Posts Tagged ‘financial crisis’

Obama’s Double Talk on Economy

March 14, 2009

When President Obama reassured China and the world that their investments in US bonds and the dollar were safe, he made the following quote:

“And that is not just in U.S.-issued treasury notes, but also in the private sector and the commerce and the industry that has made this the most dynamic economy in the world.”

If our economy is so great and dynamic, why did he just go about ripping it when he was pressing for his stimulus package?  Didn’t he say it was unsustainable and that we needed new clean energy jobs to take us into the 21st Century?  The double-talk from Obama is starting to get ridiculous.  With Bush, at least we knew where he stood.  Obama is a much smarter man, but he seems to be trying to please too many people.

Also, just to clarify things, our economy is not in great shape.  When almost 60% of our GDP has been fueled by spending, I don’t see how we’re in great shape.  This year, in order to make up for the lack of consumer spending, almost half of our GDP is predicted to come from government spending.  Also, we’ve had almost zero savings for the last decade, we have no manufacturing base, and we are up to our eyeballs in debt.  To me, that is anything but a dynamic economy.

We can fix the economy, but no one wants to re-route the ship.  Instead, we’re burning through trillions of dollars trying to keep it down the same path to oblivion.  We need savings and investment from the private sector to provide capital, and we need to start producing goods and services in the US.  We have the best and most skilled workers in the world.  We also have some of the best creative minds.  What we need is more competition to lead to better innovation and new products and skills to turn us around.  We need to strip away layers of government interference that burden businesses and hinder their ability to compete in the global market.

Obama really pushed hard for his stimulus package, telling us how bad of shape our economy was in.  Now that his stimulus isn’t really working, he’s pushing hard to tell everyone how great our economy is.  He needs to decide where he stands on all of this and provide a consistent message to the world.  We need a strong dollar, and we need to start producing and stop spending.  It can be done, but our leader has to come to this realization as well, and not believe the words coming out of his own mouth.

Another Treasury Department Patch Job

November 25, 2008

This one will cost us $800 billion to buy troubled assets from banks to free up consumer lending.  Wasn’t this what the original TARP was supposed to do? 

Let me get this straight, Congress first rejected and then approved $750 billion to buy troubled assets and toxic paper, but the Treasury went their own way and just gave money to big banks, whether they wanted it or not.  Now they are coming back with a new $800 billion bailout to do what the first one was supposed to do, except this time it’s bigger and doesn’t need any Congressional approval.

This is just another hack job by the two guys who are supposed to be running our economy.  Instead, they are ruining it.  They both admitted that they have no idea what they’re doing and just keep going with the flow, printing money left and right, changing their minds, and not even having a plan to stick with.

People right now are not borrowing because they can not meet their existing debt service or they want to save money.  Pumping hundreds of billions of dollars into the system might encourage some companies to lend money, but who is going to borrow money right now?  Also, why would these institutions lend when they have no confidence in the borrower?  Forced lending and borrowing by the government is just going to lead to more malinvestment and an even longer recession.

Our economy is driven by spending and racking up huge debts, by everyone from the government to big busness to individual families.  Rather than pumping more money into the system and encouraging more debt, we should be seizing this opportunity as a nation to return to a culture of thrift, savings, and production.  The system as we know it is broken, and now is the perfect time to fix it.

So Much for Change: Obama Names Next Treasury Secretary

November 23, 2008

Tomorrow, President-elect Barack Obama will announc his choice for the next Treasury Secretary of the United States.  His name is Timothy Geithner and he’s the New York Federal Reserve Bank President.

The financial cartel in Washington will continue.  Now you have two members of the Federal Reserve in Ben Bernanke and Geithner running the finances of our country.

So much for CHANGE.  If Obama really wanted “change,” he would have gone with someone who is
an economist or accountant by trade, not a banker who works for the
Federal Reserve and served in the Clinton White House.  That’s just
four more years of the same failed policies of the past 16 years.

Think about what a Treasurer normally does in any other organization.  Their job is to keep track of the expenditures and income of the organization.  You would think the Treasurer of the United States would be some sort of straight-shooting accountant, right?

Instead, we get a crooked banker, who is responsible for getting us into the same financial crisis he is being brought in to try and tackle.  The Fed’s actions brought on years easy credit and malinvestment that brought our entire financial system to a grinding halt.  Geithner will just continue the inflationary monetary policy that benefits the banks and government, while it screws the average person.

Until we get a Treasury and a Federal Reserve that supports a sound monetary policy and has a plan and sticks to it, we will continue to keep trying to fight a fire with gasoline.  Haven’t they learned that they can not inflate their way out of this mess?  That’s how we got to this point in the first place.  They might be able to get the house of cards stablized for the time being, but it will be built higher than ever before.

Sooner or later, we’re going to have to rebuild our economy from the ground up with a solid foundation of savings and production.  I thought that Obama would be able to bring in sweeping reforms on the tails of his “change” campaign message.  I guess I was wrong.