As of now, I am in control here, in the White House

Martin Feldstein Dissects Obamanomics

I just wanted to make sure you saw this op-ed piece by Harvard Professor and Reagan Council of Economic Advisers Chairman Martin Feldstein. It’s the most succinct and powerful indictment of Obamanomics that I’ve seen.

Feldstein reveals that the economy is actually floating away down far more dire straits than you realize.

The drop in GDP growth to just 1.8% in the first quarter of 2011, from 3.1% in the final quarter of last year, understates the extent of the decline. Two-thirds of that 1.8% went into business inventories rather than sales to consumers or other final buyers. This means that final sales growth was at an annual rate of just 0.6% and the actual quarterly increase was just 0.15%—dangerously close to no rise at all.

Estimates of monthly GDP indicate that the only growth in the first quarter of 2011 was from February to March.

He says the Obama response to the downturn has included feel good fiscal policies that achieved only ephemeral effects.

Cash-for-clunkers gave a temporary boost to motor-vehicle production but had no lasting impact on the economy. The home-buyer credit stimulated the demand for homes only temporarily.

The most obvious way to achieve (real stimulus) in 2009 was to repair and replace the military equipment used in Iraq and Afghanistan that would otherwise have to be done in the future  . . . Instead, President Obama allowed the Democratic leadership in Congress to design a hodgepodge package of transfers to state and local governments, increased transfers to individuals, temporary tax cuts for lower-income taxpayers, etc. So we got a bigger deficit without economic growth.

And the concern among those with a bit of money that THEY ARE GOING TO GET SOAKED is causing a drag on the recovery.

(Obama’s) budget this year repeated his call for higher tax rates on upper-income individuals and multinational corporations. With that higher-tax cloud hanging over them, it is not surprising that individuals and businesses do not make the entrepreneurial investments and business expansions that would cause a solid recovery.

And of course, the failure to be really serious about dramatically scaling back the deficit – “Investments! My new spending investments in the future must survive!” – is killing the real investors.

This creates uncertainty about future tax increases and interest rates that impedes spending by households and investment by businesses.

As Andrew Malcolm notes today in Top of the Ticket, Obama’s chief opponent in the next election is not the Republicans, it’s the economy.

If Obama didn’t read Feldstein’s article, the economy may be on track to beat him.

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5 Responses to Martin Feldstein Dissects Obamanomics

  1. Good! What galls me is when Himself tells US, the people, that things are tough, we are the bumps in the road, bumps on a log, whatever…we are telling HIM! Or should be. The half-empty malls, the arguments (out here) over whether people need all that luxurious unemployment money, BANK OWNED, BANK OWNED on signs down the block.

    On the news Cavuto said he had some “lame” idea of training people for factory jobs at jr colleges—I posted on that–it was a Chamber idea or report…It was not in our paper (much more important to dump on Palin again) …what is the scoop? I don’t think it’s so lame to get an industrial policy–I think half this mess is due to a huge shifting of the mix and supply and demand.

  2. Regardless of the indicators (the Dow drop, interest rates, housing market, jobless numbers) the White House is full steam ahead, in it’s Titanic-approach to the 2012 campaign. When your President is African-American and can’t be touched, a far-left liberal who shares the views of 95% of the MSM and those in the far-left blogosphere, who gives a shit about 10% unemployment?

    Feldstein’s right – no investment. The gas that drives capitalism is investment and the investors are spooked. Obama’s economic policies have truncated investment, making 2012 a minefield for the Democrats.

    • Tom, I couldn’t have said it better.
      Star, we all feel the frustration. I agree with your assessment of the only newspaper in the Phoenix area.

  3. I’m afraid it is not only his economic policies that are snuffing out America. His regulatory agencies have their boots on the neck of all of us. While he parades around living the good life and pretending to do something about the economy, his minions are busy little beavers. They are closing down domestic coal mines and oil rigs. They are sending federal SWAT teams to break down doors and imprison innocent citizens over student loans. TSA goons are molesting citizens on the condition for flying the friendly skies. They are suing Arizona for having the hubris to try to protect their citizens from marauding illegal aliens. His HHS is issuing their own authority for Obamacare waivers. I could go on, but I’m getting depressed wondering if we can ever recover from the damage this man has done to America.

  4. “Cash-for-clunkers gave a temporary boost to motor-vehicle production but had no lasting impact on the economy.” It did have one lasting effect, there are now less used cars for first time buyers to purchase. The rocket scientists in DC decided that the traded in cars needed to be fundamentally destroyed (sodium silicate dumped into the engine and allowed to harden thereby destroying the engine). This has left a serious dearth of used vehicles. Vehicles that young drivers, those just graduating high school or college, would have normally purchased.

    Again, PPP (Piss Poor Planning) has led to unintended consequences, and left the very people who need inexpensive transportation; the poor, the unemployed, the young without any options, other than public transportation – if it exists in their city/town.

    Again, those that think they know best for us, have left little for the least of us.