I don’t understand the chart you’ve attached. When Bush left office, unemployment was 8%. In fact, the “stimulus” was sold as a way to keep it under 9%. Now it’s close to 10% (and would be well over that if various tricks weren’t used). Even if the “stimulus” spending helped (which I doubt), than attributing any improvement to it is a classic “post hoc” error. Maybe it would have improved even more if taxes had been cut instead or maybe even if nothing had been done.

The reasons the public is unhappy are simple:
– The Democrats passed a massive and scary Health bill which most Americans opposed and still oppose
– The Democrats focused on this Health bill for most of a year, ignoring the economy and jobs issues which were of greatest concern
– Most Americans think Obama’s handling of the BP spill was slow and poorly managed
– Most Americans think the “stimulus” bill didn’t do much for the economy and was a waste of money.
– Americans think that their taxes are going up (for example the new charges under Obamacare and the expiration of the Bush tax cuts).
– In general Americans view Obama and the Democratic Congress as out of control in terms of spending

The Unemployment bill is a classic example of this. Republicans didn’t oppose it–they opposed enacting it without an offsetting budget item to account for the money. Democrats just rammed through the extra spending. And as a “solution” to the current unemployment crisis, it’s a band-aid at best. And it puts America even deeper in the deficit hole that Obama and Congress are busy digging.

The Financial bill is a huge morass of new agencies and rules which will make credit harder to secure for business and generally depress investment and markets. It assumes Government has perfect foresight and judgment of what’s best for the market–a highly debatable proposition. The fact that Frank and Dodds (who wrote it) are personally responsible for the screw-up of Fannie Mae and Freddie Mac doesn’t give me any confidence. Arguably, those two are more responsible for the financial crisis than anyone in the Bush administration.

The economy won’t improve until Businesses are confident. And right now, they are shell-shocked. Obamacare, the Financial bill and the flood of other new regulations are imposing new costs on them daily and making them reluctant to make new commitments–especially hiring commitments. When you can’t predict your future cost of doing business, you hunker down and try to keep expenses low until the dust settles.

The problem isn’t that Obama isn’t getting things passed. The problem is that Americans don’t like the new laws that he’s passing. I think Americans know *exactly* what they’re doing. The only issue is that the media, the President, the Democrats in Congress and liberal commentators don’t like it.

Well, I’ll try:

The administration of public policy, especially the stimulus, is a lot like the administration of antibiotics.

Say you have a sinus infection: without killing the infection you will basically have flue and cold like symptoms ongoing for almost forever. If the doctor gives you too little dosage of antibiotic or for too short of time it only makes things worse. For a sinus infection, after going on Antibiotics, you’ll see big improvement after 3 days, and usually gone after 11, but a smart doctor will give you a very strong dosage for 14 days, to ensure the infection is dead, buried and has a stake through its heart so as not to easily come back again.

Most people don’t follow politics. Most people are illiterate in civics. Many people are easily manipulated by the madmen ad-men behind Republican propaganda.

The guy working two jobs only knows that the economy sucks. Obama had two years to fix it and he didn’t.

Republican strategy is organized around all of this (as is Obama). The stimulus was too small of a dosage to be effective. Now political opposition for a more effective dosage faces more political opposition to be effective. Like wise the Republicans manage to gut health care reform, wall street reform, the present jobs bill, and several other things that escape me right now.

Obama’s problem is that he prefers to take the half loaf that comes without a political fight then to fight for the whole loaf or a better deal for the public. This gives him the diluted antibiotic problem.

In November, people will go to the polls and if things aren’t much different from now, they’ll vote against whomever is in office now.

If that happens the Republican strategy will have worked. Maybe they’ll try to redeem themselves and implement better policy. But I doubt it. Instead they will hammer the economy further into the ground. I think Obama is banking on this too. He figures he’ll get the whiphlash effect coming back his way in 2012. The first year after the second election is when we see the real intentions of a President (Bush used this period to try to take a run at destroying Social Security).

The curve ball here is the effect that Citizens United will have on our politics. This is why I think the Republicans are more brazen about screwing ordinary Americans than they have in the past. I think that they’ve concluded that no one is going to get elected if they are not at least condoned by the Corporatocracy. Perhaps the head of government is now the leader of the U.S. Chamber of Commerce.

I’m sorry, 900 BILLION dollars was just too little money? That’s about 1/33rd of the GDP for the ENTIRE PLANET.

The main reason the “stimulus” didn’t work (which even you seem to agree with) is that Kenseyian stimulus is fatally flawed as a strategy. Japan spent a fortune on “stimulus” during the 1990’s and the economy was in the tank the entire time. Government spending just takes dollars that would have been spent by business or individuals and spends them in a different (usually less useful and productive) way as “stimulus”.

Which brings us to the 2nd problem. Obama couldn’t be bothered drafting the “stimulus” bill, so he turned it over to Congress, who proceeded to turn it into a gift package for every possible Democratic special interest group. While the bill did help teacher’s unions and government service workers, it did remarkably little to create jobs and infrastructure. Even as wasteful spending, it was a failure.

I guess I’m one of those “easily manipulated people” who “knows that the economy sucks. Obama had two years to fix it and he didn’t.” (an is still trying to pin the blame on Bush to boot.)

And by the way, Bush did try to privatize Social Security. I’d hardly call that trying to “destroy” it. As most people know, the current Ponzi scheme is underfunded and oversubscribed. Most Americans–especially younger ones–have very little confidence that it will ever pay them anything at all. By putting the money into real accounts that you can track (like an IRA), it would be a system you could believe in again, rather than a money bag to be raided by Congress.

I also think Obama’s strategy in 2012 will be to blame his continuing economic failures on the Republicans. He’s been blaming and actively bad-mouthing Bush for two years straight, so why change now? Whether Americans still believe him in 2012 is another story.

If you think that Republicans are owned by Corporations and Democrats “stand up for the little guy” than you are a gullible fool. Take a look at the actual corporate contributions to both parties and then get back to me as to who is in whose pocket.

Hi Geoff,
You sound like a level-headed, likable person, which is why it’s hard to understand your support for anything Republican. Too many issues in your post to address, but just allow me to respond to a few:

“I don’t understand the chart you’ve attached. When Bush left office, unemployment was 8%…”

That chart clearly shows the downward freefall that Bush left behind for the next guy to clean up. In fact, I have seen the same chart on Washington Post as well as other websites:
[www.changetowin.org/connect/2009/12/unemployment_after_yougo_over.html].
Somehow this information doesn’t get much coverage on FOX News…If you have a chart that disputes those numbers, I would be interested in seeing it.

You may be correct to criticize the stimulus package. But consider what might have happened without any action. That is what that chart is about.

All I can say is, the stimulus might have been too little too late (as Tim’s medicinal analogy illustrates). But more importantly, one may ask, “What was W doing while the economy was going down the toilet?”
Even you admitted unemployment was at an unprecedented 8%. Is it so difficult to find the connection between tax breaks for the rich and job losses for the not-so-rich? Had Bush implemented his own stimulus instead of padding his wealthy friends’ pockets, we might not be in this economic quagmire that Obama is desperately trying to fix.

And this is consistent with Republican criticism of Obama in general. The previous adm had made a horrible mess on nearly every possible front, from foreign affairs to domestic economics. So that the next guy has to spend billions in much-needed dollars and months of work just to repair the extensive damage left behind.

And to the second point:

“Most Americans think Obama’s handling of the BP spill was slow and poorly managed”

Not much point to defending Obama on that issue. Clearly he dropped the ball in many respects. And he accepted full blame for the disaster, yet the real blame lies first and foremost on the Oil Companies, but partially on the adm that let allows the oil companies to write their own rules in terms of drilling rights and clean-up policies. [Just who was in office when those oil drilling regulations were written…?] So again, it is a bit short-sighted to pin the whole mess on Obama, I think.

I believe that is why more govt, not less govt, is needed in order to force those hideously wealthy industries to conform to some rules of social and fiscal responsibility.

Third point:

“Americans think that their taxes are going up (for example the new charges under Obamacare and the expiration of the Bush tax cuts).”

In fact, in 2009 most Americans paid less taxes, not more taxes, than previous years (unless they are among the incredibly wealthy). Enough said on that, I think, unless you feel the wealthy should pay even less…

Anyway, that is why I voted for Obama; because he is trying to deal with economic/social issues and private industries that are nearly beyond repair, thanks to a lack of vision/foresight of the previous adm. Obama came in to make changes, but ended up spending most of his term digging us out of the huge recession created by rampant lack of corporate supervision.

Thanks for letting me vent!

Geoff’s above feeds in to my answer to Luis’ question:

Q: Why are Americans set to elect more Republicans this year?

A: Because we are a nation of idiots.

@Geoff:

When Bush left office, unemployment was 8%. In fact, the “stimulus” was sold as a way to keep it under 9%. Now it’s close to 10%

Way to lie with numbers, Geoff.

Unemployment in 1/2008 wasn’t just “8%” it was passing through 8% as the Bush Economy continued the pullback that started in late 2007.

This chart:

http://1.bp.blogspot.com/_pMscxxELHEg/TD8BitmVHOI/AAAAAAAAI0I/hDblz3R_Gek/s1600/WeeklyClaimsJuly15.jpg

shows the worse jobless rate was still ahead and even with the eventual reversal, weekly job losses are still historically high.

Even if the “stimulus” spending helped (which I doubt), than attributing any improvement to it is a classic “post hoc” error.

here you reveal your ideological blinders and/or BS. Stimulus spending will always help an economy. The money isn’t burned, it goes out as paychecks and transfer payments like UI.

Maybe it would have improved even more if taxes had been cut instead or maybe even if nothing had been done.

Unlikely. We are in a demand shock and supply-side measures will have little or no effect. The wealthy are content with the 3% nominal returns they are getting on their 10 year money, banks have a trillion of excess reserves, capacity utilization is still at historically low rates.

The present situation is still a broken economy.

The reasons the public is unhappy are simple:
– The Democrats passed a massive and scary Health bill which most Americans opposed and still oppose

Nice! The health reform stuff is only scary because it’s been portrayed so by the conservative media that dominates the discourse.

9 out of 10 Republicans are strongly opposed to the reform. This is sheer partisanship and not reason.

– The Democrats focused on this Health bill for most of a year, ignoring the economy and jobs issues which were of greatest concern

Above you said government interference can’t do anything and is worse than doing nothing. Now you say the public wants the government to interfere more than they did.

Your positions are incoherent. Either the public doesn’t know what’s best for it or what you think is good policy is wrong.

– Most Americans think Obama’s handling of the BP spill was slow and poorly managed

True as far as it goes but this is again media-driven and short on reason.

– Most Americans think the “stimulus” bill didn’t do much for the economy and was a waste of money.

Again, most americans wanted more government interference but most americans think stimulus was a waste of money.

What you’re really saying is most Americans are idiots.

– Americans think that their taxes are going up (for example the new charges under Obamacare and the expiration of the Bush tax cuts).

Most Americans have been mislead by what the health reform is. If people don’t want their insurance rates to go up to cover more people who need insurance, we are an evil people.

As for the expiration of the Bush tax cuts, so far the administration has proposed keeping them for the bottom 90% of people, the lower four quintiles by income.

– In general Americans view Obama and the Democratic Congress as out of control in terms of spending

Yet nobody can identify what government spending they would cut.

The Unemployment bill is a classic example of this. Republicans didn’t oppose it–they opposed enacting it without an offsetting budget item to account for the money.

This was just posturing to derail the Democratic agenda. Republicans have no problem adding a trillion to the deficit with the Iraq War, or the nine trillion of Medicare Part D. Few Republicans in the Senate now voted against Part D when it came from conference.

Democrats just rammed through the extra spending.

“Rammed through”. This is the democratic process. The nation elected historically large Democratic majorities in 2008.

And as a “solution” to the current unemployment crisis, it’s a band-aid at best. And it puts America even deeper in the deficit hole that Obama and Congress are busy digging.

I agree that the UI extensions are poor policy, we should tie the benefits to something more than “good luck in your job search” — either actual job training or actual government job creation.

As for the deficit, f— the deficit. It sure didn’t matter 2002-2006.

The economy won’t improve until Businesses are confident.

LOL. Businesses have to sell to the American consumer. And guess who’s getting totally f—ed from here on out? Not the Businessman, the consumer.

The problem isn’t that Obama isn’t getting things passed. The problem is that Americans don’t like the new laws that he’s passing. I think Americans know *exactly* what they’re doing. The only issue is that the media, the President, the Democrats in Congress and liberal commentators don’t like it.

Well, that’s certainly the Conservative take on the situation. Problem is, your conservative policies are 99% responsible for where we are today.

This laissez faire BS ain’t going to fly when 90% of the population has just 30% of the wealth (and the top 1% has nearly 40% and growing).

This is the core problem. Everything else is diversion.

@Geoff

I’m sorry, 900 BILLION dollars was just too little money? That’s about 1/33rd of the GDP for the ENTIRE PLANET.

The $900B wasn’t dumped into the economy all at once. Only $400B has been even allocated so far. It’s a $200B/yr thing.

This is less than the stimulus of the Bush tax cuts (which have been ramping up over 9 years and have accumulated around $2T of stimulus effect thus far), and really pales in comparison to the 2003-2007 stimulus of the housing bubble, which at its peak (2005-2006) was approaching ONE TRILLION dollars of free money into the system, for a total stimulative effect of well over FOUR TRILLION.

Here’s a pretty chart so you can see what happened visually:

http://research.stlouisfed.org/fred2/series/CMDEBT

I’ve taken this chart and added the effects of the Bush tax cuts and the Obama stimulus:

http://imgur.com/DSeHM.png

Seeing the little green box (which is actually over-stating the impact of stimulative spending since it should also be an expanding wedge like the other shaded areas) should be useful for you to understand the relative effects of what’s been going on since 2001).

If you think that Republicans are owned by Corporations and Democrats “stand up for the little guy” than you are a gullible fool.

You’re getting incoherent again. Above you say that businesses are uneasy with Democratic agenda, now the Democrats are more in the corporations pocket. You make no sense, really.

(I have a comment stuck in moderation again, grr)

OK, I’ve edited the chart that is part of my comment in moderation.

http://imgur.com/hAmYJ.png

This is in response to Geoff’s point:

I’m sorry, 900 BILLION dollars was just too little money? That’s about 1/33rd of the GDP for the ENTIRE PLANET.

I think this chart I’ve made is critically important for understanding what the Bush Economy really was, and wasn’t, and the scale of the 2009 stimulus, or lack thereof, compared to the housing credit effect we collectively enjoyed 2003-2007.

This chart shows the quarterly equity borrowing doubling 2001-2003 and doubling again 2004-2007, only to crash to nothing in 2008.

That was the true stimulus of the previous decade, and why things are so bad now.

While the situation isn’t exactly analogous to the Japan Bubble, it’s very similar as Japanese corporations in the late 80s were borrowing against their real estate holdings either to buy more real estate or make questionable investments (ie in their stock market, which has been tumbling since 1989).

Unfortunately, the “This chart” link’s image in my above has gone MIA. I’ve rehosted the image here:

http://imgur.com/YjGT8.jpg

This shows the quarterly cash-out effect of the housing boom and is critical to understand the demand-crash of the current economy.

The bulk of the 2001-2003 tax cut program went to the top 10%, who either banked it in treasuries or found other private equity/hedge fund investments for the windfall.

Clearly the tax cuts didn’t go into productive enterprise, since everything fell apart well before the 2008 election.

The lower 4 quintiles didn’t get much out of the Bush tax cuts, but they were able to ride the real estate boom that occurred 2002-2006, and they largely rode this boom through borrowing against the rising valuation of their house.

This was not actual wealth accretion, since valuation is not wealth. Thesevaluation increases was not driven by wage increases, but rather declining interest rates and the dramatic increase of suicide lending as offered by WaMu, IndyMac, Countrywide, Wachovia, and hundreds of retail Alt-A lenders that are no longer with us now.

But while the party lasted, things were pretty good. According to this chart the debt stimulus was over $100B for 12 quarters, or $400B over three years.

$400B is a LOT of money. At $40,000 per McJob, that’s TEN MILLION jobs being supported by nothing but unsustainable housing debt.

Plus all this housing sector circle-jerkery added more billions for paper-pushing jobs for mortgage brokers, real estate agents etc, plus more billions for all the construction sector jobs supply the construction and rehab.

But housing is NOT a productive sector of the economy. In any mature market (where demand and supply are in rough balance) housing is nearly entirely CONSUMPTION, with no actual capital addition. This was hundreds of billions of simple malinvestment.

But the bottom line is the debt party began to close down in 2007 and was stopped cold in 2008. This was a DEMAND shock to the economy and no amount of voodoo economics was going to fix the screwed situation that the middle class of America was now in.

Frankly, I don’t really have any good ideas what to do from here. Everything we need to do to reverse the past 25 years of mistakes — single payer health system, alternative energy infrastructure, domestic factory jobs — will only help us 5-10 years down the road.

This decade offers nothing but pain, much like the 1990s in Japan, which I also experienced.

A heated debate with strongly-presently arguments on both sides!

I get the impression that our friend Geoff is quite well-educated and intelligent. He’s obviously NOT a blow-hard right wing nut, like the FOX network junkies who jump into the forum, but maybe a little mis-informed. I respect his views and am genuinely interested in hearing what he has to say.

However, when his argument’s logic breaks down, he follows a typical Republican tactic of attacking the opponent’s personality, rather than his issues/ideas.

“If you think that Republicans are owned by Corporations and Democrats “stand up for the little guy” than you are a gullible fool.”

This kind of speech is really common among talk show hosts such as Michael Savage, Rush Limbaugh and another guy whose name escapes me.

Geoff is talking out of both sides of his mouth here; In other words, Dems are both trying to reform the Health Care industry and are also puppets of that industry. The truth is, in spite of those enormous contributions, most Dems are not afraid to bite the hand that feeds them, even if it costs them their seats in the next election. That takes courage, integrity, and a vision that the GOP lacks.

Although I think we can all agree that private donations are wildly out of control on both sides of the aisle,

[www.opensecrets.org/bigpicture/topcontribs.php?cycle=2008&Bkdn=DemRep]

it is mostly Labor Unions who back the Dems, while banks, oil companies, and health orgs are the GOP’s best friends–hardly representative of “the little guy” as Geoff suggested.

Geoff again says,

“Take a look at the actual corporate contributions to both parties and then get back to me as to who is in whose pocket.”

Keep in mind the ratio of Dems to GOP enters into the equation; Dems get more contributions simply because there are MORE of them during this election cycle. I still have waning hope that Obama will take up campaign contribution reform. [Am I too optimistic?]

One last point Geoff raises,

“Obama had two years to fix [the economy] and he didn’t.” (an is still trying to pin the blame on Bush to boot.)”

Here I must insist that the Obama adm is more of a “Clean-Up Crew” than a true presidency. When the damage caused by the previous adm is so extensive and irreparable, it is nothing short of a miracle that he has got anything done at all. We also need to bear in mind that our economy is partly based on global trends which neither Bush nor Obama can control. The difference is that only one of these men took it seriously enough to reverse course and steer this ship in the opposite direction.

@kensense

The truth is, in spite of those enormous contributions, most Dems are not afraid to bite the hand that feeds them, even if it costs them their seats in the next election

I disagree with this. Retaining one’s seat is priority #1 for anyone in power. The 1994 Contract With America included term limits, but that was of course and empty promise.

The difference is that only one of these men took it seriously enough to reverse course and steer this ship in the opposite direction

The core problem is the difference in vision and goals.

For Bush: Substituting standardized tests for actual education will reform the system. Banning most areas of stem cell research protected the inviolate sanctity of life. Tax cuts were virtuous, returning government overtaxation to the most productive Americans. Eliminating traditional lending barriers to home debtorship was a win-win. Taking out Saddam was a slam-dunk no-brainer. Giving away $9T to pharmaceutical companies was a great way to help seniors with their unaffordable meds.

This is all pure BS but the problem is 30-40% of this country actually believes this stuff.

This is the conservative/progressive divide. We are working at cross purposes, and we as a nation are pretty much screwed thereby.

There are a lot of interesting issues being raised here, but I’m still not convinced.

First, the issue isn’t whether the President should have done nothing. The issue is whether a Reagan-style fix (lower taxes, deregulation) would have stimulated the economy more than a Japanese/Obama-style fix (massive new regulation, huge increase in Government spending, same or increased taxes). I think the results from both having been tried speak for themselves. The Obama “stimulus” has certainly created some road-work jobs. But it hasn’t encouraged any expansion of the private economy in general. In fact, new regulations and costs are discouraging businesses from hiring and expanding. This is also what happened in Japan when it was tried. Anyway, regardless of what Obama inherited (and he did *ask* for the job), it’s been his responsibility and under his control for quite a while. Continuing to use Bush as an excuse is just plain embarassing. The President showed have lowered taxes and given businesses real incentives to hire and expand. You can’t demonize businesses and also rely on them to hire your voters and fix your economy.

As for Bush screwing things up, he had lots of help. Arguably the tipping point was the relaxation of Mortgage standards which resulted in large numbers of bad mortgage loans. And that was encouraged by the Clinton administration, by Chris Dodd and Barney Frank and by Fannie Mae and Freddie Mac (the mortgage backing agencies). Bush actually tried to rein in these agencies during his term and was rebuffed by Frank. So when many of these mortgages turned bad and the securities backed by them failed as well, the blame goes at least equally to the Democrats.

As for corporate contributions, Democrats get buckets of money from oil companies, investment banks and other large corporations. Ironically, Wall Street Banks contribute far more to Democrats than they do to Republicans. And, no, I don’t know why. As was pointed out Democrats also benefit from big Labor and many well-known PACs and lobbying organizations. And they usually all get their money’s worth, in my opinion. As for my “fool” comment, no offense was intended. But buying the party line that they “stand up for the little guys” is ridiculous when their corporate contributors are documented for all to see.

As for Obamacare, claims that it would save money were mostly based on accounting tricks and were later retracted by the CBO in any case. Experience with similar plans in Massachusetts has shown them to be a money disaster. Some organizations (such as the American Chamber of Congress) which initially supported the legislation, now strongly oppose it as passed. And the Republican alternatives involved deregulating the system (for example opening insurance plans up for inter-state competition). Generally, increased competition in a free market reduces prices. Unfortunately, instead of a free market, Obamacare went for a Soviet-style planned economy of regulated plans and price levels. As for it being unpopular, that’s what the opinion polls say. In fact, it’s more unpopular now than when it was passed. The more people learn about it, the less they like it.

It’s true that the Democrats got majorities everywhere in 2008. It looks like they lose them all in 2010. And when a bill passes on a totally partisan vote, it’s fair to say that it’s been “rammed through”. As someone who values the democratic process, what do you think of how the Health care bill–major legislation affecting one-sixth of the US economy–was passed? Without a conference? Without the text even being made fully available? Without a final Senate vote? Without *any* Republican support? With the majority of US voters opposed to it? I think “rammed through” is a very fair statement.

Really, it all comes down to philosophy. if you think that more regulation, more Government control and higher levels of Government spending are helpful, than Obama is your man. I think all of these things are anchors on the economy and I think the present state of the economy after two years of Obama’s “help” is proof.

The issue is whether a Reagan-style fix (lower taxes, deregulation) would have stimulated the economy more than a Japanese/Obama-style fix (massive new regulation, huge increase in Government spending, same or increased taxes)

We have not begun to follow in the Japanese fashion with its 200% of GDP national debt.

Japan has high internal savings but the problem is it’s all in government bonds, ie a wash.

Why do you think lower taxes will fix anything? They didn’t work 2001-2009, where private employment was LOWER on Jan 1, 2009 than eight years prior.

As for your regulation rant, it was DE-regulation that caused a lot of the financial catastrophe 2003-2006. Eg. these guys:

http://dorkmonger.blogspot.com/2008/11/cutting-red-tape.html

and the laissez faire Republicans gave the housing and financial sectors 2003-2006. I don’t know if the regulations signed into law today are any good, but I DO know that Reagan-style deregulation is a complete and total failure.

You might remember the S&L crisis, which was a direct result of Reaganism’s antipathy toward government oversight of bidness.

But it hasn’t encouraged any expansion of the private economy in general. In fact, new regulations and costs are discouraging businesses from hiring and expanding.

Just because you can retype BS doesn’t make it any less unsupported. What is discouraging businesses from hiring and expanding is the RECESSION. We’ve got too much capacity as it is.

http://research.stlouisfed.org/fred2/series/TCU

we need less capacity, not more.

Continuing to use Bush as an excuse is just plain embarassing.

You can blow your conservative talking points and framing out your ass. Come to us with facts, not butt-hurt.

The national debt on Jan 31, 2009 was $10.6T, compared to $9.2T a year prior. The reason we blame Bush is because the Bush Administration is the one who screwed up everything.

Actually, I don’t blame Bush at all. I blame the American people for voting in this ignoramus and his neocon adventurists.

Arguably the tipping point was the relaxation of Mortgage standards which resulted in large numbers of bad mortgage loans. And that was encouraged by the Clinton administration, by Chris Dodd and Barney Frank and by Fannie Mae and Freddie Mac (the mortgage backing agencies). Bush actually tried to rein in these agencies during his term and was rebuffed by Frank

Your understanding of the situation is completely flawed. While Clinton and the GSEs did get the ball rolling in this area, it was Bush’s team that opened the floodgates of crappy lending. While the GSEs are toast now, the larger lending industry was the one to really engage in the suicidal lending practices 2002-2007. This extended to Wall Street who packaged the derivatives that funded the wholesale market.

While the following site is odious in its overt racism, the facts as marshaled by the poster are pretty good AFAICT.

http://www.vdare.com/sailer/080928_rove.htm

Some organizations (such as the American Chamber of Congress) which initially supported the legislation, now strongly oppose it as passed

The US Chamber of Congress is just a Republican front group at this point.

http://www.sourcewatch.org/index.php?title=U.S._Chamber_of_Commerce

Unfortunately, instead of a free market, Obamacare went for a Soviet-style planned economy of regulated plans and price levels.

Soviet style? I could only wish (you can knock the Soviets all you want but at least they had a solid health care system). The Obama reforms are incredibly mild compared to the VERY successful Canadian, French, German, Scandinavian, and Japanese quasi-nationalized models.

They are necessary first steps. They are pretty much what the Republicans were pushing in opposition to HillaryCare, and what the Heritage Foundation supported.

The core problem here is that 40% of this country is reflexively opposing anything the progressives want to do.

It is madness.

if you think that more regulation, more Government control and higher levels of Government spending are helpful, than Obama is your man. I think all of these things are anchors on the economy and I think the present state of the economy after two years of Obama’s “help” is proof.

You are immune to reason apparently, substituting rightwing talking points for anything resembling facts or reason.

Here’s the deal. Reagan-Bush cut taxes and all we got was a doubled national debt and a recession that lasted the first half of the 90s. Then Clinton and the Democrats RAISED taxes in 1993 and 7 years later the government was in the black (partially thanks to the Republicans who controlled Congress from 1995). Then the Republicans abandoned their spending probity when one of their guys got the White House, and two trillion of tax cuts somehow gave us a FOUR POINT TWO trillion increase national debt.

Conservative policies resulted in across-the-board ruin by 2008. This is undeniable, yet people like you construct alternative realities to support your position.

re: “As for your regulation rant” above, apologies. Got carried away there.

Thing is, the American economy doesn’t need “stimulus”, it needs complete restructuring, a la Gorbachev’s Perestroika.

Conservatives don’t have any solutions in this area because you don’t have a correct model of how the world works, or worse, your preferred “solution” is just returning to some status quo ante that sucked for the majority of the people involved.

If the prior decade didn’t demonstrate to you the failure of the efficacy of your conservative ideology, I don’t really know what can, unless you consider the central trend of the rich getting richer and the rest of us getting increasingly screwed is a core value of your preferred system.

Other nations have solved parts of the puzzle better than us. My favorite real-world example is Norway. They seem to really have their act together economically and socially. We should try to be more like them and less like Mexico.

http://upload.wikimedia.org/wikipedia/commons/thumb/0/01/Gini_since_WWII.svg/1000px-Gini_since_WWII.svg.png

@Geoff K
Keynesian economics does work.

Exhibit 1: The U.S. in 1942-1945 – GNP increased 100%.

Exhibit 2: Japan 1932. Deficit stimulus combined with currency drop got Japan out of the depression in 1933. By 1929 industrial production was 100% higher than what it had been in 1929.

Exhibit 3: Korea 2009. Like Japan in 1929, Korea implemented a sophisticated stimulus, about 12% of GNP – for four years, plus enjoying a 25% drop in the value of their currency. Almost identical to Japan in the 1930s. In 2009, Korea, by some accounts attained .02% growth. In the first quarter of 2010 Korea enjoyed 7.8% growth.

You can read about the sophisticated policy considerations here:
http://www.koreatimes.co.kr/www/news/biz/2010/07/127_54316.html

You can read about the fist quarter growth here (and you will note that the tone of discussion in the Korean Press is that the Great Recession of 2008 is ancient history just like the implosion of 1997):
http://www.koreatimes.co.kr/www/news/biz/2010/05/123_64931.html

A 12% stimulus for the United States would have been about $1.7 trillion. The U.S. being the international currency of choice means that we can’t enjoy a 25% drop in the currency, meaning we would need a stimulus of about $2.3 trillion.

I’m not sure if I posted as much here, but I had been hoping for a $2.1 trillion stimulus and quoted that any stimulus less than a trillion is just not serious.

BTW our stimulus was only in the $700 billion range, watered down by anti-stimulus tax cuts. When you factor in the anti-stimulus actions of the states (cutting spending, slashing payrolls) the stimulus was zero sum (Per Ezra Kline of the Wash Post).

The thing about Korea is that their economic bureaucracy is expected to work in the public interest, as are corporations (they do after all, enjoy a concession from the public in the form of a limited liability, they there for owe a duty to not act outside the public interest – you will not find any blighted land near Korean heavy industry as they just don’t have the room).

The Republican party, by their own admission, is not interested in the public’s interest. They are only interested in preserving and advancing the interest of billionaires and near-billionaires, corporatists and banksters, at the expense of the broad general public. Quite frankly they’ve been amazingly successful at this. GNP has gone up 150% since 1972, yet median wages have remained the same. Wealth is now more concentrated than at any time in our history. That, by the way is why the economy and financial system suddenly collapsed – not enough demand, ergo the need for stimulus.

@Tim

That, by the way is why the economy and financial system suddenly collapsed – not enough demand, ergo the need for stimulus

Well, like I said above I kinda disagree with that. Just borrowing or printing money isn’t going to reset the system and put it on a sustainable path.

The core problem is that half the country is screwed economically. Too many people and not enough middle-class jobs, and in many places not enough jobs period.

This is due to our trade deficits with OPEC and China, the high cost of housing, and all the other active rentier elements of the economy (insurance, medical services).

All told, this is nation of 40M retired people, 80M young people, 20M young adults, 80M economically marginal people, 20M in gov’t or close proximity, and 30M rentiers of various stripes, and 30M doing actually all the work for an honest day’s pay.

WW2 worked due to reset nature it gave technology and labor.

Japan’s Keynesian jobs program has been marginal and I’m beginning to wonder if their national economy is any better than the US’s.

It all comes down toe wealth production vs. wealth consumption. 200M people in the US really don’t have much access to the former any more. Ag is about 1% of the workforce and manufacturing is something the Chinese do for us. Take out the $5T or so of government spending and the private economy would be exposed for the joke that it is.

Theoretically (and naively), $5T/yr @ $50K/job is 100 MILLION jobs. (Actual government spending is over $6T this year btw, but I think some of that is double-counted).

I wish I were as astute in Economics as some posters. Then I could analyze these problems to better find some workable solutions.

I agree with Geoff that the effects of stimulus have nearly fizzled out. (Yes, I understand only half of it has been implemented so far). But I don’t agree that doing nothing would have been a better solution. Reviving the banking industry was a ‘necessary evil’ to keep the nose-diving US economy afloat. It seems the stimulus has had only a temporary jolt on the economy, when a stronger long-term fix was called for.

I also admit that no president can take complete credit for his economy, whether good or bad. No one in the US can control what China/India are doing to develop their GNP, for instance. So it’s not fair to blame all on W [or Obama], but at the very least the president should take responsibility for how his own policies shape the vision he had for the nation. Most posters here strongly feel that W had no vision, and no inclination for solving an economic crisis. Instead he had a talent for ignoring any information that refuted his ideological mindset, firing all dissident voices and keeping his own wealthy and happy. Eight years of that “Old Boy” culture has clearly had a negative impact on us financially.

Moreover, I am reluctant to go back to the Reganomics days where money that was supposed to “trickle down” didn’t.

The solutions that I see presented from the Right are to loosen govt regulations so that big business can make hiring new workers profitable. To those of us on the Left, profits in some industries are already hideously out of proportion with the rest of the economy. This *is* a direct result of Right-wing govt policies [and yes, a result of excessive lobbying on both sides]. The old policies of letting corporations run rampant are no longer working, and are not in-line with present adm goals. In short, many of us feel it is time for corporations making enormous profits to give something back to those who are out of work. The trick is to do this without harming small businesses. From what I have seen so far, that is a big priority for the Obama adm.