Thirty Days of Obama

[Stephen Fox]

http://www.nybooks.com/articles/22450

[ET]

Obama elected: DOW at 9625.
Obama inaugurated: Dow at 8281.
Obama in office 30 days and implementing policy: DOW at 6763.

Appears the folks who actually risk their own money don't have much hope. I know I've see a lot of "change" in my 401(k).....guess I'll just have to "hope" things get better.....at least until inflation comes roaring in.

[Sandy]

Thirty days is certainly not enough time to reverse the downward spiral the Dow is now in, which comes as the result of the economic policy of the previous President and his administration. Reversing economic damage like that will take a while, just like it did when Roosevelt worked to reverse more than a decade of previous Republicanomics that brought about the Great Depression. It will take a while for the money put forward to circulate. But it will circulate, unemployment will level off and eventually decrease, and the wheels will turn again. I regret the lost ground in my retirement funds, though I am glad what I have is fairly diversified, but then, I didn't vote for Bush. If your 401K is sagging, he's the reason, not Obama.

[Jonathan]

...the downward spiral the Dow is now in, which comes as the result of the economic policy of the previous President and his administration...

Stock prices are the result of the demand for them. Demand is determined by the buyer's belief that the stock purchased will a) increase in value, b) be from a company that will be able to pay out consistent dividends, or c) some combination of a) or b). In other words, stock's are valued with an eye toward future, not present, value. The Dow is a composite of the stock prices of a list of companies.

So, it is not what has happened in the past that is an indicator of current individual or Dow composite value but what current stock holders and potential stock buyers think will be the future value. Estimates of future value are almost completely determined by what the these holders and buyers predict will happen.

Every step that the government has made since TARP 1 has led holders to sell and buyers to not buy. Obama is merely accelarating the bad decisions made under the Bush administration late in 2008.

Bottom line, the folks who live and breath stock values are running away from the stock market because of what Obama is currently doing. It will be very difficult for historians to spin this any other way...but reading what passes for elementary and high school history books these days, I'm sure they'll try.

[KeithE]

...the downward spiral the Dow is now in, which comes as the result of the economic policy of the previous President and his administration...

Stock prices are the result of the demand for them. Demand is determined by the buyer's belief that the stock purchased will a) increase in value, b) be from a company that will be able to pay out consistent dividends, or c) some combination of a) or b). In other words, stock's are valued with an eye toward future, not present, value. The Dow is a composite of the stock prices of a list of companies.

So, it is not what has happened in the past that is an indicator of current individual or Dow composite value but what current stock holders and potential stock buyers think will be the future value. Estimates of future value are almost completely determined by what the these holders and buyers predict will happen.

Every step that the government has made since TARP 1 has led holders to sell and buyers to not buy. Obama is merely accelarating the bad decisions made under the Bush administration late in 2008.

Bottom line, the folks who live and breath stock values are running away from the stock market because of what Obama is currently doing. It will be very difficult for historians to spin this any other way...but reading what passes for elementary and high school history books these days, I'm sure they'll try.

Jonathan is right in one respect - it is the future the buyers are betting on. But it is with a short term viewpoint, not long term viewpoint in these days of instant trading. Most active investors these days are looking for quick increases and avoiding any further slump before the bottom hits.

But he is wrong to blame Obama on this, imo. All market watchers I know (me being one) are waiting for the the bottom of the crash (due in high measure to the Bush policy of deregulation of the securities market) to shift out of money markets or bonds. They are quite eager to cash in on the rebound. So after a few days (or maybe a week) of upward trends, I suspect the volume will increase and the indexes improve somewaht (perhaps sputtering with ups and downs for a while). Only when the effects of the Obama reforms (stimulus package) take hold - probably not until the 3Q or 4Q this year- will teh market become bullish again. If that doesn't happen by say a year from now, you can blame Obama and Congress.

But it is true that Obama has not pulled off a turnaround in confidence yet with lofty speeches or fireside chats. It would have been interesting to see what Nader would have done. Some hints are given here. He probably would have let the Wall Street firms go into bankruptcy or strictly regulate them like the Credit Unions he mentions in the article just linked.

But we all know that Nader was not in the cards.

As for McCain, he supported TARP 1 (kinda sheepishly) which has been a total bust and voted against the stimulus (our largest hope for recovery). Not good judgment, imo.

[Chris]

Stock prices are the result of the demand for them. ...Bottom line, the folks who live and breath stock values are running away from the stock market because of what Obama is currently doing.

Investors started "running away" from the market in September and October. When did banks start going belly-up? When did AIG fail? Who was President then? Do you remember?

[Jonathan]

Stock prices are the result of the demand for them. ...Bottom line, the folks who live and breath stock values are running away from the stock market because of what Obama is currently doing.

Investors started "running away" from the market in September and October. When did banks start going belly-up? When did AIG fail? Who was President then? Do you remember?

Chris, we're making the same point. Obama not only voted for TARP 1, but he has only accelerated Bush's bailout policy of last Fall. And, let's not forget that Senator Obama was the #2 recipient of campaign contributions from Fannie and Freddie or that Dems like Barney Frank opposed Bush's WH economist's early warnings about the huge risks that Fannie and Freddie were supporting in the housing mortgage market.

But I also remember that Bush decided not to press the case and, like he did on so much of domestic policy, yielded to the forces of higher spending. And I thought that he presided over the largest increase in domestic pork since LBJ...until this past month.

[Haruo]

But it is true that Obama has not pulled off a turnaround in confidence yet with lofty speeches or fireside chats. It would have been interesting to see what Nader would have done. Some hints are given here. He probably would have let the Wall Street firms go into bankruptcy or strictly regulate them like the Credit Unions he mentions in the article just linked.

Our credit union is begging for members to ask for loans. We're quite happy with the CU but not yet ready to go for a mortgage. From the Nader article:

There are even some special low-income credit unions, though not nearly enough to stimulate economic activities in these communities and to provide "banking" services in areas where poor people can't afford or are not provided services by commercial banks.

I should look into how the credit union that operates out of Mount Zion Baptist Church here in Seattle is doing. In fact, maybe I should even see if I can open an account in it. As an act of ministry. But I see their website has been temporarily disabled... nwbfcu.org.

[Jonathan]

Jonathan is right in one respect - it is the future the buyers are betting on. But it is with a short term viewpoint, not long term viewpoint in these days of instant trading. Most active investors these days are looking for quick increases and avoiding any further slump before the bottom hits.

The quick traders have been killed in this market (no tears for them) but as longterm traders (like myself) saw that the government was making it up on the fly (save this company, let this one fail, artificially picking winners and losers), we started parking our funds in money markets, fixed income funds, and gold. In other words, when the government decided to go intensely short term in late Fall '08, they placed a target on the backs of longterm investors. Now that the Obama adminstration and the Pelosi/Reid legislature has chosen to blow through more cash (acquired through borrowing and printing) without even presenting a coherent plan (Timothy 'I'm too talented to be held accountable for not paying my own taxes' Geitner's outline was an embarrassment). Now, we're seeing the market tank each time that Obama opens his mouth because the investors understand that he a) doesn't have a clue, or b) he is orchestrating the transition of a normal recession into a severe crisis for the purpose of setting up a centrally controlled, command economic model. If a), the markets will not find a solid floor until the President stops spouting golden sounding but hollow rhetoric. If b), investors could abandon US markets for a generation (as happened between 30s and the 50s).

Would McCain have been better? Well, I didn't trust his understanding of economics to avoid chaotic and panic fueled moves (his announcement to suspend his campaign to rush back to Washington and his debate promise to spend $300 billion to buy up all of the toxic assets displayed his immature economics) but I don't think that he would have been as quick to rush toward the type of command economic model that was proven so wrong in the 20th century.

BTW, the next time you hear Obama talk about trying to stop the fall in housing prices, go out and look for a chart that shows the median home price over the past 100 years, normalized for inflation. And then consider that most of the hyper increases occured in 4-5 states. The market was so skewed at its peak (and still is) that there is simply not enough money available to toss at this and support the artificial pricing.

There is significant merit in Nader's contention that overextended corps should be allowed to fail.

[Jim]

The insistence that some sort of non-regulation of securities by Bush has caused the current downturn is disingenuous. Every economist insists now that the housing crisis fueled by the demands of President Clinton and his ilk that everybody own a house is the cause. Bush warned repeatedly during his administration that something had to be done but lacked the guts or the means to turn that around. He compounded the mess by starting the bailouts with the $300-per-person early last year. That’s not quite fair because the Congress was completely taken over by democrats in January 2007, so that’s where the boondoggle started but he could have vetoed it, as he should have. When the dems took over, the market stood at 12,622 (24 January 2007). It increased during the boom in place until 09 October 2007 (14,165). Then came the campaign, with either Clinton or Obama heavily favored to win. By 15 October 2008 the market stood at 8,578. Yesterday it was down to 6,763. It has lost one-half its value in the two years democrats have controlled Congress and lost one-fourth of its value since Obama essentially took control with his pronouncements after the election. Obama’s refrain, along with his Congress, has been to do what FDR did.

Concerning FDR: Henry Morgenthau was Treasury Secretary 1934-45 during the Great Depression of the 1930s and said this in 1939: “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong…somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises…I say after eight years of this administration we have just as much unemployment as when we started…And an enormous debt to boot!” The unemployment rate in 1933 was 25%, in 1939, 17%.

Morgenthau didn’t lose his job. He passed judgment in advance on the “stimulus” plan of President Obama, as presented in his speech on economics. He has a democrat-controlled Congress to do his bidding. It’s doubtful that his constituency will have the gumption to face up to what Morgenthau laid out back in 1939, when conditions were immeasurably worse. The alternative then was to let nature take its course – free market economics – but World War II came along, and the rest is history. Disallowing nature to take its course in the housing market and during the last few years otherwise has caused this crisis, and the president’s method will prolong it. Bush warned many years ago and Congress didn’t listen. Now, it’s too late.

[Bruce Gourley]

The insistence that some sort of non-regulation of securities by Bush has caused the current downturn is disingenuous. Every economist insists now that the housing crisis fueled by the demands of President Clinton and his ilk that everybody own a house is the cause.

You know better than to say "every economist" (you're just spoiling for a fight this morning, I guess):

Nobel Prize-winning economist Paul Krugman

Foreclosure Phil

Bush and Clinton administrations both at fault

Problem goes back to Reagan

And a better answer yet ...

[Jim]

The insistence that some sort of non-regulation of securities by Bush has caused the current downturn is disingenuous. Every economist insists now that the housing crisis fueled by the demands of President Clinton and his ilk that everybody own a house is the cause.

You know better than to say "every economist" (you're just spoiling for a fight this morning, I guess):

Nobel Prize-winning economist Paul Krugman

Foreclosure Phil

Bush and Clinton administrations both at fault

Problem goes back to Reagan

And a better answer yet ...

What liberals of your ilk either don’t understand or can’t admit is that after WWII the economy that under-girded the inordinate advancements of this nation in virtually every field of endeavor has been based on free enterprise and free markets, notwithstanding the actions of all the crooks in both business and government, as well as the welfare entitlements, including Medicare and prescription medicine payments for those who don’t pay through the nose for insurance (I do) to cover it. My health insurance and co-pays amounted to 25% of my income in 2007 (haven’t figured this year), but I’m not complaining about that.

What I’m seeing is a conscious, concentrated effort by the nation’s leadership to turn this country into Olde Europe. Bankrupting it entirely is the quickest way to do that, other than by a White House coup, which would be far more interesting but unlikely. The use of the word economist referred only to the sane ones so thanks for the correction. I didn’t get any farther than Krugman because his Nobel put him in the same class as Carter, Arafat, and Gore, and that automatically places him among the suspect.

[Bruce Gourley]

The insistence that some sort of non-regulation of securities by Bush has caused the current downturn is disingenuous. Every economist insists now that the housing crisis fueled by the demands of President Clinton and his ilk that everybody own a house is the cause.

You know better than to say "every economist" (you're just spoiling for a fight this morning, I guess):

Nobel Prize-winning economist Paul Krugman

Foreclosure Phil

Bush and Clinton administrations both at fault

Problem goes back to Reagan

And a better answer yet ...

What liberals of your ilk either don’t understand or can’t admit is that after WWII the economy that under-girded the inordinate advancements of this nation in virtually every field of endeavor has been based on free enterprise and free markets, notwithstanding the actions of all the crooks in both business and government, as well as the welfare entitlements, including Medicare and prescription medicine payments for those who don’t pay through the nose for insurance (I do) to cover it. My health insurance and co-pays amounted to 25% of my income in 2007 (haven’t figured this year), but I’m not complaining about that.

What I’m seeing is a conscious, concentrated effort by the nation’s leadership to turn this country into Olde Europe. Bankrupting it entirely is the quickest way to do that, other than by a White House coup, which would be far more interesting but unlikely. The use of the word economist referred only to the sane ones so thanks for the correction. I didn’t get any farther than Krugman because his Nobel put him in the same class as Carter, Arafat, and Gore, and that automatically places him among the suspect.

Thanks, Jim, for affirming that only economists who agree with you are genuine economists! (I knew you were an important guy, but did not realize how true economists grovel before you, and how enthroned you are in your own mind.)

[Stephen Fox]

What I see in collinsville, alabama is among the poorest of the poor and politically weakest are Guatemalan peasant farmers who among other factors came this way cause Bush/Clinton/Bush Nafta policies had adverse effect on their small plot farming.
There they had a culture and status and community; albeit there was other political turmoil in the country.
I'm not an expert in the matter (obviously) but am fairly convinced NAFTA didn't help them at all.

[Jonathan]

Stephen references NAFTA as the reason that Guatemalan farmers came to C'ville Bama...and then he writes:

albeit there was other political turmoil in the country.

There has to be a Mr. Obvious section of the gold spur award for Stephen's amazing "duh" moment here.

The folks in Guatemala, until the late 90s, suffered around 50 years of violence resulting in more than 150,000 deaths, roving militias massacred innocents, around 700 villages burned, assassination squads, and more than 1 million refugees.

And you blame NAFTA for these folks wanting to leave their home country? Free trade is one very powerful mechanism that can assist in opening up a nation to the world. Opened nations have a much harder time keeping bad news under wraps.

Obama has a chance to greatly assist the US friendly government in Columbia with another free trade agreement. If he doesn't push his party to get this done, terrorists (including those supported by Chavez and Castro) and drug cartels will gain the upper hand. Or Obama could just go with the advise of the union folks who raised so much campaign cash.

[Jim]

BG: Thanks, Jim, for affirming that only economists who agree with are genuine economists!

J: Agree with WHAT? Egad!

BG: (I knew you were an important guy, but did not realize how true economists grovel before you, and how enthroned you are in your own mind.)

J: Old Clarksy was important – see!
Knew all about economy...
His virtue – deep sagacity...
He understood reality.

The finance guys...they groveled – oh...
Right at his feet they trembled so –
Just he knew how to use their dough
To make their stocks and coffers grow.

Old Clarksy was enthroned...well, yes,
Right in his mind...that wise recess,
But when he genuflects to bless –
Gray matter splatters...what a mess!

Okay, I didn’t mention that in the middle of all that era of prosperity since WWII, Jimmy Carter and an overwhelmingly democrat-controlled Congress nearly did what Obama’s trying to do – turn the USA socialist, though he tried it another way – interest rates at 21% and rate of inflation in 1980 at 13.5%. The unemployment rate (7.5% in January 1981) reached 10.8% in September 1982 before Reagan fought it out successfully with Tip O’Neill and the democrats for years to get the economy back on track. That ended the malaise-thing, which the republican rednecks thought was actually something slathered on bread or dumped on lettuce. Their problem was that they were not enthroned in their own minds.

F: What I see in collinsville, alabama is among the poorest of the poor and politically weakest are Guatemalan peasant farmers who among other factors came this way cause Bush/Clinton/Bush Nafta policies had adverse effect on their small plot farming.
There they had a culture and status and community; albeit there was other political turmoil in the country.
I'm not an expert in the matter (obviously) but am fairly convinced NAFTA didn't help them at all.

J: In my town, the Guatemalans do tree-work and are well paid for it. One of my neighbors employs them, and I doubt that they’ve ever given NAFTA a thought.

[rickwright01]

Attempts to blame the worsening of the economy on President Bush are understandable but not persuasive.

A recent piece in the Wall Street Journal nails it.

As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama's policies have become part of the economy's problem.

Americans have welcomed the Obama era in the same spirit of hope the President campaigned on. But after five weeks in office, it's become clear that Mr. Obama's policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence -- and thus a longer period of recession or subpar growth.

The Democrats who now run Washington don't want to hear this, because they benefit from blaming all bad economic news on President Bush...

So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year's fourth quarter.

What is new is the unveiling of Mr. Obama's agenda and his approach to governance.

On Inauguration Day President Obama could indeed with a high degree of honesty say "we inherited this mess". Now this is without going into who/what caused this mess. More conservative participants on this forum have been quite candid in laying a chunk of the blame at the feet of President Bush and the once Republican Congress as well as on Democrats and their policies. Rampant deficit spending and addiction to pork (Republicans and Bush) and misguided government interference in the credit markets (Democrats). The irony is that in order to fix the problems these errors have generated we are going to...

Engage in rampant deficit spending (to the power of 3 or 4) and ramp up government interference in the economy. Ah well.

But that is besides the current point - which is that Team Obama can no longer with honesty say they inherited the exacerbation of the economic crisis. What happened after Inauguration Day is not something they inherited. It is something they have been causing.

The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they're no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.

Meanwhile, Congress demands more bank lending even as it assails lenders and threatens to let judges rewrite mortgage contracts. The powers in Congress -- unrebuked by Mr. Obama -- are ridiculing and punishing the very capitalists who are essential to a sustainable recovery. The result has been a capital strike, and the return of the fear from last year that we could face a far deeper downturn. This is no way to nurture a wounded economy back to health.

Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the weekend, we couldn't help but wonder if they appreciate any of this. They seem preoccupied with going to the barricades against Republicans who wield little power, or picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want.

Perhaps they're reading the polls and figure they have two or three years before voters stop blaming Republicans and Mr. Bush for the economy. Even if that's right in the long run, in the meantime their assault on business and investors is delaying a recovery and ensuring that the expansion will be weaker than it should be when it finally does arrive.

Personally I do not think this is an accident. I do not think economic recovery was or is the true goal of Team Obama.

Bruce - I appreciate that Krugman has a Nobel Prize in economics. So did Friedman. (Which is why arguments from authority are strong - I use them too - but also carry an inherent weakness.) And I have read quite a few economists who challenge Krugman's more recent pronouncements and with specifics.

[Bruce Gourley]

Attempts to blame the worsening of the economy on President Bush are understandable but not persuasive.

A recent piece in the Wall Street Journal nails it.

....

Bruce - I appreciate that Krugman has a Nobel Prize in economics. So did Friedman. (Which is why arguments from authority are strong - I use them too - but also carry an inherent weakness.) And I have read quite a few economists who challenge Krugman's more recent pronouncements and with specifics.

Rick, pointing to a WSJ opinion piece to prove that Bush is not responsible for the economic mess is like asking Barry Bonds if he took steroids ... the answer is a given.

My mention of Krugman, among other references, was a direct response to Jim's ridiculous assertion that no economist has ever blamed Bush for the economic mess. Economists are far from monolithic.

[Jim]

Attempts to blame the worsening of the economy on President Bush are understandable but not persuasive.

A recent piece in the Wall Street Journal nails it.

....

Bruce - I appreciate that Krugman has a Nobel Prize in economics. So did Friedman. (Which is why arguments from authority are strong - I use them too - but also carry an inherent weakness.) And I have read quite a few economists who challenge Krugman's more recent pronouncements and with specifics.

Rick, pointing to a WSJ opinion piece to prove that Bush is not responsible for the economic mess is like asking Barry Bonds if he took steroids ... the answer is a given.

My mention of Krugman, among other references, was a direct response to Jim's ridiculous assertion that no economist has ever blamed Bush for the economic mess. Economists are far from monolithic.

The best financial information possible is probably found in the WSJ, but not by people who worship the Anointed One, either because of their deep bias toward utopian socialism (pie-in-the-sky) or simple lack of understanding. Just during the eight years of the Bush presidency, the Nobel was awarded to three Americans who despise Bush, obviously, and have even railed against this country on foreign soil. Carter (2002) made it a practice whenever overseas to undermine this country and even dragged other world leaders into his tirades, such as when he described Tony Blair to the BBC regarding Bush as “Abominable. Loyal. Blind. Apparently subservient.” Gore (2007) was given a peace prize, though Gore has had nothing to do with the subject and though his film An Inconvenient Truth, may not be shown in English public schools unless the teacher informs the students that it is a political feature, not a scientific one, and points out at least nine glaring errors in it. So, Krugman naturally fit the pattern for 2008, and this is from Bloomberg:

On Feb. 11, 2005, he [Krugman] referred to Bush as ``someone who takes food from the mouth of babes and gives the proceeds to his millionaire friends.'' Over the top just a bit? Bush made it easier for millions of Americans to obtain medicine, but Krugman’s rhetoric is sophomoric.

Bush, with his plan to use tax credits to buy health insurance, is ``not even trying to hide his fundamental indifference to the plight of the less-fortunate,'' Krugman wrote on Jan. 22, 2007. Can anyone figure out this bit of silliness? Tax credits are used for relief in many areas.

Of the more than 800 Krugman pieces listed on the Times Web site since he became a columnist in 1999, almost 600 of them mention ``Bush,'' a search of the site shows. That just about says it all. That, alone, made Krugman a sure Nobel winner. Look in other places for financial experts.

[rickwright01]

Rick, pointing to a WSJ opinion piece to prove that Bush is not responsible for the economic mess is like asking Barry Bonds if he took steroids ... the answer is a given.

Yeah I had a feeling that might be the response. "Aw heck it's the Wall Street Journal. We can't believe a word they say". Dismiss the source and not engage the argument. That's a cheap response and leaves us wondering what sources you will accept. Come on bro - you can do better than this.

This is going to be... what... the third or fourth time I have had to make this point? Here goes:

More conservative participants on this forum have been candid and willing to lay a nice chunk of the blame at the feet of Bush 43 and Republicans in Congress. As well as specific actions and policies by Democrats. The Wall Street Journal piece (or other pieces one could quote) does not "prove that Bush is not responsible for the economic mess". Such misrepresents both the piece and my own post.

(I will repeat my challenge to more liberal and/or Democratic participants on this forum. If conservatives/Republicans are willing to blame Bush/Republicans as well as Democrats... then are they willing to concede how Democrats share responsibility for the crisis? Bi-partisanship and all that you know.)

I am going to lay this out one more time. If people want to engage this argument - fine. But I will not waste my time with anyone or with any post that does not at the very least represent accurately what we are really saying.

1. Democrats bear a significant portion of responsibility for the current crisis. (By interfering with the mortgage/lending industry. Failure to exercise proper oversight. Even when they were warned of an impending disaster.)
2. Republicans also bear a significant portion of responsibility for the current crisis. (Deficit spending. Addiction to pork. And what was President Bush smoking with the whole TARP/bailout thing?)
3. The Obama Administration did indeed inherit a recession (or "economic crisis" if you prefer). See #2 and #1.
4. Attempts by the Obama Administration to address the crisis are making it worse.

If Bush is largely responsible for the state of the economy on January 20...

Obama is (partly) responsible for the state of the economy since then.

Those who read carefully may note that I am being rather nice to President Obama in the previous sentence.

[Ed Pettibone]

Ed: Rick I pretty much agree with all you have said so far in this thread. but I think perhaps you are being overly generous (nice) when you say;

"If Bush is largely responsible for the state of the economy on January 20...

Obama is (partly) responsible for the state of the economy since then."

I am of the opinion that Obama's responsibility extends back to his congressional record and his far out promises during the Campaign, not just to the time he was sworn in.

[Bruce Gourley]

Rick, pointing to a WSJ opinion piece to prove that Bush is not responsible for the economic mess is like asking Barry Bonds if he took steroids ... the answer is a given.

Yeah I had a feeling that might be the response. "Aw heck it's the Wall Street Journal. We can't believe a word they say". Dismiss the source and not engage the argument. That's a cheap response and leaves us wondering what sources you will accept. Come on bro - you can do better than this.
I am going to lay this out one more time. If people want to engage this argument - fine. But I will not waste my time with anyone or with any post that does not at the very least represent accurately what we are really saying.

.....

1. Democrats bear a significant portion of responsibility for the current crisis. (By interfering with the mortgage/lending industry. Failure to exercise proper oversight. Even when they were warned of an impending disaster.)
2. Republicans also bear a significant portion of responsibility for the current crisis. (Deficit spending. Addiction to pork. And what was President Bush smoking with the whole TARP/bailout thing?)
3. The Obama Administration did indeed inherit a recession (or "economic crisis" if you prefer). See #2 and #1.
4. Attempts by the Obama Administration to address the crisis are making it worse.

If Bush is largely responsible for the state of the economy on January 20...

Obama is (partly) responsible for the state of the economy since then.

Those who read carefully may note that I am being rather nice to President Obama in the previous sentence.

Let me try this ...

I read (daily) the Wall Street Journal (I also read regularly the New York Times (Biz Section), Business Week, Business 2.0, Forbes, Entrepreneur, Fortune, Money, Fast Company, Inc Magazine, and a few others.

Now, if anyone in these forums reads more business newspapers, journals and magazines ... raise your hand, please.

Why do I read so much business stuff?

Because (among other things) I am a long time entrepreneur, business owner, and marketing consultant. And at times, I have been an employer. Is anyone else on these forums an entrepreneur? A business owner? A marketing consultant? An employer? If so, please raise your hands.

I say all that to say ... my opinions are informed both by (long-time) reading and (long-time) practice in the profession of business. I think (correct me if I'm wrong) that a lot of economic views I've heard herein in are in theory only ... not practice, in terms of the business community.

Now, it is a no-brainier to say that economists are not monolithic.

As to your points #1-3 above, I don't really disagree: see a link I've previously provided.

As to your fourth point above: your statement might be true only if you are speaking to the moment. Any economist worth his salt, however, takes into account the long view.

Now, as to Obama's economic agenda.

Speaking from the perspective of an entrepreneur, business owner, marketing consultant and employer:

1) It's doggone time to stop redistributing wealth to the wealthy. I resent subsidies (my tax dollars!) given to big corporations (including big oil), the fact that some 60% of all American businesses (including some of the biggest corporations in the world) pay no income tax because of loopholes, I resent the growing wealth gap between the rich and poor, I resent the fact that tens of thousands of the richest Americans have for years been sheltering their largess in Swiss banks, I resent the fact that the Bush administration has broadly dismantled regulation of a variety of commercial sectors, I resent the fact that the Bush and Cheney handed untold hundreds of millions of tax dollars to cronies in the oil and various industries for subcontracting in Iraq (who then turned around and did not do their jobs, yet the government just handed them more of my money), and so on. The operation of the government, for too long, has been dictated by the big business community, whose primary interest is the bottom line (including the taking of my tax dollars), rather than ethics, honesty, and even patriotism.

2) Health care: please, please, please, please, Mr. Obama ... move our country toward socialized health care! The health care industry is run amok, is the most inefficient and expensive of any nation in the western world, and allows insured people to die by obfuscation, denial of choice, and refusal of claims. It is a disgrace to American ideals, inhumane, and a pro-life issue. Raise my taxes, Mr. Obama, and provide me (and any future employees, my neighbors, everybody!) with socialized health care! Right now, I have to pay so much for my (very minimal) health insurance plan that I am paying about as much for (family) health care that I am in federal taxes. It is a disgrace.

3) The bailouts, the stock market, and the financial sector: it stinks. As a businessman, I shook my head in disbelief when a failed businessman who took used tax dollars to build a baseball stadium, was elected as president of the United States! From what I can tell of Bush's string of business failures, and all his tax subsidies aside, I've probably generated more actual profits in my small business than he did in all his business ventures. It was no surprise to me when he started redistributing my tax dollars to big business, the oil industry, and other commercial interests. And it is no surprise that his free-spending ways led to a national financial collapse. As to Democrats of the past decade, you didn't exactly step up to the plate and put a stop to the nonsense. As to fixing this mess, Reagan's anti-government pro-business era (taken up by Republicans since then) is nonsense. I'm enough of a businessman to know that what is best for the corporate bottom line is often not good for the country as a whole, simply because greed is the engine of capitalism. Yes, some of my fellow businessmen (and some economists) argue that harnessed greed is good. But I've watched too many of my fellow businessmen sacrifice integrity, employees and country to line their own pockets (I can also point to a number of businessman who really do care about more than their bottom line, who are not greedy). Taking tax dollars while refusing to raise minimum wage is characteristic of an attitude of greed. Allowing tax cuts to trickle down to the common worker and common man is a joke among many of my fellow businessmen who are more concerned about their own bottom line. On the other hand, some other (especially small scale) businessmen, who are not recipients of tax payer dollars, work like dogs to make ends meet and pay their employers a fair wage.

So what should you do about this mess, Mr. President? Make greed less fashionable. Make failed businesses swallow some bitter pills. Make wealthy business owners and executives (and politicians!) actually pay their taxes (raise their taxes if need be, and for America's sake, stop shoveling my tax dollars their way!). Regulate, regulate, regulate. Award integrity, honesty and justice in the business sector, not greed. Rebuild our American economy around a culture of integrity, honesty and justice, not greed. In short, inject a very healthy dose of responsibility and oversight into corporate America. All of this will help me as an entrepreneur and businessman and an American, as well as restore some credibility to America.

4) The housing crisis: Mr. Obama, do you have any idea how much of a loan several banks tried to talk me into taking out to buy a house? Such financial idiocy is (was) outrageous, and should be illegal. Reform the mortgage industry, pronto. Find some way to remind the American consumer that greed is not a virtue, and will lead to ruin. If it means taking a few of my tax dollars to do, so be it.

In short, I'm ready for some short term pain in order to bring my country back to its senses. I'm ready to pay more taxes in order for America to ensure that we all have health care. And for the sake of our country, it is time to stop redistributing wealth to the rich and powerful.

Now, that's my opinion as an entrepreneur, businessman, marketing consultant and employer. Would anyone else with similar experience like to offer their own "on the ground" perspective?

[Jim]

BG: Because (among other things) I am a long time entrepreneur, business owner, and marketing consultant. And at times, I have been an employer. Is anyone else on these forums an entrepreneur? A business owner? A marketing consultant? An employer? If so, please raise your hands. ... Now, that's my opinion as an entrepreneur, businessman, marketing consultant and employer. Would anyone else with similar experience like to offer their own "on the ground" perspective?

J: This means, of course, that no one who hasn’t been an entrepreneur, businessman, marketing consultant and employer should even have an opinion, much less express it. According to at least two bios I’ve read on the Internet, Krugman is not and has never been an entrepreneur, businessman, marketing consultant and employer. Does this mean that you should no longer pay any attention to him?

[Haruo]

BG: Because (among other things) I am a long time entrepreneur, business owner, and marketing consultant. And at times, I have been an employer. Is anyone else on these forums an entrepreneur? A business owner? A marketing consultant? An employer? If so, please raise your hands. ... Now, that's my opinion as an entrepreneur, businessman, marketing consultant and employer. Would anyone else with similar experience like to offer their own "on the ground" perspective?

J: This means, of course, that no one who hasn’t been an entrepreneur, businessman, marketing consultant and employer should even have an opinion, much less express it.

No it doesn't, and it's inflammatory to suggest that it does mean that. Bruce is not saying everybody shut up, I'm the entrepreneur here. He is saying that he is an entrepreneur, that his (pro-Obama) opinions and positions vis-à-vis Obama's policies and the current economic situation and his hopes and prognostications for the future are those of an (not every) entrepreneur etc, and are informed by much reading of business journalism; far from saying no one else should have or state an opinion, he welcomes them (why else would he host a board like this??) and would especially welcome one from a person who shares his entrepreneurial etc status/background but has a different take on the government and the economy.

I don't know why you sometimes feel impelled to draw such blatant and flagrant misinterpretations out of folks, Jim.

[Jim]

BG: Because (among other things) I am a long time entrepreneur, business owner, and marketing consultant. And at times, I have been an employer. Is anyone else on these forums an entrepreneur? A business owner? A marketing consultant? An employer? If so, please raise your hands. ... Now, that's my opinion as an entrepreneur, businessman, marketing consultant and employer. Would anyone else with similar experience like to offer their own "on the ground" perspective?

J: This means, of course, that no one who hasn’t been an entrepreneur, businessman, marketing consultant and employer should even have an opinion, much less express it.

No it doesn't, and it's inflammatory to suggest that it does mean that. Bruce is not saying everybody shut up, I'm the entrepreneur here. He is saying that he is an entrepreneur, that his (pro-Obama) opinions and positions vis-à-vis Obama's policies and the current economic situation and his hopes and prognostications for the future are those of an (not every) entrepreneur etc, and are informed by much reading of business journalism; far from saying no one else should have or state an opinion, he welcomes them (why else would he host a board like this??) and would especially welcome one from a person who shares his entrepreneurial etc status/background but has a different take on the government and the economy.

I'm still laughing. You make my point so much better than I could have hoped to make it. Take a coupla aspirin and lie down for a while. Obama also has never been an entrepreneur, businessman, marketing consultant and employer, so maybe he should just keep quiet, too, about things financial.

I don't know why you sometimes feel impelled to draw such blatant and flagrant misinterpretations out of folks, Jim.

When they make it so easy, it's not hard, believe me! Actually, the devil makes me do it.