James Pethokoukis

Politics and policy from inside Washington

Obama’s lost year

Nov 5, 2009 17:10 UTC

Rahm Emanuel famously said that you “never want a serious crisis to go to waste.”  And certainly the sense of crisis earlier in the year helped the White House pass the $787 billion stimulus package. But where stands the rest of the Obama legislative agenda?

Healthcare. The House will likely pass a bill this weekend, but big difference remain with the Senate, including paying for the plan and what to do about a public option.

Cap-and-trade. Kerry-Boxer is going nowhere which is why Kerry and Graham are working on a a dual-track approach.

Financial regulatory reform. The House and the Senate have completely different notions about what to do about system risk regulation. Plus there may be new efforts to try and “shrink” the banks and limit the scope of future activities.

See you in 2010, Obama Agenda!

COMMENT

Everyone talks about how smart this president is. He is as dumb as a post. Bush didn’t pretend to be the smartest guy on the block. However, this guy Obama does pretend, but only fools people dumber than him like most of the people who elected him and the the DemoRat congress. He is just a hack that parrots things he has learned from his leftist mentors. This man does not have any principles or any original thoughts.

As a black man in America, I hoped that this guy would moderate and succeed. It seems that he is on the way to being a presidential failure because his welfare-state mentality and his weakness on foreign and military policy. He is someone that this black person will not ever respect unless he changes his leftist ways. (Which ain’t going to happen!)

Posted by Jack Smith | Report as abusive

Obamanomics, Big Government, inflation and the price of gold

Nov 5, 2009 14:43 UTC

Ed Yardeni says the rising price of gold is sending a message about the political economy:

Yesterday, I observed that gold tends to be a hedge against reckless governments as measured by their widening deficits and mounting debts. It is also a hedge against governments that either cause or enable inflation to rise. It is interesting to note that:
(1) The price of gold soared from a cyclical low of $104 on August 31, 1976 to a high of $737.5 on January 22, 1980. President Gerald Ford left office in January 1977, near the low for gold. Jimmy Carter was President from 1977 to 1981, when gold soared.
(2) By the time Ronald Reagan left the White House in January 1989, the price of gold was down to $408.3. It fell to $330.9 when George H. W. Bush left Washington.
(3) It continued to drop during Bill Clinton’s two terms, and actually bottomed almost the day George W. Bush moved into the White House.
(4) From then on it was mostly straight up with a brief drop late last year.

Draw your own conclusions, or else, let gold be your guide. Confidence in currencies in general, and the dollar, in particular, was lowest during the Carter and Bush Jr. years, and the first 10 months of the Obama Administration. Confidence was highest during the Reagan, Bush Sr., and Clinton years, when the federal deficit was shrinking and turned into a surplus. During those years, the US government was mostly pro-business, and the public was mostly pleased with the government’s economic policies.

COMMENT

Gold is only one signal among many that informs economic policymakers. When the economy is performing significantly below capacity, when unemployment levels are uncomfortably high and expected to remain so, when the spectre of deflation remains a possibility however slight, why do some OBSESS over the price of gold? The nascent recovery in the economy looks quite fragile thus far, so why take any chance at all of further impeding that recovery by defending the dollar now or reducing deficits now on the altar of blind homage to gold? Yes, gold may well be signaling problems in the future. But we have to survive the present before we even get to that future. So screw gold, let’s get back on the path to sustainable economic growth. Then we’ll be strong enough to respond to what gold may be telling us.

Posted by Bill, Fairfax, VA | Report as abusive
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