Joe Biden

Video:: Biden to Obama, “This is a big f*cking deal”

The signing of the healthcare bill last week was significant in more ways than one. I feel it galvanized the Democrats and I also feel it was critical for Obama to make the healthcare bill “personal” and get fellow Democrats to be rowing in the same direction. I think this was quite a challenge, as the liberal factions of the party are ideologically distinct from the more conservative Blue Dog Democrats.

In the wake of the signing, the Democrats got good news in the form of a public opinion poll reporting 49% saying the bill was a good thing, compared to 40% saying it was bad. There was also a spike in donations, with $1M pouring in last Tuesday without a direct ask.

There has been a backlash and alleged incidents of offices being vandalized. The Republicans needed to respond to thwart any momentum, but I’m not convinced their strategy is sound. Sarah Palin started a bit of controversy with her reload and targeting comments in a speech in Senate Majority Leader Harry Reid’s hometown of Searchlight, NV::

The media tried to whip Sarah Palin’s “targeting” and “reload” comments into pageview fodder, but I think the big issue for Republicans is a lack of a message that resonates with a country in the economic doldrums. John McCain claims that Palin’s words are just political rhetoric::

While this all makes for good drama, I’m not sure how effective this type of press coverage is in building support. I can’t help but think of the utter carnage of the 1994 midterm elections. Bill Clinton was weakened by a lack of support in Congress from his own party as a Washington outsider and…Newt Gingrich’s Contract with America. This C-SPAN footage is a bit dry, but it shows a systematic delineation of undermining public support of Democrats and was more successful than many anticipated. The Democrats would go on to lose 8 seats in the Senate and 54 in the House, earning a majority in both.

I think there was and perhaps still is an opportunity for the Republicans to pick up quite a few seats, but there needs to be rhetoric that moderates can sink their teeth into. Without a more substantial agenda resonating, I predict low turnout, as voters sit the midterms out.

Twitterversion:: Post healthcare, Dems get bump in polls & donations last wk. Rep. backlash ensues. Doubtful if 2010 will be another 1994 @Prof_K

Song:: Okkervil River-‘Our Life Is Not a Movie’

"Recession Special" Gray's Papaya, 2 October 2004, Manhattan, NYC by Kenneth M. Kambara
"Recession Special" Gray's Papaya, 2 October 2004, Manhattan, NYC Taken by Kenneth M. Kambara

Years ago, I once had a conversation with an economist who freely admitted that there was no unified macroeconomic theory.  What works versus what doesn’t work in a particular sociopolitical context is really just so much spitballing.  This never surprised me given the complex realities of global capitalism.

I’ve been genuinely perplexed by Barack Obama and Tim Geithners’ macroeconomic policies regarding managing the US through this Big Recession.  So, today’s news that the administration was extending the $700B financial bailout until next October came as no surprise.  I was reading a very interesting blog post on The North Star National, As Obama and Geithner continue Bush’s too-big-to-fail fiasco, blue may turn red in 2010,” which contextualized Obamanomics.  The right is blasting the Obama Administration for Keynesian statist interventionism, while the left, including fellow Democrats in Congress, is getting increasingly impatient with the lack of Keynesian stimulus.  Who’s right?

Well, the fact of the matter that in terms of economic policy, precious little has changed since the heady deregulatory days of Bill Clinton when the economy was flying high.  What has changed is the economy itself.  Valuations of assets have often been distorted and instruments and markets were allowed to be developed in ways that underestimated or distorted the risks.  Of course, nobody expects the Spanish Inquisition, so many were caught off-guard when the house of cards fell and the asset bubble burst.  How did this happen?  Only a select few know that the house of cards of the economy was built with a stacked deck.  In the aftermath, the economy languished and unemployment rose.  All the while, the meter was running with Team America, World Police, with surge on the way.

So, while billions are being pushed towards the “too big to fail,” what’s being ignored are::

  1. Job creation, as double-digit unemployment sweeps the nation
  2. Consumer debt forgiveness/restructuring
  3. A restoration of faith in financial intermediaries

While Wall Street got theirs, I’m concerned that “Main Street” is left high and dry.  The danger is a negative feedback loop, where unemployment not only leads to more consumer debt, bankruptcies, foreclosures, and lower consumption and savings {further tightening credit}, but less tax revenues.  Less tax revenues at the federal, state, and local levels.  Unless the economy turns around soon, the next crisis will be the local governments with the critical services they provide saying the well is dry.

Recently, I saw Joe Biden doing a song and dance on the Daily Show::

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Joe Biden Pt. 1
www.thedailyshow.com
Daily Show
Full Episodes
Political Humor Health Care Crisis
The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Joe Biden Pt. 2
www.thedailyshow.com
Daily Show
Full Episodes
Political Humor Health Care Crisis

Readers in Canada can see the interview here in a link to the full episode on the Comedy Network.

Biden claimed that the bailouts were necessary to prevent a fully-blown depression.  I’m not convinced.  The NorthStarNational blog makes reference to a report that is very critical of the Obama/Geithner approach.  The preface starts out with this::

“The Obama administration has implemented several policies to “jump-start” the U.S. economy. Two core premises are thatmonetary measures are required to strengthen the financial system before the rest of the economy can recover, and that most major banks have a temporary liquidity problem induced by malfunctioning financialmarkets.The administration’s efforts have largely focused on preserving the financial interests of major banks. Research Associate Éric Tymoigne and Senior Scholar L. Randall Wray believe that maintaining the status quo is not the solution, since it overlooks the debt problems of households and nonfinancial businesses—re-creating the financial conditions that led to disaster will set the stage for a recurrence of the Great Depression or a Japanese-style ‘lost decade.'”

What are the answers?  At the risk of sounding populist, there needs to be real job creation on a large scale and deficit be damned.  Oh, and about Afghanistan and its hefty pricetag…

Twitterversion:: #TimGeithner& #Obama extend fin.bailout, but w/unemp% in double-digits, what about consumer spending, savings, & tax rev? http://url.ie/3yv5 @Prof_K

Song:: The Hold Steady-“Stuck Between Stations”