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My mini epiphany
As anyone who has read my posts
over the last few months can testify, I have been notably
unenthusiastic and irritated by Obama worship. I have been called "Mr.
Wet Blanket", the "glass half empty" guy, and decorated with other much
less flattering labels that have been pinned on me as I tried to point
out how precarious were the foundations upon which this new church was
built. But today reading the news I had a little epiphany and suddenly
my heart melted and I was filled with warm compassion for the Obamite
devotees as they adored at The One's Lotus Feet.I was reading the blog of the prophetic professor Roubini, a voice that once cried out in the wilderness, preaching repentance and doom and who now is a talk show favorite. He is an enthusiastic fan of Obama's proposed economic team, but here is his take on the situation they will confront:
I have also to add that - as I argued in an interview with CNBC Monday morning - while I have the greatest respect for the new Obama economic team, they will inherit a huge economic and financial mess that will be extremely hard to fix even if they were to implement the most sound and consistent economic and financial policy package. This is going to be the worst US recession in decades as the strapped US consumer is now faltering. The recession train and the financial crisis train have left the station. What policy can do - at best - is to minimize the financial and economic losses and limit the extent and severity and length of the economic and financial crisis, not to prevent it. President Elect Obama and his top notch team will inherit two wars and the worst economic and financial crisis in decades. So expect very difficult times ahead for the economy and for financial markets regardless of the best effort of Obama's excellent economic team in trying to address these problems. Even a massive fiscal stimulus, a more rapid and coherent plan to recapitalize financial institutions and resolve the credit crunch, an aggressive plan to reduce the debt burden of insolvent household, and more aggressive and radical set of unorthodox monetary policies will not prevent a global stag-deflation in 2009 and possibly longer.Then seeking some relief from Roubini's prognosis, I opened the Washington Post and stumbled upon this column by Robert J. Samuelson:
What terrifies Americans is the prospect that the slump will become much worse than average -- and that the government has lost control of events. (...) Perhaps Barack Obama will change that, but so far, government officials, business leaders and economists seem overwhelmed. They're constantly playing catch-up and losing. Americans feel unprotected against accumulating misfortune. The hyper-anxiety is not irrational pessimism, though it may prove unfounded. Every major episode of this crisis -- from Bear Stearns's failure to General Motors' possible bankruptcy -- has come as a surprise. Similarly, the crisis's three main causes have repeatedly been underestimated: the burst housing "bubble"; fragile financial institutions; and a reversal of the "wealth effect." Of these, the last is least recognized.(...) But now the wealth effect is reversing. (...) Since September 2007, Americans' personal wealth has dropped about $9 trillion, says economist Nigel Gault of IHS Global Insight. (...) If the swing toward saving is too sharp, consumer spending wouldn't just weaken; it would collapse. (...) And these problems feed on each other. Lower consumer spending depresses profits and stock prices, which corrodes confidence, further dampens spending, raises unemployment and increases loan defaults. Credit card losses could be the next big blow to financial institutions.Yesterday I quoted Fareed Zakaria on the Chinese:
The case for a sizable economic "stimulus" package is that it would temporarily compensate for the erosion of consumer spending. But if the positive "wealth effect" is now giving way to a lasting negative or neutral "wealth effect" -- as people try to replenish savings and offset lost wealth -- then even a recovery would be sluggish. A new source of demand is needed to sustain faster growth. An obvious solution is for high-saving Asian countries, led by China, to consume and spend more so that their imports increase. Whether they have the political capacity to reduce their dependence on export-led growth is unclear.
In September, Beijing became America's largest foreign creditor, surpassing Japan, which no longer buys large amounts of American Treasury notes. In fact, though the Treasury Department does not keep records of American bondholders, it is virtually certain that, holding 10 percent of all U.S. public debt, the government of the People's Republic of China has become Washington's largest creditor, foreign or domestic. It is America's banker.To Zakaria I tacked on this jewel from the classic Chinese wiseguy's handbook, "The Thirty Six Strategies":
圍魏救趙All this flotsam and jetsam swirled around in my consciousness until suddenly the dam broke and compassion welled up in my flinty, shrunken heart. How could I laugh at something like William Greider wrote in The Nation:
Besiege Wèi to rescue Zhào (Thirty Six Strategies - 2)
When the enemy is too strong to be attacked directly, then attack something he holds dear. Know that he cannot be superior in all things. Somewhere there is a gap in the armor, a weakness that can be attacked instead.
His victory, it appears, was a triumph for the cautious center-right politics that has described the Democratic party for several decades. Those of us who expected more were duped, not so much by Obama but by our own wishful thinking.To criticize the Obamites suddenly seemed to my opened consciousness like making fun of a cancer patient that desperately clutches to his rosary beads between spasms.
The famous words of a great American echoed in my repentant brain:
"Basically, I'm for anything that gets you through the night - be it prayer, tranquilizers or a bottle of Jack Daniels."Or Barack Obama.... Amen.
http://seaton-newslinks.blogspot.com/
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We do face serious problems, but at least Obama seems interested in righting the ship, not just providing lifeboats for first class.
November 25, 2008 4:53 PM | Reply | Permalink
Hey Mr. Seaton, how did you manage to recommend your own self serving post 3 times? You must be a really smart guy. I can tell that you think you are!
November 25, 2008 5:03 PM | Reply | Permalink
ps - I looked at your blog, and it made me feel sticky.
November 25, 2008 5:32 PM | Reply | Permalink
Hey putty, how did you manage to lie about Seaton having recommended his post 3 times? What are you talking about? Are you so pissed off that you want people to think Seaton recommended his post 3 times even if it isn't true?
November 26, 2008 7:00 AM | Reply | Permalink
Mr. Seaton,
You're going to get acne and a hairy palm if you keep this up.
November 25, 2008 6:23 PM | Reply | Permalink
That 'blog' of yours (seaton-newslinks) looks more like a 'flog' - 2 themes being beaten 2 death:
1. I hate Obama
2. US is fucked
Had a vacation lately?
November 25, 2008 7:13 PM | Reply | Permalink
One of the things I like best about TPM is that it let's you practice venting in a sarcastic and totally inappropriate way, then through the magic of the delete key, practice tolerance...
I'm getting a lot of practice today...
November 25, 2008 7:28 PM | Reply | Permalink
One of the things I like best about TPM is that it let's you practice venting in a sarcastic and totally inappropriate way, then through the magic of the delete key, practice tolerance...
I'm getting a lot of practice today...
November 25, 2008 7:28 PM | Reply | Permalink
I stopped reading once I saw Obama pictured as a holy figure. I feel sorry for people like you.
November 25, 2008 8:24 PM | Reply | Permalink
For instant relief, please press:
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.+========+.
.+...RESET...+.
.+.BUTTON.+.
.+========+.
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November 25, 2008 8:38 PM | Reply | Permalink
As a newer observer of this individual's contributions here, I am often reminded of a saying I once heard while working in government: don't just come to the table with problems--come with solutions--that is, if you have a general expectation of being taken seriously.
I find the author of this submission consistently lacking in this approach.
November 25, 2008 9:03 PM | Reply | Permalink
A dissenting view: I don't like the sarcastic tone, but I did like David's marshalling of diverse sources to show what a jam we are in.
Rec'ed for that.
Some background, Roubini has been a doomsayer for a long time at least four years. If you adopt a consistent forecast and hold to it long enough, the market will eventually cross your forecast line as it moves about. Then you get your 15 minutes of fame. I find Roubini though very well informed, thoroughly deserves his fame, and his observations above are pretty good I think except the stagflation forecast...that assumes we will see central banks turn on the printing presses and I'm not sure that will happen on a wide scale...but I'm no economist, so what do I know. What's worse deflation to market zero or stagflation? Well there are worse fates than stagflation.
I don't subscribe to the theory that this event was triggered by the Chinese or even a Sino-Japanese economic coalition, it was just that the internal logic of a certain risk-assumption worldview played itself out to an end we should have foreseen.
Quinn asked me on another thread, well what can the government do? A very tough question and a third-rater amateur like me can't add much. We just can't print our way out of this. Moody's and S&P must be being restrained by armed agents from downgrading us already! Neither can we risk getting into further debt by other routes. Same reason. Government has to increase revenues and cut spending to sustain the bailout program and there really isn't much fat left to be trimmed. Peter Orszag is probably already working 7 days a week studying the numbers. Our biggest immediate savings would be cutting entitlements and heavily trimming defense. But there are costs and negative feedback loops on both of those options as well but cutting entitlements is probably the best way to go as much as I hate to say that, New Dealer that I am. I would say that restoring the 1960 era tax rates on the upper incomes would be a start that wouldn't have much effect on the demand side, no effect on the supply side and put a little more in the Treasury. Massive public works projects like those of the 1930's may help much for a variety of reasons I don't want to mention here.
The ur-problem that Obama's advisors face is that up until now, most salvage strategies would be premissed on a return to the status-quo-ante, at least monetarily. That is to say that after palliating measures and structural investment pressures (boomer retirement funds, overseas "safe haven" investing, etc.) the economy would snap back to something like before the crisis and the US dollar with it.
This situation is A FIRST, let me stress that, a first in our history. The dollar isn't going back to where it was. April will just confirm what we all know. Future strategies based on leveraging the strength of the dollar are not going to work for us as they always have before.
Is David right in his sarcasm turned to compassion? No, I don't think so. Obama is just about the perfect leader for this crisis and I really doubt we could have done better. If he can't see us through this, no one can.
November 25, 2008 10:09 PM | Reply | Permalink
Lux: You are one of the most even-tempered posters here. You can discuss personalities and not ideas. I acknowledge and applaud your ability not to get sucked into group think or clique behavior. You are truly an independent thinker. Despite your other comments on Fly's blog, you are the example for us all, Lux.
Side note: hope you saw my link to how to find the International Space Station overhead.
November 25, 2008 10:58 PM | Reply | Permalink
I wish I could edit my comments! The 2nd sentence is exactly backwards. Here is the correct way:
"You can discuss ideas and not personalities."
November 25, 2008 11:07 PM | Reply | Permalink
I knew what you meant. :)
My reply to your link question is on the other thread.
November 25, 2008 11:29 PM | Reply | Permalink
And I replied back to you. I'll keep an eye over there for another day or so, just in case.
November 25, 2008 11:46 PM | Reply | Permalink
Lux. I would ADORE the option of stagflation. Seriously. Compared to the other main option on offer, the idea that we'd have inflation steadily chewing up our debt, and a manageable amount of unemployment, well... when compared to deflation, that's a no brainer - 1970's suffering vs 30's.
And I keep telling David I like his links... but then he just always reaches the same conclusion, no matter what the stories say! I mean, Roubini could have DISAGREED with Obama's picks, and it would have been the same conclusion, right? If people didn't notice a wealth effect, then they'd be deluded. If China crashes, well, things are even worse for Obama. So no matter the link, the conclusion is always the same. Obama = Bad. Sigh... ;-)
November 26, 2008 12:59 AM | Reply | Permalink
First: the Chinese have done nothing to us, we have done it for ourselves... Reading, Lao Tse, Sun Tzu, Mao Tste Tung or even Bruce Lee you could see that being in position to let an opponent defeat himself to your advantage is the finest art of conflict.
And yes, Barack Obama is extraordinarily intelligent and almost "Chinese" himself in his ability to let opponents defeat themselves, and yes he probably is the best man to be president right now... but that probably wont make a bit of difference. It is the system and the ideology on which it rests that are in a blind alley. When the people of a huge and powerful country think that the solution to their problems is a leader, that makes me very nervous.
November 26, 2008 1:49 AM | Reply | Permalink
As you point out above, the cresting wave of the systemic tsunami is yet to hit the U.S. Having a leader who isn't counting strawberries while the storm begins is certainly a cause for celebration.
But the timing is wrong for the messianic role you project onto your imagined hordes of "Obama worshipers." In U.S. politics, the messenger is always the first one killed. Obama is more likely to be labeled the cause of the problem than the solution.
November 26, 2008 6:59 AM | Reply | Permalink
Continuing a little bit, that is what bothers me most. The United States is in a systemic breakdown and people think that Obama is going to fix it. It reminds me about how people in the West viewed Gorbachev before the USSR collapsed. Not Lincoln, not Gandhi, not FDR: Gorbachev. Gorbachev was and is a very decent and intelligent man who happened to be standing on the bridge when the Titanic went down.
November 26, 2008 2:05 AM | Reply | Permalink
I certainly agree that we're in for worldwide changes. I don't think anyone can "fix" it, but I think Obama has a handle on the depth of the problem.
November 26, 2008 6:26 AM | Reply | Permalink
Well, I think that Gorbachev also had a handle on the problem but was left standing with the handle in his hand, like a gag in a silent comedy.
November 26, 2008 6:39 AM | Reply | Permalink
So do recommend apathy, armed revolt or should we all just sit back and make wryly critical blog posts?
November 26, 2008 7:28 AM | Reply | Permalink
November 26, 2008 9:38 AM | Reply | Permalink
A while back, you mentioned the fellow that got dung for Xmas and thought there must be a pony. His cousin got all new toys for Xmas but cried because he knew they'd all be broken someday. Both were fools.
I prefer to think there is a realistic middle course between the blind optimism you associate with Obama and the abject pessimism you preach.
November 26, 2008 1:50 PM | Reply | Permalink
David,
As you may or may not know, I too have been seriously critical over the last year of what I termed "Obama Cultists." Thing is, I got over it. They really don't matter, to the extent that they still exist at all. And as Quinn said above, it's clear you'll never be happy. It will always be the same answer for you no matter the question. You're carrying a lot of baggage. Shake it off, man.
November 26, 2008 7:35 AM | Reply | Permalink
Loki,
Personally I am a very happy person. I have a good marriage, I love my work, I appear to be in good health. I live in the center of a vibrant city, in a nice flat, in a safe, multi-use neighborhood. I'm alright Jack.
Politically, however, I am feel like some Cassandra around here. I got into political analysis in a very roundabout way: by always being right, actually... I know it sounds horrible to say that, but that's how it happened, a little like "Good Will Hunting".
I see the people of the USA floating in some sort of fog heading for disaster and like in a nightmare there is no way I can communicate this effectively.
My problem is not with Obama himself (we will find out finally who he really is now) but with the idea that the problems that America has gotten itself and the world into can be solved by a leader... any leader. The "Obama/Valium effect" I call it.
November 26, 2008 11:50 AM | Reply | Permalink
No, David, your real problem is that your a the-patient-is-half-dead kind of guy, and instead of figuring out that his only shot is to do something, you stand around repeating that, and letting him bleed out.
Yes, times are tough. Do we have a model of what will get us out of this? Sure, FDR's early strategies to combat the depression were highly successful. And we need the kind of things done in this country that he did. Normal infrastructure, green infrastructure, green industry, green energy.
Stiffen your back and grow up. You remind me of someone who would lay in a puddle, face down and drowning, bitching about falling, instead of picking yourself up. Suit yourself, but could you leave us out of it?
November 26, 2008 8:50 AM | Reply | Permalink
I hate to be such a party pooper, but the only thing that FDR did that was successful in ending the depression was to declare war on Japan.
November 26, 2008 9:41 AM | Reply | Permalink
"I got into political analysis in a very roundabout way: by always being right, actually..."
Egomania, anyone?
"I see the people of the USA floating in some sort of fog heading for disaster and like in a nightmare there is no way I can communicate this effectively."
Yes, mighty seer, only you can reveal the truth unto us! I estimate your hat size to be equivalent to that of the Santa balloon in the Macy's parade.
November 26, 2008 12:37 PM | Reply | Permalink
I said>/i> it sounds terrible, but that's how it happened. If it's any comfort, "being right" is not nearly as lucrative as telling people what they want to hear.
November 26, 2008 1:57 PM | Reply | Permalink