Tuesday, August 30, 2011

New CEA head and more...

Lots of criticism over the new Obama head of the council of economic advisers (CEA). People say he is too far to the left...

so did you expect Obama to appoint a Republican's economist to the post?

We have a BIG budget problem nothing should be off the table- no not even a national sales tax which Alan Krueger supports (a tax, by the way, that Democrats hate, Republicans despise and State Governors (and many mayors) abhor-all for different reasons. To Democrats the tax is too regressive, to Republicans it is too powerful, to Governors and mayors, sales taxes have been their exclusive province for 'fund raising')...

Cutting entitlements is 'job one' to get the deficits in line. But not job one through 'n.' All this Republican whining about taxes is misplaced. Tax reform and more taxes are almost surely part of a real workable solution. But enlightened tax reform, not vicious now-you-are-going-to-get-yours tax reform. America does not need class (or classless) warfare, Everyone should be paying taxes, everyone should pay their 'fair share.' The tax code already is progressive. suck it up and write the check but pare the obligation down to a workable profile that is American in nature. We are not the social welfare economy that Europe has become and is struggling to maintain.

Europe is no role-model for American

There is all too much spin doctoring about our problems and our dilemma and not enough willingness to take the bull by the tail and look the situation square in the err...'eye' and deal with it.

Deficits did not spring fully born out of the head of Obama as in some tale of Greek mythology. 'W' -remember him? ran TWO unfunded wars (cha-ching!) added a large drug benefit to medicare (Cha-ching!) and added a new cabinet post, Homeland Security (Cha-ching!). He handed over to the O-man an economy that was losing jobs at a pace of nearly 1-million PER MONTH ( Kur-Plunk!) in the early months of his nascent Presidency. The economy was not just weak, it was spiraling out of control. (here take the wheel I'm outta here....) While I do not give Obama good marks for his fiscal plans (or results!) I think we need to be careful where we put the blame and to whom we ascribe the bulge in the deficits. Hey is that a big deficit in your pants or are you just happy to see me? Let me be clear. Deficits emerge in response to something-something done or not done. They do not spring forth out of nowhere. The Obama deficits merged the context of great stress on the economy.

The Bush contributions to the deficit were all policy-induced and not executed in the midst of a crisis. His famed tax cuts propelled the economy to nowhere but are staunchly defended by the faithful. Choose the altar where you plan to worship carefully...Bush's tax cuts based on results were no success story. Still, this is no defense of Obama who, based on his current body of work, does not deserve reelection. (Has any Nobel Prize winner ever failed to be elected the very next time he faced the public?)

Only look to Europe to see what I call the quadriplegic strategy: Cutting and cutting will not really get you anywhere but stuck some place from which you cannot move. It's medicine is slow-acting. It is structural not counter-cyclical. We do not need to shrink government to free up up resources for the private sector: what to you call 9% unemployment if not free resources? We need enlightened minds in both parties and instead we have friggin ideologues ON BOTH SIDES OF THE AISLE.

We need to focus not on policies that will add former government workers to the ranks of the unemployed but on policies that will spur growth, add to output and add to job rolls. We do need hard core nonthinking redistribution plans from the Democrats or shrink-o-nomics from the Republicans.

So, here is an appeal to the religious right: God help us.

1 comment:


advisors of all sorts can make no better judgements on things than the common man on the street.