President Obama’s first hundred days

April 29, 2009

 Diana Furchtgott-Roth– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.  The views expressed are her own. —

In his first one hundred days, President Obama has shown himself to be one of the most radical U.S. presidents in history.  He is harming America’s defenses by publishing memos on interrogation of detainees and threatening to prosecute lawyers who drafted supportive memos.  He shakes hands with America’s enemies, such as Venezuelan leader Hugo Chavez, and sends mixed signals to its friends, such as Colombia’s President Uribe.

And, in the name of combating a recession, he is destroying the fundamental institutions of America’s free-market economy.

Not only would President Obama’s proposed programs move government spending to levels, in relation to the economy, unseen since the end of World War II, but his administration is increasingly involved in the minutiae of a new, unwise, industrial policy, such as how much firms can pay workers, and which banks are allowed to repay government loans, and which industries and companies deserve a government rescue package.

Under Obama’s proposed budget, the nonpartisan Congressional Budget Office projects the government deficit to hit $1.2 trillion in 2019, or six percent of GDP, after “bottoming out”—if it does—at  $658 billion in 2012, a level more than 40 percent above the highest deficit under the presidency of George W. Bush. By 2019, government spending would take up nearly a quarter of GDP, far higher than at the peak of Iraq war spending and the highest, excepting 2009 and 2010, since 1946.

Much has been written about President Obama’s plans for multi-year, growing expenditures on energy and health care. He has proposed to invest billions of dollars in wind, solar power, and other renewables, which now produce about 3 percent of U.S. energy, yet he neglects nuclear power, which produces 20 percent.  He has suggested a substantial cap-and-trade energy tax, which would raise more than a trillion dollars over time, according to some estimates. And he wants a down payment of $634 billion for a universal health care plan whose details he has not yet confided to the public.

In addition, Obama is pushing for other programs which are both costly and naive.  One of his priorities is high-speed passenger rail service, which was given a downpayment of $8 billion in economic stimulus funds and possibly $5 billion more in the budget.  This proposal is, to put it charitably, poorly-designed. Real high-speed rail, with trains that travel 150 miles an hour and faster, can be found in Europe and Japan, but they have not stemmed the increasing use of road transportation.  And these trains need their own, specially engineered rights-of-way, which would cost much more than $13 billion.

Some of Obama’s economic proposals appear to be aimed at placating labor unions, an important element in his political base, rather than encouraging economic recovery.  In March, even before the swine flu scare, he signed legislation ending a program, opposed by the Teamsters union, allowing a small number of Mexican trucks to enter into the United States.  Mexico is retaliating by imposing tariffs on almost 100 agricultural products, including wheat, beans, beef and rice, hurting American exporters.

In another concession to unions, the president has let the U.S. Labor Department end some disclosure requirements for union finances, originally put in place so that union members can learn how their dues are being spent.

Although Obama lauds transparency, the Labor Department has announced that it would not enforce the filing of the form that requires union officials to report conflicts of interest, such as whether they had personal relationships with firms doing union business.  In addition, unions will no longer be required to disclose supplemental information about officers’ pensions and compensation.

Even as unions are allowed to reveal less about their finances, financial institutions that have taken government funds, some reluctantly and under Treasury Department duress, are subject to an unprecedented level of scrutiny as to their compensation of senior executives.  Goldman Sachs, Morgan Stanley, and J.P. Morgan are being discouraged from repaying their Troubled Assets Relief Program funds, even though pay caps are interfering with retention of talented staff.  A government pressuring banks to do something not required by law is engaged in extra-legal behavior.

The government’s treatment of executive compensation bonuses, standard in many industries, has also been capricious. Some executives working in banks that received TARP funds were paid their bonuses without complaints from Washington.  Others, notably those working at AIG, were demonized both by the press and government.

For those who favor nationalization of the economy, or at least of big business, Obama’s first 100 days have been a roaring success.  Others, however, pray that the economy can survive not only the recession but also the president’s prescriptions.

53 comments

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Diana, you are talking rubbish, absolute rubbish. After the gormless Bush, the US finally has a president with a brain that can actually think, who writes beautifully and even manages to speak well. All 3 skills were sadly absent in Mr Bush.Also Universal Health Care systems exsist in all the civilised world, usually for well less than 10% of GDP. Here Health is heading for 16+% of GDP and predicted to rise further, while equity and access issues worsen. Also we have business going bust because of exposure to employees health costs.

Posted by C D Xbow | Report as abusive

100 days? 100 days! What did any of us do in the past 100 days? Stop an economic downward spiral that’s been building since the dawn of deregulation? Sell our car, stick with our old, camera-less cell because the latest gizmo is too expensive? Adjust our expectations of our own standard of living because we are all living in a mess of debt during a time when debt has become a far-too-accepted state of being?And health care? Well yippee for the deregulation there too! I get to choose, if I’m lucky enough to not have a pre-existing condition that is, between the expensive brand name drug or the really expensive brand name drug that my doctor is touting because she’s been given an extra couple thousand bucks if she prescribes a certain amount of brand name drugs. Yeah, more control over that, or at least a forced competive market, would be bad, huh?And don’t get me started on those lazy, lazy ass poor people and immigrants who couldn’t even lift a finger to pick their own noses if their lives depended on it! We all started out in a green meadow full of daisies, just frolicking and pulling ourselves up from our bootstraps right? And the only people to blame for their own troubles is the people with trouble themselves so I’ll be damned if I’m going to stand in the same line for the same health care and education as people who just don’t deserve it!Come on! After reading commentaries like Diana’s I like to close my eyes and imagine a country where people are valued more than politics, more than money, more than being right. And sometimes when I imagine it I also imagine my country is full of people that are smart enough to make their own choices rather than relying on multi-billion dollar companies to make choices for them. And I have a 1973 orange convertible MG.

Posted by G Wertzer | Report as abusive

Good Article: but you have left out the President\’s tirade about the removal of the leftist, drug dealing buddy of Chavez\’s, Zelaya. Calling the actions taken by the Honduran congress and supreme court as illegal when, in fact, what was done was legal, compliant with the constitution.Honduras has been a friend and ally of the US for 30 years. This radical, left leaning President of the US, has totally disregarded the Honduran laws in his statements, and has acted in an improper way. This is a clear indication of his vision of communism for the United States. Disregard for a Democratically elected congress legal actions in favor of a Drug Dealing leftist.Maybe that is too harsh, and The jerk in Honduras is the president’s drug source??? Hmmmmm, hadn’t thought of that.

Posted by Richard | Report as abusive

Why wasn’t there any criticism of the misguided and idiotic leadership of George W. Bush from people like Diana? It’s because of hypocrisy plain and simple. Obama’s policies are repairing the economic disaster left behind by Bush, the Nasdaq and S&P are RISING and not tanking like under Bush but yet Diana is outraged? Bush crashed the economy, failed to respond to disaster but instead often created disasters, lied about weapons of mass destruction, and spoke english as if it was a second language for him and her response was SILENCE. Yes hypocrisy indeed.

Posted by tom | Report as abusive

Radical is not a strong enough word.I voted for “change” not bankruptcy. I voted for an improvement in our insurance system, not being forced into a plan that lets the Pres, and the congress opt out of. We the people pay for the governments employee insurance plan, and are going to have to pay for lesser coverage for ourselves. The government does not administer their own insurance plan (it has been farmed out to a private administrator). And yet, Mr. Obama insists that the government will administer the plan for us. My questions as to why, go unanswered by the Presidents office.Lets be brutally blunt here, Mr. Obama says we cannot have the same insurance coverages that he and the congress have, and ours has to be administered by some other “CZAR”. This statement is coming from the very same people who have bankrupted Social Security, along with anything else they say that can administer correctly.

Posted by Lenny | Report as abusive

This article is pure nonsense!Obama of course not perfect is doing a great job for all American. But particularly those that Ms. Diana Furchtgott-Roth has no idea about: The Poor! Professor Levy

Posted by Alan Levy | Report as abusive

Sounds a bit over the top there lady with the hyphen. You badmouth the now to cover for the recent past. Our last president has left a legacy of dead brave men and women for a useless war. He left our economy in a position where it may take years to recover if we do at all. And you want to hissy fit about the president shaking hands with some wannabe dictator? And starting a rail project to promote jobs is something to gripe about? Lady please shut up. If your an economist and you were part of Bushes appointed cronys, mam I would think you would be embarassed to admit it. In fact I’d probably go get a job at a grocery store and bury all the evidence.

Posted by huh | Report as abusive

Obama has certainly divided the nation with his promises and actions during his firat 100 days. Is he the most radical president ever? Well, he certainly is one of the most radical in my 50 years as a voter.Obama has made tons of promises, and has already broken many of them. The appointments he has made so far are mainly incompetent fringe players with radical backgrounds. And his speeches apologizing for nearly every aspect of America simply make me sick.He has added incredibly to the debt our kids and grandkids will have to pay off. He has added jobs, alright — but almost exclusively to the federal government, at a time when the nation needs public sector jobs (which are now down effectively some 15 or 16 percent…)His plans to gut our current healthcare system in favor of an entirely new, federally-mandated and run system scare the hell out any thinking adult.I think that a large share of all American voters — upwards of 65% — now understand that America made a HUGE mistake last fall in voting for Obama.

Posted by mike | Report as abusive

This is incredibly biased, will make sure to never read an article by Diana Furchtgott-Roth.

Posted by George | Report as abusive

Great Article! Tom’s post is so wrong. Obama pushed the throttle of Bush’s policies of pending to the floor spending at three times in Obama’s first 8 months than Bush did in eight years. Do you homework before spouting off what someone told you to think.

Posted by TheBigPicture | Report as abusive

If nothing else, this article does promote a healthy exchange of views. One of those views would be Bush bashing. With a little research I found that since 2001 and the following years Bush had warned congress and others of the potential financial catastrophe of Fannie Mae and Freddie Mac in addition to the derivative mess and other exotic instruments. All warnings went unheeded or ignored. Prior to that, in the 90′s Brooksley Born who served in the Clinton White House as chair of the CFTC , had warned of a serious financial crisis due to the growth of unregulated derivatives. She was particularly concerned about swaps. Her proposed regulations of these derivative was strenuously opposed by Alan Greenspan, Robert Rubin and… Lawrence Summers. The same Lawrence Summers that is now in the Obama White House as Director of National Economic Council. Well, well… so continued warnings from Bush , and the failure of Clinton and his advisors to heed the advice of Brooksley Born led the way to economic disaster.

Posted by cfiman | Report as abusive

You’re right on track concerning the worst President in the history of our great nation.What I tell every one that seem’s to think he is angelic,so to speake , is just look at his record so far.He has surronded himself amongst the most far left and radical people possible. I just ask all those still attractive to him, to please take a common sense approach to his policies and agenda. If they can still back him then, We have a totall breakdown in democracy as we know it, or were being taken over without much of a fight.Sincerely,Ricky Trimnal

Three points to Ponder:1. If previous adminstration did not screw it all up with “WMDs”,”SHOCK & AWE”, and TAX CUTS, we would not be having these problems.2.Obama was elected as the President unlike GW Bush who was “selected” by a bunch of supreme court judges in the 1st term. Give the guy a chance to fix the mess left behind by others.3.What is your solution? other than being a critic in your cozy house.Monday morning quaterbacking wont fix these problems.

Posted by Shirish Naik | Report as abusive