Obama faces the problem of success
The stock market finally had a positive week. It may have helped that the White House finally had some good words for the economy, after weeks of preaching crisis and disaster. More likely, the runup was due to good news from CitiGroup, Bank of America, and JP Morgan Chase. Some have already begun to say we’re coming out of the “worst recession since WWII“. Peter Orszag said on Sunday morning, “the economy is fundamentally strong.” Funny, then-candidate Obama lambasted McCain for saying exactly the same thing. And a lot of people have lost jobs since then. But Obama has put himself between a cliff and a wall, and the road ahead is getting narrower all the time.
If Obama continues to talk down the economy, then it’ll continue to perform poorly. Clearly, if his massive spending agenda doesn’t pull us out of the downward trend, voters will look elsewhere for solutions.
If Obama proclaims “the worst is over” then folks will wonder why we’re on the hook for $783,000,000,000 in stimulus that hasn’t yet kicked in. We haven’t even started getting our $13 a week, and the economy is recovering? Then cancel that stimulus plan! If the economy improves soon, then it will be clear that monetary policy, along with the innate productivity of the markets, fixed the economy despite Obama’s bumbling interference.
Worse for Obama, if the economy starts to improve, he can no longer use the crisis as cover for his cap and trade plan and health care plan.
Fortunately for him, he’s pretty much guaranteeing continued erratic performance from the economy, at best. Why? Because he’s successfully appointed only 1 person at Treasury to deal with “Job 1“. Right now, Geithner is the only Obama appointee in the building. And 4 nominees have backed out of the appoinment process. With that many open spots, Treasury will have a difficult time doing normal business, much less coming up with a wonder-plan to pull troubled assets out fo banks.