Mission Impossible? Obama Must Rebuild Confidence in Federal Government 20 comments
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Yes, we do have a President (elect)! (See “A Whiff of Leadership?” posted November 22, 2008 at maseportfolio.blogspot.com). An economic stimulus package is in the works. The underlying philosophy - the risks of not doing something big are bigger than the risks associated with inflation and an economic cleanup when the economy shifts into first gear rather than reverse.
We have seen this attitude taken by the Federal Reserve. The Fed, as we have been writing about in this blog, has not wanted to be short in supplying liquidity to the financial markets. Federal Reserve assets have more than doubled in the past ten weeks. Chairman Ben Bernanke has been given the name Helicopter Ben during this barrage of funds. But, the argument goes, the risk is too great to not put money into the financial system until the financial markets begin to function again.
Liquidity is apparently not going to get the economy humming again, and spending of the private sector is going into the tank. Lending in the financial markets is not going to kick-start consumer spending or investment spending - state and local government expenditure is also in decline, so the belief is that the federal government must step into the gap and stimulate incomes and employment.
The talk seems to indicate that the Obama economic stimulus package is going to be somewhere in the neighborhood of $700 billion, of similar size to the bailout package of a couple of months ago. The idea, like that of the bailout package, is that the stimulus package must be a large number.
One thing that is crucial in all of this is that the Obama administration must give off the impression that it is operating under control - that it is disciplined. This is a hard thing to do when the philosophy of the stimulus package is the one described above. However, the administration must appear to be very intentional, on top of the situation, and ready to do what is necessary in response to new information. That is, the Obama administration must rebuild confidence in the federal government. Establishing confidence at the top is necessary because it will help to rebuild the confidence of the whole system as I discuss in “Discipline or the Lack Thereof” posted November 20, 2009, at http://maseportfolio.blogspot.com/.
President-elect Obama seems to be aware of this need to set the tone for the future. I think people, and markets, will respond very well to this because they are so hungry for leadership at this time and are very, very anxious. So, we see two things going on right now - first, the appointment of top quality people to important positions, and second, the intentional effort to create programs and get the discussion in Congress and the economy going so that action can be taken as soon as possible. The important emphasis right now is that the effort is intentional, not passive or just reactive.
Just a final note about the apparent appointment of Larry Summers to head the National Economic Council: this may be an inspired choice. No one questions the intelligence and ability of Summers. Being in the White House, acting as the coordinator of the economic policies of the President, monitoring the President’s economic agenda, and serving as close advisor to the President may not only fit his personality best but may be the real place his talents can fill the needs of the nation. It also superbly complements the other appointments that the President-elect has made to build his economic team.
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pay their mortgages' and 'fill their gas tanks'.
If human beings are that ignorant, which apparently they are, then anything, including 'confidence in the government', is possible.
On Nov 24 05:11 PM bricki wrote:
> Thousands also believe that Obama is a Muslim born in Africa. It
> is easy to find stupid people.
>
If Mr. Obama wants my confidence, he will:
1. Ask Congress to approve, and the states to ratify, a Constitutional amendment making gold and silver the only legal tender for government business and permanently fixing the value of the dollar at 1/1000 oz gold plus 1/100 oz silver,
2. Immediately close most executive departments and fire all their staff,
3. Ask Congress to terminate all bailout programs of any type and description,
4. Begin an investigation of the FDIC's longstanding practice of undercharging banks and failing to adequately account for risky bank activities in setting premiums,
5. Ask Congress for legislation abolishing the Federal Reserve Bank,
6. Instruct the Treasury Department to establish banking regulations requiring that all banks retain in their physical possession an amount of gold and/or silver equal in value to at least 50% of all outstanding demand deposits and at least 33% of all outstanding time deposits,
7. Abandon any attempt to appoint Eric "Censorship for All" Holder to the Attourney General's post,
8. Fire Tim Geithner and appoint in his place Rep. Ron Paul of Texas as his new Treasury Secretary.
If even half of these steps were taken, both my personal opinion of Mr. Obama as a leader and my financial confidence in the United States would immediately and dramatically increase.
So far, however, he's done pretty much the opposite of all of these, so I'll stick with gold, thanks. In *that* I do have confidence. In 5000 years it's never let anyone down.
On Nov 24 02:46 PM Socialism cannot compete! wrote:
> Trust in government is inversely proportional to size of government.
> Period. B.O.'s plans are, by definition, anathema to Liberty...and
> cannot, therefore, induce any lasting trust.
On Nov 24 06:32 PM bearfund wrote:
> The problem of confidence in government is not unlike the problem
> of confidence in banks. Install stodgy, conservative, traditionalist
> businessmen in senior managerial positions, borrow as little as possible
> for terms that match your investments, and spend money on only the
> best investments, and I'll have confidence. That is not in any way
> what the government looked like under Bush, and it is not what the
> Obama administration is shaping up to look like, either. Spending
> is too high. Borrowing is too high. The thresholds to be met for
> new spending are far too low if indeed they exist at all. Government
> is reaching ever farther into people's lives, imposing new intolerable
> burdens and constraints every day, without any checks and balances
> or possibility of appeal. It does too much, spends too much, and
> tries to be too much to too many.
>
> If Mr. Obama wants my confidence, he will:
>
> 1. Ask Congress to approve, and the states to ratify, a Constitutional
> amendment making gold and silver the only legal tender for government
> business and permanently fixing the value of the dollar at 1/1000
> oz gold plus 1/100 oz silver,
>
> 2. Immediately close most executive departments and fire all their
> staff,
>
> 3. Ask Congress to terminate all bailout programs of any type and
> description,
>
> 4. Begin an investigation of the FDIC's longstanding practice of
> undercharging banks and failing to adequately account for risky bank
> activities in setting premiums,
>
> 5. Ask Congress for legislation abolishing the Federal Reserve Bank,
>
>
> 6. Instruct the Treasury Department to establish banking regulations
> requiring that all banks retain in their physical possession an amount
> of gold and/or silver equal in value to at least 50% of all outstanding
> demand deposits and at least 33% of all outstanding time deposits,
>
>
> 7. Abandon any attempt to appoint Eric "Censorship for All" Holder
> to the Attourney General's post,
>
> 8. Fire Tim Geithner and appoint in his place Rep. Ron Paul of Texas
> as his new Treasury Secretary.
>
> If even half of these steps were taken, both my personal opinion
> of Mr. Obama as a leader and my financial confidence in the United
> States would immediately and dramatically increase.
>
> So far, however, he's done pretty much the opposite of all of these,
> so I'll stick with gold, thanks. In *that* I do have confidence.
> In 5000 years it's never let anyone down.
Obama's Hawaiian birth certificate was provided by his campaign and was certified as being authentic by the state of Hawaii officials.
www.snopes.com/politic...
www.factcheck.org/elec...
The Annenberg link a lot funnier though: "FactCheck.org staffers have now seen, touched, examined and photographed the original birth certificate. " Yeah, i too trust the organization that made Obama and Bill Ayers responsible for giving out 50 million in educations grants to be used to teach the poor kids how to read and write, which the two subsequently squandered on community organizing. CONFIDENCE IN THE USA RESTORED!!!!!!!
ps i believe everything i read on the internet, especially Wikipedia
Socialism and Bob prove that people will "believe" what they want to believe.
> jack
0 Limit Congress from serving more than two terms. That is all that presidents are allowed.
0 Stop Congress from voting for their own raises. How did that ever get started?
0 Stop paying lawmakers their full salary after serving just one term, or at retirement. We need to get rid of that pension plan; they’ve let other companies get rid of theirs. You were lucky to get 40 to 50 per cent of your salary after working somewhere for 35 years, but they get 100 per cent.
0 Stop handing out aid to illegal aliens. If we did, then Medicaid and the food stamp program would have enough money to aid the aged and the poor.
0 Secure our borders.
0 Stop allowing babies born to illegal aliens in the United States automatic U.S. citizenship.
0 Have a computer program that cross checks Social Security numbers with fingerprints to stop fraud on many fronts. Use it on voter registration, too.
0 Stop bailing out mortgage companies and banks that give loans to people who can’t afford them.
Only lawmakers can make these changes, as they are the lawmakers.
----------------------...
I have some additional changes that might also help:
1. Institutions that make loans must retain responsibility for the loans. The loans and the associated risks/rewards can't be bundled and passed on to other agencies for investment purposes.
2. Lawmakers should pass laws that ensure that individuals are responsible for their actions. For instance, people who borrow money should be aware they have to pay it back or there will be unpleasant consequences. Of course, people who borrow should be made to realize how the loans are structured.
3. NEVER allow solutions that are constructed at the expense of the people who are not responsible for the problem. People who faithfully make their loan payments should not be penalized for those who do not, just as people who exercise, watch their diet and weight, and take care of themselves should not be penalized for those who do not take care of themselves. Never reward the people responsible for the problem at the expense of those who were not.
.4. Read ATLAS SHRUGGED.
I predict none of the above will happen.
> nice buddy, a link to "Snopes" which looks like it was created by
> my 13 year old brother.
I swear it must be idiot day on SeekingAlpha. Are you also contesting the AP story these articles are based on?
ap.google.com/article/...
The right wing in this country has gone off the deep edge.
> jack
> jack
You have to understand that "competency" = small government in this case!! The earners are much more competent at spending their own money than the government can ever be!
On Nov 24 06:51 PM dw57 wrote:
> actually trust in government is based in competency. some thing we
> haven't had in a while. but it sure was conservative! and really
> believed in free markets . for some.
>
> On Nov 24 02:46 PM Socialism cannot compete! wrote:
A big part of the solution is to abolish the income tax entirely and move to consumptive taxation, along with a Balanced Budget Amendment. Those 2 things would take us most of the way toward fixing the out of control government size and spending. The moral part...there is no mandate possible that can change mens' hearts...that will have to come from within.
fairtax.org
On Nov 24 06:52 PM dw57 wrote:
> we tried this before. and it failed for about 200 years. before we
> gave up and decided it was time for some thing different. then about
> 8 years ago we tried to go back to 1900. and we see how well that
> worked. or not.
www.wnd.com/index.php?...
On Nov 24 05:51 PM Socialism cannot compete! wrote:
> Two of his own relatives testified that they were present at his
> birth in Mambosa, Kenya. Maybe those who believe that which has
> factual basis (vs. that which he himself fails to furnish verification
> of, for example...) are not the stupid ones!