Belmont Club

The Obama Economy

This semi-opinion piece from the AP is to my mind, less about the economy than it is about the MSM’s changing view of Obama’s economy. The gist of it is that Obama’s ability to pin the current woes on his predecessor declines with each passing day. There’s a line that will be crossed at some time in the future. How far are we from it?

Although the administration likes to say it “inherited” the recession and trillion-dollar deficits, the economic wreckage has worsened on Obama’s still-young watch.

Every day, the economy is becoming more and more an Obama economy.

More than 4 million jobs have been lost since the recession began in December 2007 — roughly half in the past three months.

Stocks have tumbled to levels not seen since 1997. They are down more than 50 percent from their 2007 highs and 20 percent since Obama’s inauguration. …

And that’s just for openers. Here’s a line which encapsulates an argument I’ve been consistently making. Obama has sold the country a comprehensive solution tomorrow whose efficacy cannot be verified today. He’s promised that someday his stimulus package will lift us into the broad uplands. But today, We Dine In Hell.

“You created a situation where you cannot be wrong,” the chairman of the Senate Finance Committee, Montana Democrat Max Baucus, told Geithner last week.

But what if you are?

It has been argued that the prospect of being hanged clarifies the mind wonderfully. It can also make people drop their partisan preferences and more readily face facts.  The Moderate Voice is not a right wing site by any measure. But now it is beginning to realize that the Democrats also played a leading role in creating the subprime mortgage mess. “This is a video from 2004 where Democrats seem to oppose and Republicans seem to favor stricter review and regulation of Fannie Mae and Freddie Mac. This is not to say that the Democrats did not favor stricter review or that the Republicans are innocent from blame and I do blame both sides for the mess. But for those who try to paint the other picture, the Democrats being those who fought for regulation against the GOP, it does change things a bit. It’s all in their own words, so watch it for yourself.” Why is this ancient history important? For one big reason: this means that many of the same people who were the cause of the problem have joined the ranks of the Saviors. Again:

“You created a situation where you cannot be wrong,” the chairman of the Senate Finance Committee, Montana Democrat Max Baucus, told Geithner last week.

But what if you are?

The NY Post reports that “On Wall Street, they’re call ing the Obama economic team “the gang that couldn’t shoot straight,” after Jimmy Breslin’s novel about a bunch of moronic mobsters.

The sad thing is, the “gang” took office with high hopes on Wall Street. Treasury Secretary Tim Geithner, the former New York Fed chief, was supposed to have the experience needed to handle the banking crisis. Larry Summers, the head of the president’s National Economic Council, was part of the brains behind the Clinton-era recovery.

And Paul Volcker, chairman of Obama’s Economic Recovery Advisory Board, helped save the free world back in the late 1970s and early ’80s as chairman of the Federal Reserve when he squeezed inflation out of the economy and (along with President Ronald Reagan) helped return us to prosperity.

… The disappointment on Geithner starts with the fact that, since taking the job at Treasury, he’s failed to articulate a way to bail out the imploding banking system – even though knowledge of the banking system’s ills was supposed to be his strong suit. Worse, the word is that Geithner is still having trouble putting together a senior staff so he can come up with a bailout plan.

Thanks to all the class warfare produced by his boss, I’m told, Geithner can’t find qualified people from Wall Street (the folks who know markets better than anyone else) to help solve the crisis. Instead, one saddened Obama supporter from Wall Street told me, “He’s looking at a combination of bureaucrats and academics for these jobs.”

Larry Summers? Everyone knows he’s smart, but the word from Wall Streeters who are trying to pass him ideas for solving the banking crisis is that his ego’s as large as his intellect. That is, they’re finding him impossible to deal with.

Perhaps the biggest disappointment is Volcker, a true American hero who as Fed chairman tamed the stagflation of the ’70s – but seems to be muzzled at a time when the country needs him most.

Volcker, possibly the world’s most experienced economist, is being treated like the crazy aunt in the attic. He’s around, wandering the halls – but no one in the administration seems to care what he thinks.

What if they don’t care? What do you think, Hugo?

Update: Plus, maybe the honeymoon is starting to end when Washington Post editorials start calling you “George W. Obama”. The writer, Jackson Diehl, is deputy editor of The Post’s editorial page.