The current state of Obamanomics, according to former White House economist Keith Hennessey:
Dan Clifton of Strategas Research makes some great points on the choices the Obamacrats made when constructing the stimulus plan:
From economist Robert Brusca:
Note as VP Joe Biden is pondering the success of the Obama stimulus plan and Laura D’Andrea Tyson is recommending a course of ‘seconds’ before we finish ‘firsts’ Germany is posting strong orders growth. The WORLD economy is reviving. Germany may not be shot out of a cannon but its message is clear. … Adding another stimulus program on top of the already in train program would not be a good fit because the attempt to do it would result all the same delays and pork as the last one. … The plan is working as it was supposed to. It’s just the wrong plan and it’s huge.
OK, so Laura Tyson thinks a second stimulus might be a good idea. Will the White House go for it The economic logic of such a package might seem compelling. The original $787 billion spending measure was deemed appropriate by the White House for an economy where the unemployment rate was predicted to approach 9 percent in early 2010 if no new fiscal actions were taken.
Vice President Joe Biden now admits the Obama administration “misread” just how bad the economy really was back in January. No apologies necessary. The Federal Reserve and most of Wall Street also blew it. But what Team Obama might want to apologize for is pushing an $800 billion stimulus/recovery/reinvestment/spending package that will do little to either boost the economy in the short run (quite obvious now) or improve America’s long-term global competitiveness (obvious later). Now with unemployment soaring toward double digits (even though the White House said the stimulus plan would keep it under 8 percent), there is talk of a second stimulus plan. More union-friendly infrastructure spending that will take months to implement? A massive aid package that would reward fiscally irresponsible states and cities? Ugh. Here are five intriguing ideas Obama passed on that he might want to reconsider for a second stimulus:
On CNBC today, WH economist Christina Romer said the president is committed to “doing whatever it takes” to turn around the economy. And she did not rule out a second stimulus plan. Yet the president will not cut corporate taxes or investment taxes — even temporarily much less in a permanent way that would boost confidence and certainty. I think the WH believes it can pretty much ride this out, 2012 being a long way a way and Dems have structural advantages in 2010.
So David Leonhardt of the NYT attempts to explain why the Obama administration was overly optimistic about the economy in its now-infamous “unemployment will not go above 8 percent” forecast:
White House economist Christina Romer says government stimulus is “going to ramp up strongly through the summer and the fall.” This implies that a lack of stimulus explains the poor economy — not that the Obama stimulus plan is simply not working. Yet what stimulus is flowing into the economy isn’t working, as many predicted — including me and Milton Friedman. Listen to Gluskin Sheff economist David Rosenberg (bold is mine):