larry Summers get to spend more time with his family. Mission accomplished! The next mission is to provide the President with sage Economic advice.
“Most of the economic policies that support robust economic growth in the long run are outside the province of the central bank,” he said.And yet the Fed does nothing. Awesome.
"The recent data have indicated that economic growth during the first half of this year was considerably slower than the Federal Open Market Committee had been expecting, and that
temporary factors can account for only a portion of the economic weakness that we have observed. Consequently, although we expect a moderate recovery to continue and indeed to strengthen over time, the Committee has marked down its outlook for the likely pace of growth over coming quarters. "With commodity prices and other import prices moderating and with longer-term inflation expectations remaining stable, we expect inflation to settle, over coming quarters, at levels at or below the rate of 2 percent, or a bit less, that most Committee participants view as being consistent with our dual mandate."
“It’s hard to make the argument that QE2 was a rousing success or we wouldn’t be on the verge of seeing QE3,” the economists at RBC Capital Markets wrote in a client note. “The market may very well get what it seems to desire, but we believe there is no magic bullet here.”But of course, by this logic, those 7 Federal Funds rate cuts in 2008, when the rate went from 4.25 to 0-0.25 by Q4, 2008, when GDP fell at an 8.9 percent rate, were particularly unhelpful.
Yuck.I think this is completely wrong-headed. Although I think Obama could have gotten a better deal, and should not have agreed to this, one of the key details is that it cuts budgeting authority by just $22 billion in 2012. That should reduce GDP growth by just .3 percent. Obviously, that's not the direction we want to move in, but that alone should have limited impact. My sense is that anything after 2012 will need to be ratified by future Congresses. I'm not really clear on how much "inertia" the deal will create, but I don't see how this deal is grounds to dramatically reinterpret one's support for Obama. The President could likely have gotten smaller cuts in 2012, but would have been really hard-pressed to get a small increase. Should the president have threatened default over $20 billion in 2012 spending? That seems like a judgment call...
That's what I have to say about President Obama's capitulation to the hostage-taking ways of congressional Republicans.
I suppose I might change my mind, but after watching the President give in to the Boehner-McConnell blackmail axis, I don't imagine I'll be spending much of my time advocating his re-election. Assuming he's the Democratic nominee, which I do, I'll vote for Obama, because the alternative will still--somehow--be worse. But I really can't see how, in good conscience, I could defend the economic policies of a guy who has signed on to fiscal contraction in the midst of a major downturn. And that's leaving aside the President's apparent lack of understanding of the importance of bargaining from strength. So much for all that poker expertise he's supposed to have.
What a shame.