Tuesday

Obama optimistic but cautious, nation hides wallets.


I was perusing and MSNBC article that declared “Obama was optimistic but Cautious on the economy”. I found within it many points of interest taken from Obama’s speech. I will try my best to parse meaning and where necessary translate the quotes from political ease to English. The complete article is found here: http://www.msnbc.msn.com/id/30205938

Obama, in fact, said in his speech that a complete recovery depends on building a new foundation for the U.S. economy and making changes in the political landscape…

A new foundation for the US economy, whatever does he mean by that? I am fully cognizant of what he desires to change within the political landscape, namely removing republican opposition but the reference to the economy is tantamount to a Freudian slip revealing more of his socialist leanings.

He also said the economy must be transformed from one less dependent on a risk-obsessed financial sector and more on clean energy, good education and health care costs brought under control.

This on is easy enough to translate; moving from a private sector economy to a largely public sector economy. In the view of Obama and his adherents the average individual and business owner are entirely too stupid to dispose of their own income or manage their own businesses.

"We cannot rebuild this economy on the same pile of sand," he said, invoking a Biblical reference to Jesus' Sermon on the Mount. "We must build our house upon a rock. We must lay a new foundation for growth and prosperity a foundation that will move us from an era of borrow and spend to one where we save and invest, where we consume less at home and send more exports abroad."

Okay, two problems here: 1. any liberal reference to the Bible is more than a bit hypocritical given their fervor for denigrating Christians and 2. The largest borrower/spender on record is the federal government under the leadership of Obama. Maybe another Biblical reference is in order; remove the plank from your own eye before trying to removing the speck from you neighbor’s eye.

"Taken together, these actions are starting to generate signs of economic progress," he said, citing canceled government-sector layoffs, new clean-energy industry hires, a spate of refinancing, and signs of increased credit flows.

The same argument applies as before, these are government (public sector) jobs or at least funded by the government. This means when the money runs dry one of two things will happen, layoffs or more borrowing. If you doubt the conclusion check out GM’s forthcoming bankruptcy.

"The last thing a government should do in the middle of a recession is to cut back on spending," the president said.

Of course, why bother to address the root of the problem while suffering the symptoms of said problem. It’s the moral equivalent of claiming that you’re too drunk to stop drinking.

The president also defended the massive and unpopular government programs enacted under the Bush administration and expanded under Obama to bail out banks and other financial institutions. He acknowledged that sending money directly to taxpayers might be more palatable — but said it wouldn't be as effective.

Really? The banks are effectively sitting on the money, paying it out in bonuses or remodeling their offices. The money in the hands of the private sector would have at least been used to reduce private debt or to make purchases, a lesson that the Obama administration could learn from.

"The truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth," Obama said.

I think Obama is failing to consider that the money given to these banks is borrowed, or printed out of thin air. The borrowed money will draw interest that has to be paid as well negating any real multiplication. The money that has been printed will result in inflation which will negate the purchasing power of the money. Either way it renders the assertion made by Obama a little hollow and naïve.

Tune in next time when well will explore the possibility that Obama is really none other than Pinocchio reincarnated.

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