March 22, 2009

"Unless and until Barack Obama addresses the full depth of Americans’ anger with his full arsenal of policy smarts and political gifts..."

"... his presidency and, worse, our economy will be paralyzed."

Frank Rich says Obama's "Katrina moment" is here.

60 comments:

campy said...

Sorry, Frank, the suit's empty.

molly said...

He needs to get his shit together and come up with a bank plan that isn't a complete disaster. And Axelrod claims not to see the AIG bailouts as a huge symbolic failure? Still, what can we expect when capitalists run the government?

The Crack Emcee said...

"...His full arsenal of policy smarts and political gifts..."

Where do people get this stuff from? Obama has no "arsenal" to pull from - they gave him a free ride. This is delusional thinking on clear display:

The very worst kind of crazy.

With so many people suffering from this madness, we're sitting ducks right now,...

rhhardin said...

He means kneecap breaking.

AJ Lynch said...

"full arsenal of policy smarts and political gifts".

Sounds like the script for a bad horror movie.....

"Come on Mr. President it's time to use that magical amulet".

Hahahaha.

fcai said...

He has his teleprompter locked and loaded.

Curtiss said...

Frank Rich seems to be confused about why Obama hasn't turned out to be the product that was advertised.

The product advertised by Frank Rich.

campy said...

C'mon, Frank, he's present. What more do you want?

downtownlad said...

His Presidency is 60 days old.

You guys need to chill.

downtownlad said...

And asof next week taxes will be lower under Obama than they ever were under Bush.

Balfegor said...

Where do people get this stuff from? Obama has no "arsenal" to pull from - they gave him a free ride.

I'm not sure I'd go that far, but I do think his political gifts are considerably more limited than his supporters think, and that his policy smarts are practically nonexistant -- he's never grappled with policy before, as far as I can tell, just dithered about on the sidelines of policy debates.

sg said...

I found interesting Rich's remarks about how Summers has "unclean hands," having been a key person responsible for the CDS instruments being unregulated.

This sounds about right:

"Another compelling question connects all of the above: why has there been so little transparency and so much evasiveness so far? The answer, I fear, is that too many of the administration’s officials are too marinated in the insiders’ culture to police it, reform it or own up to their own past complicity with it."

Lem said...

Why is Obama clinging to his policy smarts and political gifts?

AllenS said...

"And asof next week taxes will be lower under Obama than they ever were under Bush."

Is he lowering the tax rates, or lowering the federal withholding rates? If the second is true, aren't you just delaying paying your taxes until you file next April 15th?

Paul Zrimsek said...

Yeah, I'm pretty angry with Obama's policy smarts and political gifts too.

John Lynch said...

That's Rich.

John Lynch said...

Still, what can we expect when capitalists run the government?


Huh?

I see kleptocrats runnning the country. Maybe it's a sixth sense thing.

jdeeripper said...

As predicted many White liberals are beginning to have the same feelings about Barack Obama, Jr. that Stanley Ann Dunham had about Barack Obama, Sr. a year into the marriage.

The difference is this marriage has to last at least 4 years.

You were warned.

Romantic idealization and raging female hormones are tough to reason with.

downtownlad said...

He lowered taxes. $400 a year for individuals and $800 for married couples. And he wants to make it permanent.

Only applies to 95% of households, but taxes for the other 5% are the same. At least right now.

Michael S said...

"He lowered taxes. $400 a year for individuals and $800 for married couples. And he wants to make it permanent."

Citation, please.

Rather than cut and mail a bunch of stimulus checks as in the past, this "relief" comes in the form of an employer-facilitated reverse installment plan.

Any benefit at the federal level is being wiped out at the local levels as the states (and others) have to raise taxes and fees to overcome mounting deficits due in no small part to a drop in consumer spending.

"Making Work Pay" will put just a small dent in the higher income taxes (50% increase proposed) and fees that many Illinoisans will be soon be facing to overcome an $11 billion deficit.

We're not unique here, it is happening all across America.

While Bush's "profligate" spending earns him no praise here it pales in comparison to Obama's willingness to use the economic crisis to mortgage our children's futures for implementing his societal reengineering initiatives.

Smoke and mirrors.

AllenS said...

DTL, you didn't answer my question. Was there legislation passed reducing the tax rates. Is this taking place now, or at a later date? Obama has promised a lot of things, but has done very little of what he has promised.

John Lynch said...

The $13 less taken out of our paychecks pales in comparison to the 10% dilution to the value of our dollars due to printing an additional trillion. Every dollar you have, or earn, is now worth 10% less as of two weeks ago when the Fed began printing money to buy its own treasuries.

I don't know about you, but $13 dollars is insufficient recompense for 10% dilution of my paycheck. Maybe your math (or paycheck) works out differently.

BJM said...

Obama's fail moment came when he kept Geithner on. The administration's ability to convince those we need to purchase our paper lessens with each inept manuvuer by Obama, Geithner and the Congress.

No one in the financial markets believes that Treasury didn't know of the AIG bonuses until March. It takes months to prepare a 10-K. Are we to believe that as 80% shareholders in AIG our appointed and elected representatives didn't read the filing?

The Obama admin is sending another signal to the overseas markets that it incompetent at a time when we must sell a great deal of paper to keep our economy afloat. The deal will have to be sweetened with higher yields and that will be a disaster for all of us.

Unfortunately, his Katrina moment has yet to come.

EDH said...

Frank Rich offers a fair, if arguable, diagnosis.

Too bad his prescription is a placebo.

Fitgers said...

Obama is a 129 bowler in a professional league.

Trooper York said...

Obama was bought and paid for from the get go. He is the schill in the carney. He is simply the front man for the moneyed interests who have raped the Treasury. Again. He has glided through life voting present. What he and the liberal cabal in the main stream media don't realize is that now he actually has to make decisions. He actually has to choose between alternatives. And it goes on his permanent record. When the rubes wake up and realize that they have been scammed, he is going to left holding the bag.
It’s not going to be pretty.

Bruce Hayden said...

I found the article interesting. Rich seems to be throwing dirt, but trying as hard as he can to absolve the President along the way. How can this super competent and articulate person screw up so badly here? The answer that Rich refuses to entertain is that the President isn't really all that competent, brilliant, or competent, and, instead is very much over his head.

Something that he pointed out that I didn't know though was that some of the retention bonuses had gone to people in the business unit causing the problem who had left. Also, he pointed out some more Goldman problems and put Summers' involvement into question.

m00se said...

Soothsayer
Caesar!

CAESAR
Ha! who calls?

CASCA
Bid every noise be still: peace yet again!

CAESAR
Who is it in the press that calls on me?
I hear a tongue, shriller than all the music,
Cry 'Caesar!' Speak; Caesar is turn'd to hear.

Soothsayer
Beware the ides of March.

CAESAR
What man is that?

BRUTUS
A soothsayer bids you beware the ides of March.

CAESAR
Set him before me; let me see his face.

CASSIUS
Fellow, come from the throng; look upon Caesar.

CAESAR
What say'st thou to me now? speak once again.

Soothsayer
Beware the ides of March.

CAESAR
He is a dreamer; let us leave him: pass

TitusItIsABeautifulDay!!!! said...

I love Frank Rich.

BJM said...

Bruce, the point of the "retention" bonuses were not to retain the people for long term employment but to pay them to wind down their books.

Many closed out their book, were paid and left as agreed upon.

Had AIG not done this key employees would have fled six months ago without any means to unwind the damage. While it may gall us to pay these people to undo the damage they did, it was a prudent management call in the longer view of the balance sheet going forward.

The Congressional dog & pony show and populist howling for scalps will only create a brain drain from AIG and other bailout companies which will cost us more to either recruit replacements or in failures. Who would agree to go to work for AIG after the past week? This was stupidity on a level only attainable by a Congress who cannot manage it's own programs and budgets.

Joe said...

The truly obscene thing about the Presidential and Congressional fury about the AIG retention/bonus plan is that Congress passed bills with far more waste and Obama signed those bills. It goes without saying that this waste could have been eliminated without violating the constitution.

And, while the amount is not the same, Congress did nothing to stop their automatic pay raises and office budget increases. If Obama had any balls, he'd demand that Congress cut their pay to $1 a year until the recession ended and if Congress had balls, they'd pass a bill doing exactly that.

rhhardin said...

We don't have inflation yet. Printing money doesn't do it. The money has to buy goods and services, and it's not doing that.

The crunch comes when banks resume lending; the Fed needs to soak up that money very fast, which will probably cut off the recovery.

The reason it's a crunch it politically that will be pretty hard, though economically it's absolutely called for.

That's the inflation threat. That politics at that point the banks resume lending will keep the Fed from soaking up the money it's printed.

At the moment the printed money is all bank reserves, keeping them from being default risks to their counterparties, and onwards in domino fashion. It's keeping the financial system going.

PatCA said...

If spending us into oblivion is truly the answer, I wish O would send out someone credible to tell us why, convincingly.

O/w, he's just spending us into oblivion.

blake said...

Well, that was fast.

BJM said...

rh, agreed it is a necessary hedge bet.

However, how much liquidity will will come in from the sidelines now when investors such as China will surely demand higher returns for holding Treasury securities, which will put pressure on the govt. to increase the interest rates those securities pay. As those interest rates increase, they will put pressure on the interest rates that other borrowers pay.

Will the Fed's latest bubble then burst?

Bart Hall (Kansas, USA) said...

"Policy smarts and political gifts"??

The same forty-year old 1960s activist laundry list constitutes "policy smarts"?

Articulate use of a TelePromTer to mouth words written by others constitutes "political gifts"?

Is that why in just two months he has needed repeatedly to resort to demagoguery and Chicago street-thug tactics?

The man is articulate in presenting someone else's ideas. He's not even eloquent. Look up the difference.

I have also yet to see that the man has an intellect of any particular note. Certainly he falls far short of Bill Clinton in that regard and is deeply inferior to both Teddy Roosevelt and Thomas Jefferson.

There's just not all that much there, and it shows. Bullshit can get you to the top, but it can't keep you there.

bearbee said...

The truly obscene thing about the Presidential and Congressional fury about the AIG retention/bonus plan is that Congress passed bills with far more waste and Obama signed those bills.

AIG = tail wagging the dog.

However, how much liquidity will will come in from the sidelines now when investors such as China will surely demand higher returns for holding Treasury securities, which will put pressure on the govt. to increase the interest rates those securities pay.

Fed Monetized Debt When Foreign Debt Holders Stop Buying

The department of the treasury has the foreign bond holder information updated through January. There is a disturbing negative trend in the numbers, as shown below. I first wrote about the risks of decreasing purchases from foreign bond holders last month, and now it is apparent that those risks have materialized.

John Lynch said...

rhhardin,

From a monetary point of view, increasing the money supply without a corresponding increase in GDP is by definition a devaluation of our currency. That it is not immediately inflationary speaks more to our busted velocity of money, not the value.

The inflation against other currencies has already started, only partially offset by other currency's own increases in supply. For example the dollar vs. Euro changed 5% in one day last week.

There is no answer to the increase in M3 that doesn't eventually increase M1 as well, at which time either GDP jumps by ten percent (unlikely) or we have 10% inflation (or a combination such as 3% GDP growth and 7% inflation.)

Net, our holdings, or paychecks were hit with devaluation. We'll notice it in the coming months.

somefeller said...

Frank Rich suffers from the same problem that many, if not most, professional political commentators do. He assumes that because he and the people he hangs out with are obsessed with every detail of the Administration in power (no matter which), everyone else is. Sorry, but for him to compare problems in macroeconomic policymaking with the visceral impact of something like Katrina shows he is too far in the cocoon. And I'm saying that as no friend of Geithner and as a Democrat who thinks Obama needs to improve his game over how he's handled himself over the last couple of weeks.

BJM said...

Krugman's not happy either.

rhhardin said...

John Lynch

Money isn't wealth, and therefore doesn't dilute wealth.

It's a ticket in line to say what the US economy does next, presumably something for you.

The Fed regulates the number of tickets outstanding by printing new ones or soaking old ones up, so that the number of tickets asking the US economy to do something matches what the US economy is capable of doing at once.

If, as happens today, people are sitting on their tickets, the economy goes idle, and more tickets is the answer. You called this the busted velocity. Well that's the point.

The inflation threat happens when the Fed fails to extinguish the new tickets when people start using them again.

The foreign currency changes are speculation on the odds of the Fed doing this.

Money is not wealth. It acts like wealth to one person, but not to a nation. To the nation, it's just tickets to say what happens in the US economy next.

The US economy is the wealth.

John Lynch said...

It's a Katrina moment in the sense that Obama is being held responsible for something outside his control, and isn't acting the way we want him to act. There wasn't anything Bush could do to stop the hurricane, or divert it from the worst-run and corrupt city and state in the union.

Anything Obama actually does for the economy will take months or years to become clear to us. We simply don't know.

As a result, we're filling our time with what he's saying, which really doesn't matter. Rhetoric is empty. Either he made the right decision with the stimulus, or not, and that's it. Whether he says the right things doesn't change that.

Just as Bush didn't really have much say in how FEMA responded (the biggest problems were years in the making) Obama doesn't have much to do with the economy on a day to day basis.

I suppose we could have a President who says the right things to make us feel good but makes bad decisions. I'd rather have one that talks badly but does the right thing...

rhhardin said...

The Fed is buying long bonds to put money into the economy. It can't buy short bonds any longer because their interest rate is already zero.

This used to be called a deflation trap, but the Fed is simply moving to buyng other things up.

The Chinese have not much to say about anything. They're holding dollars and the only thing you can do with dollars on God's green earth is spend it in the US economy or invest it in the US economy.

Dollars are tickets that tell the US economy what to do next, not any other economy. They have to return home or in effect they disappear from circulation, as if they'd been burned up.

John Stodder said...

A friend of mine, a loyal but very sensible Democrat, posted the Frank Rich column last night on Facebook. Here was how someone commented on it:

"Sad that the corporate media has become so entrenched and partisan. You've got to be a hardcore fundamentalist conservative to dismiss Obama's whole purpose, and assign failure after only two months in office!"

Frank Rich: Corporate media whore.

I posted Michael Wolff's column from this week declaring Obama a "bore" after his Jay Leno appearance. I've never done anything on Facebook that made so many of my friends so mad at me. I suspect I might have even lost a friend just because of that.

Some of us less partisan types forget that for a big part of America, Obama's honeymoon is still in the "we only got out of bed to eat" phase.

tjl said...

for a big part of America, Obama's honeymoon is still in the "we only got out of bed to eat" phase.

It gives me hope to observe that at least the honeymoon seems over at the NYT. Considering that the NYT's coverage of O's campaign was like nonstop fellatio, this is change that means something.

rhhardin said...

Powerline has the line of the day

I feel utterly powerless to do anything about the fellow in the Oval Office who combines infantile leftism and adolescent grandiosity in roughly equal measures.

That's what you blog for. Finding the right words once in a while.

rhhardin said...

McCain of course offered us senility and unpredictable matters of honor.

It was a great election.

Back to smoke-filled rooms. Women would have less effect then.

Richard Fagin said...

To borrow a thought from James Carville, the President is going to wake up one day and find out that the Chinese are the bond market. They already fired a warning shot.

Nice to know the full of himself, arrogant little twerp will wind up under Hu Jintao's thumb. I feel like a total traitor rooting for the ChiComs, but if that's what it takes to stop the nationalization express, so be it. Jeez, even the freaking Commies know better that to do what this President is trying to do.

John Lynch said...

Hmm. Two John Lynchs are posting here.

Alex said...

A country can be wrecked in months, I don't buy that excuse.

traditionalguy said...

The New York culture is in favor of liberals since liberals raise no barriers to a cosmopolitan world of a Financial center employing cultural strains from the world over, who were attracted to NY by the freedom and the Jobs. But they have never seen a liberal leader intent on the destruction of All Financial centers. Why would anyone be thay stupid? Well why? Frank is willing to keep on believing that Obama is a new liberal that will eventually learn that Financial centers are necessary. Wont he?

Alex said...

Financial centers are not necessary to the rabble who don't need anything that they provide. You know the ones, the massed unwashed.

David said...

Here is the evidence of the seriousness of the NYT in covering the economic scene, the biggest story of the 21st century (so far):

Today's Sunday Times business section has a lead story of the rise of organic food and a lengthy piece on Harley Davidson, the bike of choice for yuppie faux bikers.

Perhaps they made up for that fluff with their hard hitting report on the scandal at Miss Porter's School for Girls.

As for Frank the Crank, what the hell has he ever done?

David said...

I will answer my own question about Frank Rich.

Harvard Phi Beta Kappa.
Big Wheel on the Crimson.
Theater Critic.
Culture Critic.
Political Critic.

The guy has never done anything but be a critic of what others do (or don't do.)

Big prattle, no cattle.

Peter V. Bella said...

During the past administrations, the first hundred days was always touted.

With this historic and legacy making administration all we hear is the excuse- he has only been in office X amount of days.

He has no policy smarts or political gifts. He is a corrupt Chicago democrat politician who is out of his league. Obama, like Hillary Clinton had no resume, no experience, and no talent. Obama was smoove, swave, and deboner and way too many people fell for it. There is a sucker born every minute and the country was full of suckers when they elected this tool. Nancy Pelosi is running the government and we are in deep shit.

cubanbob said...

Someone ought to force Nancy Pelosi to switch jobs with her husband. At least he knows how to make and invest money. And she can teach him a hell of a lesson when she blows the family fortune.

Ralph said...

Obama was smoove, swave, and deboner
Racist! and there's nothing wrong with the Presidential hog.

rhhardin said...

Geithner's Plan reads fine - I like the guy - until the jarring note at the end where Obama is mentioned.

That reminded me, just as a wonk reaction note, that it isn't an interesting plan, but something backed only by infantile character.

That reaction, I see retroactively, accounts for the mysterious mentions of serious rule of law just above it.

Namely even with the Government partnership in your investment, they'll likely take away anything you create in an idiot populist rage.

So my reaction as an investor would be screw your plan, in other words.

Good work, Congress.

Maybe some foreign financial center, wherever it springs up after NYC disappears, will be interested, but I doubt it.

Geena said...

There is a serious short circuit in this presidency. When have so many collumnists and commentators who were supporters turned on a president so fast?

Where are the other cabinet people on TV? Where is Hillary, Holder, Gates? Obama is being a microphone hog, and diluting his own authority.

bearbee said...

Maybe some foreign financial center, wherever it springs up....

Some speculate **shudder** Dubai.