Krugman: Economy is Stabilizing
June 8 (Bloomberg) -- The U.S. economy probably will emerge from the recession by September, Nobel Prize-winning economist Paul Krugman said.
“I would not be surprised if the official end of the U.S. recession ends up being, in retrospect, dated sometime this summer,” he said in a lecture today at the London School of Economics. “Things seem to be getting worse more slowly. There’s some reason to think that we’re stabilizing.”
HT: The Gartman Letter
46 Comments:
So the stimulus wasn't too small or was unnecessary altogether? The banks ability to raise tens of billions of dollars in private capital was more important than government intervention? The economy righted itself?
Krugman was predicting a recession since '04 so I wouldn't place too much stock in his whacky views
So much for the $5 Trillion in expansionary fiscal policy Krugman wanted a while back!
I agree with Pingry. I think if Krugman's right, he owes us all an explanation of how that could possibly be reconciled with his prior pronouncements on the size and scope of government intervention that would be needed. I don't anticipate any mea culpa's from his direction.
Since only a small percentage of the "stimulus" has been spent, how about canceling the rest of it?
Hmmm, Krugman knows how elicit strong feelings when he blathers on mindlessly...
Alan Caruba is less than impressed by Krugman's alledged towering intelligence...
Neil Cavuto seems to think Krugman is less than honest...
Law professor William Sjostrom writing at the Atlantic blog is also questioning Krugman's veracity and mental competence...
So this begs the question is Krugman one of the reasons that the New York Times is crashing and burning?
I was hoping that the economy was beginning to stabilize. But now that Krugman has opened his mouth, I'm looking for another leg down.
Ah, yes, it's all so wonderful. What could have changed Mr. Krugmans mind?
Krugman reveals himself again less an economist as much as an Obamaton.
Nice clip, Anon. 9:17.
He's probably trying to associate his ideas and Obama's with the recovery (which is coming anyway) to position them to take credit.
the only aspect of the recovery that they could possibly lay claim to is the very speculative "psychological" impact of having passed the stimulus.
In my mind, and this should be emphasized by others, it is that the economy is recovering WITHOUT a stimulus... making it obvious that it was an unnecessary destruction of the budget.
Yes indeed anon, that was nice little clip and I thank you for it...
It also lead to this very interesting blog site: Frank Strategies: The Blog
Had I a line item veto to be used to squelch any of these comments, nary a pearl would be thrown away to the swine.
Thanks for each,
A
Frank Strategies is a great find.
I sometimes think that because Krugman writes so many pieces for the NYT (his blog also) and other publications, it seems as if he wakes up, looks at his calender, and says "oh shit, I need to write something again, and in a hurry!"
Then he proceeds to just pull some junk science out of thin air to satisfy the deeply held beliefs of his newspaper masters and liberal audience.
Has anyone else noticed how variable his writings are? He seems like he cannot make up his mind.
Maybe people have confidence in the new Administration. That, and deficit spending, and easy money, is righting the train wreck left behind by the Bu$h jr. team.
I sure hope so.
I do get the sense the Obama economic team shows up for work, everyday, and they take their jobs seriously. And they are not idealogues, but pragmatic types.
I still wish the dollar-bill printing presses would run wild for while. We need a round of moderate inflation to effectively pay down our debts.
"That, and deficit spending, and easy money, is righting the train wreck left behind by the Bu$h jr. team"...
LOL!
Even the AP knows that is nonsense: SPIN METER: Meet the new stimulus, same as the old
From Bloomberg: Obama Tells American Businesses to Drop Dead
From Rasmussen Reports: Voters Now Trust Republicans More than Democrats on Economic Issues
No. 1:
Well, this blog seems to want it both ways. Theer are lots of posts showing an economic recovery starting. I sure hope so.
But none of it is due to the new White House.
Okay.
Then the collapse of the financial system, which happened on Bu$h jr's watch...must be Obama's fault.
Or, the new team is serious about economic administration. They inherited a train wreck, and decades of fiscal irresponsibility. They have a weak hand to play, but they are bluffing pretty well. It seems to be working.
I sure hope so.
I am sorry to see you think the USA has died. I can encourage you to consider migrating to Mexico, with very low effective tax rates on the rich, a weak central government, and very weak regulatory processes.
You should steer clear of Germany, with higher tax rates and regulatiosn galore. The Germans love the administrative state.
Good luck!
wow, I see from Benjamin that a new set of talking points has been issued. Or rather the same talking points as before, just adjusted to meet the new conditions.
So let's recap:
1. People trust the new administration's economic team (so much that now Republicans have the advantage in polls on the economy)... hmmm
2. The administration is SERIOUS about economics. So serious that it took them forever to fill in staff roles under Geithner (have they even finished that job?) and so serious they can't answer calls from the UK's financial ministers. So serious, that they have just had a very public media fight between Summers and the other members of the team (likely coordinated by Rahm).
3. The new team inherited decades of fiscal irresponsibility.. so they want to fix it by doubling (um, tripling) down?
I suppose that without any coherent explanation of what happened to the economy before and without any coherent explanation of what is happening now, it's better for you to engage in mythology. The funny thing is that there are coherent explanations for why the economy dropped so fast and for why it is coming back now - they just have nothing to do with Obama's huge and wasteful "stimulus".
So, I suppose you are on the payroll for Obama? or are you just doing this out of misguided hero worship?
I don't worship Obama, but I sure hope his economic programs work. He has assembled a smart team. The right ideas? Time will tell.
We know what didn't work, and that was Bush policies. They led us to a collapse of our financial institutions. We literally had a old-fashioned bank run here in Los Angeles, at IndyMac. And worse elsewhere.
Oddly, I sense some people are actually hoping the Obama team will fail in reviving our economy. I hope they succeed, just as I wish success to all Presidents.
"They [Bush policies] led us to a collapse of our financial institutions. We literally had a old-fashioned bank run here in Los Angeles, at IndyMac. And worse elsewhere."
Sigh. Not agreeing or disagreeing with you...but please, have some evidence and logically support the claim. These broad sweeping generalizations don't lead to any real discourse or yield any new knowledge. Which policies? How did these policies result in a run on IndyMac? How are they specifically "Bush" policies? I don't endorse everything the man did, but Jesus Christ let's not hold him accountable for the JFK assasination, genital warts, AND the run on banks. Support, please.
"We know what didn't work, and that was Bush policies. They led us to a collapse of our financial institutions. We literally had a old-fashioned bank run here in Los Angeles, at IndyMac. And worse elsewhere."
which part of his policies "didn't work"?
- The tax cuts worked, definitely. You can simply look at the tax receipts after they were enacted.
- his deficit spending didn't work (but, Obama is doing much more than Bush ever dreamed of doing)
- his regulations didn't work (not his "lack" of regulation). allowing FAS 157 to go into place was one of the biggest causes for the banking crisis. He should have killed SOX as well - the regulations and BS around the Enron debacle were a big part of why accountants wanted FAS 157, and why the banks had a crisis.
- his home ownership policies didn't work. supporting CRA, Fannie/Freddie (he asked for changes, but didn't get them through) didn't work and directly led to the bubble that tanked the banks in combination with FAS 157. However, when he tried to change these things the Democrats blocked changes (they weren't looking out for Bush when they did this).
As for IndyMAC, look at Senator Schumer's actions (again, no friend of Bush) and a huge supporter of the housing bubble.
There is plenty to criticize Bush about (and you'll have found it on this blog when he was in office), but the Obama team has kept his stupid policies and discarded the things that actually worked.
As for hoping they succeed. Well, I just hope we can get them to STOP. Their incessent meddling with markets and contracts is a huge distraction that is still holding this economy back. The huge deficits they are piling up are a huge draw on capital investments as well - limiting long term investment.
In this particular case, I just want to be emphatic in pointing out the silliness in them claiming that it was the stimulus that has started to wake up this economy. the 40 billion dollars or so that they've spent is less than a sneeze in an economy of our size. I'm sure Krugman wants them to get credit, but he's never let facts stand in the way of his opinions.
Alan-
The level of deficit spending is much higher than the $40 bil. figure you cite. Overall, the feds are being stimulative.
Also, you forgot to mention the rating agencies. (Moody's etal). They put AAA on bonds that are now worth 30 cents on the dollar. They are paid by issuers. Thsi seems to me a recipe for catastrohic failure. I do not know what bond buyers put up with it. The free market (which I do worship) seems blind, on this point.
I just wish we woudl print lots of more money. We need a round of moderate inflation for a decade or so, to pay down our debts.
Our political parties, and our voters, lack the will to balance the budget.
BTW, we paid down the federal deficit nicely in the 1950s, when the top federal income tax rate was 90 percent, applied on incomes of more than 200k. We had good economic growth and low inflation. A R-Party Congress and Prezzy did that.
Benjamin,
One small point. The reason that banks were able to securitize mortgages was due to changes in the international banking rules in 2004.
Under
Basel II, capital requirements were increased in an effort to strengthen the international banking system. The new capital requirements applied to conventional loans and mortgages but did not apply to loans and mortgages held in the form of securities.
The new rules inadvertantly created an incentive to securitize thereby increasing leverage. When the interest rates were low, and the housing prices were rising, everything was fine. No one questioned the value of the underlying assets.
All that changed when the housing bubble burst and the sub-prime borrowers started to default. Overnight the market for securitized mortgages evaporated and now the banks had to take the assets back on their balance sheets and raise their capital reserves or declare huge losses.
The financial crisis was not the result of sub-prime lending but excessive leverage. Few aside from Gramlich predicted this crisis.
George Bush for all of his foibles was not responsible for Basel II nor for the actions of the Federal Reserve which created a housing bubble with interest rates held at a 50 year low for an extended period of time. Both parties have encouraged home ownership as a social good for the past 30 years.
QT: Appropriate moniker, BTW.
This is not your argument, as you are a Canadian. But anyway, I will respond, due to my courtly nature.
For better or worse, the responsibility for economic leadership in the US has become centered in the White HOuse. Bu$h jr. owned the WH, the Congress, and the Supreme Court during most of his Presidency.
The result was a train wreck, with endless wars, runaway deficits, and a Dow Jones that was lower when he left office than when he arrived (The Dow quadrupled under Clinton). The stock marklet declared the Bu$h jr. prezzy a total flop.
By what measure was Bu$h jr. a successful manager or administrator?
I will set aside one aspect of this mess: The credit-rating agencies. They rated a couple of trillion (or more) of bonds AAA that have instead sunk to 30 cents on the dollar or less. They are paid by issuers. A clear conflict of interest.
I do not know why bond buyers have not set up a rival system, or insisted that issuers pay into a pool that then is doled out to rating agencies on a random basis (meaning the issuer cannot cherry-pick the rater).
The free market completely failed in this instance, with catastrophic results.
I wonder what the free-market explanation of this abject failure is? Besides that it was Obama's fault?
It begs for regulation, as it yet has not been reformed. The free market seems incapable, in this particular case.
It's ironic, Bush helped lower income Americans more than any other president, while Obama will hurt them more than any other president:
Under Bush:
1. U.S. firms became substantially more efficient in producing more output with fewer inputs. Consequently, there was a record 20 consecutive quarters of double-digit U.S. earnings growth.
2. Enormous resources were shifted from older industries into emerging industries. Consequently, the U.S. leads the rest of the world combined in the Information and Biotech Revolutions (in both revenues and profits), while older U.S. industries redeployed inputs into goods with market power.
3. There was a steep rise in U.S. living standards. Cheap capital and goods induced demand, resulting in abundant real assets and goods.
4. There was an enormous shift of real wealth from savers, including foreigners, to borrowers, including lower income Americans.
5. The U.S. captured enormous absolute "gains-of-trade" from international trade.
6. The largest global economic boom in history took place from 2002-08 resulting in over a 40% increase in world per capital real GDP (after 15 years without an increase).
Under Obama, taxes will rise, inflation will accelerate, interest rates will rise, and there will be fewer and smaller assets and goods per capita, or a real decline in U.S. living standards.
Under Clinton, the U.S. had a "superbubble" from 1995-00, at the tail end of a spectacular structural bull market, where U.S. actual output generally exceeded potential output. Under Bush, we had another superbubble, in a structural bear market, that began in 2000, where there was a strong expansion of the real goods market, real asset booms, and a steeper rise in U.S. living standards than 1995-00, along with the greatest global economic boom in history. Obama will spend trillions of dollars and micromanage the economy. So, if we don't get another superbubble, from 2009-14, that at least matches the prosperity of 1995-00 and 2002-07, Obama should be viewed as the biggest economic failure in U.S. history (a strong recovery is more likely after a severe recession).
Here's a nice take down of Krugman and his assessment of the budget crisis in California.
It's a good thing he did his Noble work before the dementia set in.
Benjamin,
I haven't read such an avalanche of ignorance since I was required to read Noam Chomsky. Really, get a clue.
Notice, that this post, like all of yours, has absolutely no links to supporting evidence.
OF COURSE the economy is stabilizing. Risk is nationalized. The entire financial sector, insurance and the autos are all GSEs now. I'm sure I'm leaving out an industry or two, but the point remains.
The problem isn't that that uncertainty is decreasing. The problem is the we don't exactly know the COST of all of this "stability" we now have. Economic stagnation, permanently high unemployment, astronomical taxes and the coming healthcare wait lists are a pretty high price to pay for "stability".
Anon-
Do you guys really need links to find out what was the Dow Jones in any year? Or the federal budget deficit? Or inflation?
Maybe I should hold your hand while you go to the bathroom?
Peak Trader--
Okay, but why did the US stock market love Clinton and hate Bu$h jr.?
You can call me Chomsky, but the markets say Clinton good, and Bu$h jr. bad.
Hey, the Rubin-Clinton team set out to bring down US interest rates, and did so by controlling the federal deficit.
The decline in interest rates halped spark a long bull stock market. Profits went up nicely too.
Hey, bring back Clinton.
Obama? Wait and see.
Benjamin, the stock market also "loved Bush." If you look at the long-term trend line of the S&P 500, since the Information Revolution began in 1982, it should be around 780 today, and you'll see two bubbles where the S&P deviated substantially from the mean, when it reached over 1,500 in 2000 and 2007.
U.S. production was much more inefficient under Clinton, e.g. Information Revolution firms used too many inputs to produce output, which lead to a quick and massive creative-destruction process, mostly between 2000-02. Under Clinton, there was a strain on resources, which was unsustainable. Under Bush, resources were used much more efficiently. The U.S. has never had a 10-year expansion without a recession. I wouldn't suggest recessions are market failures. Obama made the recession worse. I stated four months ago:
How to prevent an economic contraction in 2009 (currently, roughly a 2% contraction is projected in 2009):
1. Obama should change his stimulus plan to a $2,000 tax cut per worker (in the form of a tax holiday), along with increasing unemployment benefits by a similar amount. This will help households strengthen their balance sheets, i.e. catch-up on bills, pay-down debt, increase saving, spur consumption of assets and goods, etc. This plan will have an immediate and powerful effect to stimulate the economy. When excess assets and goods clear the market, production will increase.
2. Shift "toxic" assets into a "bad bank." The government should pay premiums for toxic assets to recapitalize the banking industry and eliminate the systemic problem caused by global imbalances. The Fed has the power to create money out of thin air, to generate nominal growth, boost "animal spirits," and inflate toxic assets.
3. Government expenditures should play a small role in the economic recovery. For example, instead of loans for the auto industry, the government should buy autos and give them away to government employees (e.g. a fringe benefit). So, automakers can continue to produce, instead of shutting down their plants for a month. Auto producers should take advantage of lower costs for raw materials and energy, and generate a multiplier effect in related industries.
Also, I may add, the free market works well. There were many severe booms and busts during the Industrial Revolution:
American Prosperity and Price Deflation
Written by Richard M. Ebeling
Friday, 09 May 2008
The decades between 1865 and 1900 were the years of America’s industrial revolution. Before this time, America had an economy of primarily light industry and farming. By the beginning of the 20th century, however, the United States had surpassed all of the European nations in manufacturing, including Great Britain and Imperial Germany, the industrial giants of the time.
Mass immigration from Europe, huge capital investments, and technological improvements provided the means for America’s growth and rising standards of living that soon became the envy of the rest of the world.
During the years after 1865 prices in general slowly fell from their Civil War highs. A Consumer Price Index that stood at 100 in 1865 had declined to 57 by 1900, or a 43 percent decrease in prices over a 35 year period. On average prices went down around 1.2 percent each year over three and a half decades.
At the same time, indices of money wages in agricultural and manufacturing employment both rose during this period as labor was becoming more productive due to capital investments, even with a rising population resulting from millions of immigrants joining the American work force.
The index of money wages in agriculture rose by almost 40 percent between 1866 and 1900, while money wages in manufacturing went up 20 percent during this period. Thus, on average, money wages in general increased by about 30 percent for workers as a whole.
In combination with the productivity gains and the capital investments that resulted in the 43 percent decrease in the price level, this meant that in the last 35 years of the 19th century the real standard of living of the American people increased by almost 75 percent as measured by the positive change in the average American’s buying power in the market place.
My problem with Krugman is that I never can tell whether I'm dealing with
"Krugman the Economist"
or
"Krugman the Partisan Hack".
So which is it this time?
Benjamin,
Thanks for your reply. While it may not seem like this issue is germain to a Canadian, consider that 80% of Canada's exports go to the U.S. and that the crisis in the U.S. financial system caused a domino effect in financial markets and banking sectors around the world.
I have to agree that the rating agencies did a lousy job and have not been held to account. Would have to agree that Bush was very poor in many areas...the response to Hurricane Katrina, runaway deficits, the invasion of Iraq. I do not believe any reasonable person could blame Obama for the present financial crisis or recession.
My difficulty with stimulus per say is that the size of the U.S. economy is so great that stimulus has very limited affect and the bulk of the stimulus will be spent in 2010 & 2011 well after the recession has passed. The previous administration tried stimulus which previous posts have shown registered a minor blip on the radar screen while the recession only deepened.
I believe that the FED and the Treasury Dept. are doing a reasonable job under unprecedented circumstances although this work is not without controversy ie. the stress tests taking the worst case scenario.
To me, addressing the problems in the financial system should be the priority rather than fiscal stimulus which will come too late and can easily be gamed. I am primarily concerned about the recent U.S. debt projections which indicate that the U.S. national debt will rise to 100% of GDP by 2017 without even factoring in the obligations of social security or medicare.
If runaway deficits were bad policy under Bush, why would even larger deficits be good policy under Obama? Sooner or later, the debt will have to be paid by higher taxes which will create a dead weight on growth, inflating the currency or making drastic cuts in services. Usually politicians opt for tax increases.
Benjamin,
The US Stock Market doesn't like Bush? It (Dow) was above 11k still, despite the banking / financial sector problems in late summer / early fall. It seems like the market didn't start going down in earnest until it was clear that a pro-central government, anti-business, wealth redistributing, administrative-experience-lacking candidate was the odds on favorite to win the presidency.
Bush may have been POTUS all through 2008, but a lot of what happens in the markets is based on expectations. Those expectations that brought down the stock markets seem to have been well founded given what has happened over the past six months.
I don't think Bush was a good president, but he certainly is blamed for more than he deserves. I think Obama is being overly-demonized as well, but in both cases the mud slinging is based in some fact.
"But none of it is due to the new White House.
Okay.
Then the collapse of the financial system, which happened on Bu$h jr's watch...must be Obama's fault"...
Let me guess Benjamin you never bother to check out what passes for news now a days, right?
Consider the video: Video: Economic Reporting – Then and Now
"We know what didn't work, and that was Bush policies. They led us to a collapse of our financial institutions. We literally had a old-fashioned bank run here in Los Angeles, at IndyMac"...
I see, you don't bother to check the news out...
From Reuters: California's attorney general is reviewing a request by former employees of IndyMac Bancorp Inc to investigate whether a New York senator triggered the bank's collapse by releasing confidential information...
"We know what didn't work, and that was Bush policies. They led us to a collapse of our financial institutions"...
LOL!
Timeline shows Bush, McCain warning Dems of financial and housing crisis; meltdown
Cutie/QT:
Well, I don't know if anyone is reading anymore, as there have been many new posts. But here is the ol' collage try:
I agree the cumulative US budget deficit and trade deficit are daunting.
Back in the 1950s, we acted responsibly to pay down our debts. A R-Party Congress and President stuck to a 90 percent income tax rate on incomes of more than 200k annually. Our economy grew nicely, and we had low inflation. We paid down debt smartly.
Capital markets were fine as the federal government was not draining capital out of the system, but rather putting it back in. Back then, we had something to worry abut, named "crowding out." That problem has been solved by excess saving rates in the Far East and elsewhere. We have capital gluts now.
Back to the point: If we are serious about paying down federal debt, we will have to take a page out of the R-Party, circa 1950s. Those were real conservatives, not the whining pansies we have today.
I don't know that we need to go a 90 percent top tax rate. Probably even 40 percent would do it.
If we got federal spending back down.
However, I see no resolve in either party.
That is why, sadly, our option today is inflation. We have to inflate our way out of debt.
Beating up on Obama, who inherited a ship wreck, is just sad. He is like a ship's captain who got on board, discovered holes in the hull, that he was on a reef, and that the ship was pointed the wrong way. First he has to patch the holes, even as the ship remains pointed the wrong way.
If, in a year or two, the ship is still pointed the wrong way, by all means bash away on Obama.
I hope things are great in Canada.
I'm with you Benjamin. Some of the comments here are pretty outrageous - people defending the bush adminitration when it was clearly TERRIBLE. We are sitting on the product of 8 years of bad leadership if you can even call it "leadership".
Ritec-
Let's see, by the time Bu$h jr. left office, the biggest commercial banks, the biggest investment banks (Wall Street), the biggest insurer, and the biggest automaker were bankrupt.
Some large fraction of homes were headed for foreclosure. The US economy was shedding jobs at 500k per month.
We were running huge federal deficits, huge trade deficits, and we were nowhere near concluding overseas wars.
The Dow Jones was lower than when Bu$h jr. took office.
If the R-Party wants to call that a good track record...well, then they should elect Sarah Palin.
We can replay the record again, with some extra background music, to be sure.
Benjamin is a lefty troll. Either doing this as a volunteer or on the payroll of some leftist group. Obama's polls are cracking and they are sending out the troops to disrupt the criticism on the blogs.
Notice how he's managed to disrupt the conversation here while not posting a single fact or statistic in support of his statements. Thankfully there are enough economists on this site to see through the BS, but on other sites, there probably isn't enough people who know the subject well. Unfortunately, that also means that the people on here have tried to engage him -- only to get responses without fact or statistics.
Wonder if the 90% tax rate in the 50's is part of the new talking-points sent out to their online troops?
ritec whines: "people defending the bush adminitration when it was clearly TERRIBLE. We are sitting on the product of 8 years of bad leadership if you can even call it "leadership"...
What? No spell checker?
Big Media Distorts Bush Economic Record
The Unspinnable Obama Economy
You are a dead ender, benjamin. Your current obsessions will get you nowhere.
Benjamin,
Thanks for replying. Not sure if you are still listening. Sorry about the invectives flying; people seem to get very empassioned when it comes to politics. By contrast, you have tried to address comments without losing your cool or being offensive.
Can appreciate your comment that Obama has inherited a can of worms and it seems reasonable to give him some time to turn things around. Would also have to agree that neither party has shown leadership on fudiciary management.
Have to also agree to a certain extent with 1 that the media coverage of GWB was very negative. Certainly, Bush made mistakes (invading Iraq with no WMD based on intelligence from Curveball received from Germany; the Germans would not allow U.S. intelligence to interview this source to assess the yellowcake story) although I do not believe that a president exerts much control over the economy. Presidents merely stand in front of the economy and take credit for any success. Unless a government has policies like Zimbabwe or Argentina that are so bad that the government simply shuts down the economy (ie. seizure of private property, hyperinflating currency, defaulting on national debts) which is actually pretty hard to do.
Most Canadians are aware the realities of a large national debt. When interest rates rose in the 1980's, the debt that had been run up by a charismatic but economically illiterate PM Trudeau ballooned. A large chuck of our budget still goes to interest payments taking this money out of programs and services.
Years of cuts to provincial transfer payments to balance the federal budget (always easy for a politician to let someone else make the tough choices) have directly impacted our health care system reducing access to care. We have patients waiting for 2 years in pain for a hip or knee replacement, and long waiting lists for specialties.
On diagnostic equipment Canada lags the OECD with fewer MRIs per capita than South Korea. Belgium, for example, has 9 x as many MRIs per capita as Canada.
Two years ago, a suit was brought before the Supreme Court in Quebec on behalf of patients who were forced to wait for cancer treatment beyond medically safe limits. The Supreme Court judgement ruled in favor of the patients noting that "Access to a waiting line is not access to care".
Health Care in Canada is finally getting stable funding but it will take at least a decade or more to correct these problems.
I sincerely hope that the projected debt levels do not materialize. Unfortunately, President Obama has a very ambitious agenda which involves major spending initiatives in healthcare, education and greening the U.S. economy coupled with the proposal to create fully refundable tax credits (ie. tax refunds to people who do not pay taxes). This agenda implies significant increases in government outlays. Presidential ideas don't always make the cut like Hillarycare or social security reform.
Foreign policy also presents many difficult problems for the new president...Iran, Russia, North Korea, Afghanistan.
There are many icebergs that Obama will have to negotiate.
QT, you may not consider Benjamin's belittling the president of the US "offensive," but I assure you that many of us do.
Anon,
I can understand that you find Benjamin's remarks deeply offensive. President Bush had one of the most challenging presidencies and had to make some very difficult decisions. He was also the most thoroughly abused president in living memory.
I respect President Bush as an intelligent and very principled man. He has conducted himself with grace and dignity in spite of the abuse that he has received. I do not for one moment believe that President Bush is responsible for the housing bubble, or subsequent the credit crunch. The Iraq invasion could easily have been prevented by Saddam Hussein if he had chosen to comply with the UN resolutions and allow unrestricted access to the inspectors rather than playing games.
We can perhaps agree that Bush's presidency was controversial and he continues to generate strong reactions. I have had dinner parties where GWB was an uninvited guest, the subject of vociferous and very hostile exchanges. Charles Krauthammer coined the term "Bush Derangement Syndrome" which isn't far from the mark.
It's Obama's turn to take the body blows without having George Bush to kick. History has a habit of humbling even the most arrogant politicians and sideswiping their grand designs.
P.S.
I choose not to be offended because I have encountered this many times as a conservative. The highlight was being called a "nazi" for putting up a conservative party lawn sign in the last federal election. What part of a multi-party democratic system can be compared with a genocidal, totalitarian regime? This is likely why I don't like outlandish comparisons and moral equivalency in argumentation.
One of the most inspiring things I have ever read was the Introduction to Freedom & Capitalism which described how utterly marginalized classical economic ideas were when the work was first published. My inspiration is Milton Freedman, a man of great wit, intelligence, principle and courage who stood up for what he believed in the face of insurmountable opposition. I respect George Bush for the same courage.
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