So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year’s fourth quarter.
What is new is the unveiling of Mr. Obama’s agenda and his approach to governance. Every new President has a finite stock of capital — financial and political — to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his “stimulus” spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.
His Treasury has been making a similar mistake with its financial bailout plans. The banking system needs to work through its losses, and one necessary use of public capital is to assist in burning down those bad assets as fast as possible. Yet most of Team Obama’s ministrations so far have gone toward triage and life support, rather than repair and recovery.
AIG yesterday received its fourth “rescue,” including $70 billion in Troubled Asset Relief Program cash, without any clear business direction. (See here.) Citigroup’s restructuring last week added not a dollar of new capital, and also no clear direction. Perhaps the imminent Treasury “stress tests” will clear the decks, but until they do the banks are all living in fear of becoming the next AIG. All of this squanders public money that could better go toward burning down bank debt.
The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they’re no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.
Meanwhile, Congress demands more bank lending even as it assails lenders and threatens to let judges rewrite mortgage contracts. The powers in Congress — unrebuked by Mr. Obama — are ridiculing and punishing the very capitalists who are essential to a sustainable recovery. The result has been a capital strike, and the return of the fear from last year that we could face a far deeper downturn. This is no way to nurture a wounded economy back to health.
h/t Gerry G
Meanwhile, via Jennifer Rubin, David Brooks: Oops! My Bad!
It’s not quite LBJ losing Walter Cronkite on the Vietnam War, but the president has lost David Brooks:
Those of us who consider ourselves moderates — moderate-conservative, in my case — are forced to confront the reality that Barack Obama is not who we thought he was. His words are responsible; his character is inspiring. But his actions betray a transformational liberalism that should put every centrist on notice. As Clive Crook, an Obama admirer, wrote in The Financial Times, the Obama budget “contains no trace of compromise. It makes no gesture, however small, however costless to its larger agenda, of a bipartisan approach to the great questions it addresses. It is a liberal’s dream of a new New Deal.â€
Well, well. First Chris Buckley and now Brooks. Usually it takes more than a month for presidents to disappoint those they have bamboozled during the campaign. But, as Brooks points out, Obama threw caution to the winds when he unveiled his monstrous budget:
There is, entailed in it, a promiscuous unwillingness to set priorities and accept trade-offs. There is evidence of a party swept up in its own revolutionary fervor — caught up in the self-flattering belief that history has called upon it to solve all problems at once.
“A Moderate Manifuckinfesto”? You should be giving us sackcloth and ashes.
Money quote:
Moderates now find themselves betwixt and between. On the left, there is a president who appears to be, as Crook says, “a conviction politician, a bold progressive liberal.†On the right, there are the Rush Limbaugh brigades. The only thing more scary than Obama’s experiment is the thought that it might fail and the political power will swing over to a Republican Party that is currently unfit to wield it.
I believe this is what grief counselors call “bargaining.”
If it’s any comfort, Dave, you’re confirming that you are what we thought you were. Which makes us right twice.
I they would come crawling back – and I hope the door hits them in the teeth like a Louisville Slugger.
We tried to tell them. But no, we weren’t nuanced enough. We were wielding pitchforks, instead of the Georgetown-approved cocktails and an Olympian sense of superiority to the bitter clingers. We didn’t get Obama’s fabulous temperament and incomparable intellect.
Silly us.
By definition, however, I do not think a Conservative can do anything but conserve what time has proven to be sound. Even in a complicated world, only a few solid things are necessary for success. To label oneself as a moderate-conservative is to say– what, exactly? Which sound principle are you negating by saying you’re a moderate?
It’s such bullshit manipulation by the MSM over the years that the word Conservative has been pejorated out of its meaning.
I think he means to say he’s a Leftist Republican. No sense in calling them RINOs anymore.
Brandene and me is a coupla them inbredded moh-rons but we-uns cud tayull that there Barry Obammer wuz a fake who was jus funnin bout not bein a radikal. How come all them smert fellers done missed that? Too bizzy bein snobs about them Palins, I reckin.
Even Glenn Greenwald is going wobbly.
I suspect Andrew Sullivan will go to the bunker with Obama, poisoning the beagles to be with der Einen.
“Nehmen Sie die große Lüge, die es einfach, es hier, und schließlich werden sie glauben”
There is nothing either responsible nor inspiring about a leader who lies with nearly every word he speaks, who hides his belief in nearly everything he does. That Brooks could not see this manifested twelve months ago astounds me.
So Brooks admits he was duped by ObaMao – a man who’s transparency dwarfs any other quality he may possess – yet still thinks himself qualified to judge who is fit to wield power?
Step aside you twit.
Brooks wanted to hang with the “cool” clique. I think he’ll find criticizing ☻! won’t get him the acceptance that it did with Bush. Funny that!
So Gleens isn’t a clueless partisan after all, he is just clueless.
Brooks lives in the coco puff world of the Gray Lady. I am more surprised he is starting to figure things out already. Nevertheless, he still has the morals of an Albert Speer.
D’Oh! Godwin’s Law Validated Again!
Geez, I sent my “Republican brother who voted for Obama” the article and his response is classic:
Wow, denial writ large.
My response:
I added that yes, I’m still pissed that the Redumblicans nominated John McCain, an admirable man who had no coherent set of political principles.
WELCOME TO SWEDEN, BITCHES!
“It is a liberal’s dream of a new New Deal.”
Welcome to the Obama Permanent Crisis.
Rather have Rush Limbaugh as what? I didn’t realize he was running for anything.
Welcome to my world, Pablo.
I wonder if the left realizes that all of the attention and attacks actually helps someone like Rush? Attention, controversy, screaming fits by White House press secretaries and other media people – its going to drive Rush’s ratings even higher.
What fools these Democrats be.
Well, we told them so. Suckers.
Buyer’s remorse is a bitch, ain’t it?
[…] few quick thoughts as a follow-up to Dan’s post on the ever wrong — yet still ever presumptuous — David Brooks, who is just now […]
I think that is by definition exactly where they always are.
During the campaign Obama challenged the “moderate-conservatives”, “Who are you going to believe, me or your lying eyes”. They chose to be the meek little abused spouse and defend their bully of a husband from those trying to bring his abuse to light. He’s a “good man” they cried. They bought the kool-aid, now they get to drink the poison concealed within, knowingly, and that is disconcerting to them. The knowing, not the drinking.
“his character is inspiring”
What a cocksucker. Of the two candidates, one actually had character and virtue, and Dave chose to fellate the other one.
And what kind of “character” does a man have, Dave, when you have to presume that he’s lying about what he intends to do when in office in order to find him an acceptable candidate? Fuck David Brooks.
21:
No thanks. Even if I DID swing that way (NTTAWWT), he seems utterly inferior as a human being, much less as a lover.
…Not that I would know anything about that last part.
Can we just forget we had this conversation?
Let’s compromise and make him one of Barney Frank’s “rough boys.” Barney does not strike me as a gentle and considerate lover.
I might take Brooks’ call for moderates to rise up if he didn’t sound like he just come out of the Matrix…
“Why do my muscles hurt?”
“You’re never used them.”
Or came. Like I just did.
David Brooks is a complete fool.
Oh, and for a good look at how fucked we truly are, watch this
Conservatives are unfit to wield power? What sort of a mindless dipshit writes such drivel? The whole point of being a conservative is to see government do the opposite of “wield power”.
What a worthless fuckstick.