Wednesday, February 18, 2009

Tired Old Solutions

Whose tired old solutions are we talking about here? Charles Gasparino, CNBC, NY Post:
But the consensus building on Wall Street is that this president doesn't look to be up to the job of fixing the economy.

Talk to any investor, and he'll tell you how Obama's plan offers up nothing more than tired solutions, pork-barrel spending that will do little to reverse the economy's woes - and may make a bad situation worse.

Accurate or not, that perception is growing among market professionals - and not just Wall Street's sizable contingent of conservatives, but also those who voted for him, Democrats and middle-of-the-road Republicans who believed he had the intelligence and the temperament to lead the country out of the crisis.
Trillions in pork, including $2 billion for ACORN, and for what?:
In a recent note to its clients, Strategas Research Group underscored Wall Street's anxiety over the massive spending and borrowing that many believe will crowd out private investment with high interest rates - all without doing much to boost the economy. It observed that the then-$820 billion in planned spending could've bought nearly 4 million homes at $200,000 a pop, or nearly 29 million cars at an average price of about $28,000 - or gone to send every American a check for nearly $2,700.
Instead we are on the hook for thousands and thousands in taxes for the foreseeable future. Are you tired yet?

More: Amity Shlaes, Bloomberg:
So, celebrating the $787 billion stimulus bill Obama signed yesterday depends on ramming through this version of history -- and dismissing dissent. That is what Obama did at a news conference when he said those who criticize FDR’s New Deal are “fighting battles that I thought were resolved a pretty long time ago.”

In fact, this battle is far from resolved. Economists are arguing more now about the quality of the Roosevelt programs than they were a decade or two ago. [snip]

FDR’s job results were, to put it politely, disturbing. Yes, there was an increase from the abominable lows of the early 1930s. Parks, roads, New York City’s Triborough Bridge -- many of these projects did, arguably, help our economy. But not always productively.

Bureau of Labor Statistics data show joblessness in the 1930s bumping around in the teens and moving back up toward 20 percent later that decade -- years after the New Dealers first spoke of “bold, persistent experimentation.” These numbers include long-term public-sector jobs (tax collector, school teacher) but not the short-term or part-time jobs generated by the New Deal’s alphabet agencies.

Some New Deal fans prefer to include even those make-work positions in their math. Even then, you find unemployment in the double digits most of the time.

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