The American Spectator

yoyo| 3.3.09 @ 10:05PM

He has spent like 1.250 trillion dollars in one month. So you take that times 12 months, then you take that times 4 years. We are in big trouble.
He doesn't know how to manage money. We have no checks and balances in the house or senate. His goal is to distroy the U.S. as fast as he can get the job done. Plus the administration is giving 250 million to Hamas the terroists to rebuild Gauza. Very dangerous. I pray that he accepts christ as his savor soon. yoyo

Ellis Wyatt| 3.3.09 @ 10:43PM

Reagan "inherited" a far worse economy, didn't whine about it, and then created 25 years of wealth that the world had never seen before. those are some big shoes to fill if we are going to keep talking about "inheriting" a recession. How will history judge Obama. Not a good start, let's just hope there is not a violent revolution.

Dave| 3.4.09 @ 5:40AM

I feel sick every time I read Obama claim to have inherited this economy. He was a Senator; he voted to create this economic situation. There was nothing dumped in his lap and no surprises for him.

ame| 3.4.09 @ 9:12AM

President Carter left an economy far worse by nearly every measure than the economy Obama inherited from George W. Bush.

The democratization of the markets that began under President Clinton means that you really can’t penalize Wall Street without extracting a pound of flesh from Middle America.

Democrats are economically challenged - and now we have POTUS, the socialist/communist economic disaster.

Bob| 3.4.09 @ 9:14AM

I can't believe that you uneducated nerfs still don't understand Reaganomics. Here is a summary of Reaganomics by one of his own chief economists, William A. Niskanen:

"Reagan left three major adverse legacies at the end of his second term. First, the privately held federal debt increased from 22.3 percent of GDP to 38.1 percent and, despite the record peacetime expansion, the federal deficit in Reagan's last budget was still 2.9 percent of GDP. Second, the failure to address the savings and loan problem early led to an additional debt of about $125 billion. Third, the administration added more trade barriers than any administration since Hoover. The share of U.S. imports subject to some form of trade restraint increased from 12 percent in 1980 to 23 percent in 1988.

There was more than enough blame to go around for each of these problems. Reagan resisted tax increases, and Congress resisted cuts in domestic spending. The administration was slow to acknowledge the savings and loan problem, and Congress urged forbearance on closing the failing banks. Reagan's rhetoric strongly supported free trade, but pressure from threatened industries and Congress led to a substantial increase in new trade restraints. The future of Reaganomics will depend largely on how each of these three adverse legacies is resolved. Restraints on spending and regulation would sustain Reaganomics. But increased taxes and a reregulation of domestic and foreign trade would limit Reaganomics to an interesting but temporary experiment in economic policy.

The Reagan economic program led to a substantial improvement in economic conditions, but there was no "Reagan revolution." No major federal programs (other than revenue sharing) and no agencies were abolished. The political process continues to generate demands for new or expanded programs, but American voters continue to resist higher taxes to pay for these programs."

Indiana Alex| 3.4.09 @ 10:57AM

Trying to increase growth, productivity, and living standards in a tight monetary environment is far more of challenge than when interest rates are zero. Of course the goal of Obama is not to increase growth, productivity or living standards. His goal is "economic justice".

Reagan certainly had it worse. Obamanomics is the economics of spin.

Don't listen to the experts (Bob), think for yourself. It's really not that difficult.

Or you can try this "nerf".

www.classicalprinciples.com

Bob| 3.4.09 @ 11:13AM

Actually, Alex, you are precisely wrong. Most economists have shown that monetary policy is the most effective way to stimulate economic growth. Reagan had room with Volcker's help to reduce the Fed funds rate and now you can't use that as a tool because the rate is so low.

Please take a course in economics before you post idiotic nerf information. Besides, the quote I posted came from one of Reagan's chief economists who is far better trained in economics than either of us.

Indiana Alex| 3.4.09 @ 11:29AM

There he goes again...

Indiana Alex| 3.4.09 @ 11:31AM

If you look at the website in my post you'll find that an article on monetary policy co-written with Reagan's CEA. And much information that disputes everything you post.

Edumacate yourself.

Bob| 3.4.09 @ 11:45AM

Gee, Alex, you should actually read what you reference. I've said that monetary policy is far more effective as a stimulus than economic policy and your speech giver reference agrees. Reagan had a very high Fed funds rate that could be reduced -- Obama does not. Do you have any logic in that gray matter of yours?

In addition, there was nothing on his site that supports his statements with fact. I didn't see one chart. You should really read one of Reagan's chief economists view of Reaganomics -- both the good and bad.

http://www.econlib.org/library/Enc1/Reaganomics.html

Compare the efficacy of his argument and the hackish nature of your reference.

Indiana Alex| 3.4.09 @ 11:54AM

Bob,

You have proven your true liberal. Everyone is a hack, but you.

I think the science is now settled.

L. Ross| 3.4.09 @ 11:55AM

Bob:

I would like to think that we know something about economics. After all, people study it very intensely. However, no one can run an experiment on an economy under controlled conditions and observe the results. Of course we can run computer simulations of our reactions, but chaotic effects will always render such simulations worthless. (Witness our current debacle with the sale of bundled derivatives. Their collective value was confirmed through computer modeling. Oops!)

If you cannot run controlled experiments, you cannot predict outcomes of your efforts with any confidence.

Think of the physical sciences. Computers, aircraft, satellites, ballistics. All these things were developed with the scientific method, testing one small change at a time to determine which underlying principles control outcomes.

Now think of biological sciences. Vaccinations, cancer treatments, flu shots. These scientific achievements have all been achieved through the same principles, but with less success because there are so vastly many more variables in biological systems. The greater the interconnectedness of a system, the harder the root causes are to isolate, and the greater the challenge in predicting outcomes based on a particular input.

Which brings us to economics, and it's closely related cousin, the stock market. I submit to you that all these economists are talking out their collective butts when making predictions about the economy. If they were so darn good at predicting what the end result of the combined effects of hundreds of millions of individual decision makers would be, wouldn't these economists all be millionaires due to their outstanding stock picks?

Or, put another way, if economists in government know how to keep an economy healthy, how did we get into this flat spin in the first place?

I submit that economics is not a science at all, it offers very little predictive value, and is only accurate in hindsight.

I'm not saying there is no value whatsoever in the study of economic theory, but as a science, this one is mostly smoke and mirrors.

Bob| 3.4.09 @ 1:59PM

L. Ross -- I agree with you 100%. I was trained as a mathematician and one of the principles of mathematical theory is that interpolation (i.e., analysis) is relatively accurate but extrapolation (i.e., forecasting) can be very inaccurate. That's why I limit my comments to the past.

When you do that, you develop probabilities for behavior. If, in the past, when we've had tax cuts, they have not resulted in significant GDP growth and have increased the debt significantly. There are also examples of tax increases that align themselves with GDP growth as in the Clinton administration. This means the probability that tax cuts affect GDP growth is extremely low as there is no consistent data supporting that combination of events in real life. However, there is an extremely high correlation of tax cuts and increased debt.

So while I cannot forecast the future, I must rely on analysis to provide a program that has the highest probability of success. That is the best any of us can do -- economist or not.

That said, we know that spending does stimulate the economy if for no other reason than it increases the number of government contracts. The question that I cannot answer given historical data is whether that spending is a good investment. That's why I have a difficult time supporting Obama's stimulus bill except for a couple of provisions where the pass through to low income people will be spent quickly (since spending is 2/3rds of the economy).

I also have an historical problem with bailouts as all they do is slow down the normal market retrenchment process. We have a process for that -- it is called bankruptcy and it is quite effective.

So let's not conflate economic analysis with economic forecasts and the resultant table of probabilities.

Indiana Alex| 3.4.09 @ 3:18PM

Bob,

You admit you can't forecast, yet you call an award winning interest rate forecaster a hack.

While you blog on Amspec.

Bob| 3.4.09 @ 4:24PM

Wrong again, Alex. I said that extrapolation is less predictive than interpolation. You can apply probabilities of outcomes but not forecast them with high accuracy. The definition of an "award winning interest rate forecaster" is "charlatan".

Conservative Thinker| 3.11.09 @ 10:01AM

I feel like I'm in the twilight zone. We have Geithner responsible for punishing tax evaders and Barney Frank calling for the heads of those "who caused this economic crisis." And
Obama in one breath complains about inheriting this huge debt that he vows to reduce while signing the biggest stimulus package in history, (doubling President Bush's debt) promising transparency, but only where it doesn't count. And we're only on the 50th day. God help us all!