Weekly Letter to President Obama
Copyright © 2010
ofthisandthat.org. All rights
INAUGURATION, January 20, 2009
Drunk in its stale air
For two hundred years.
Fettered in mind and body,
The soul, the safe escape
To let me breathe the cries
Of my heart singing
Tears of mel-an-choly.
The tears flow free today
Washing the stains of blood
And sweat in brotherhood.
Raise the curtain then an'
Let the world look in
On this promised land --
We breathe free today.... almost.
--- Arshad M. Khan
We will be known forever by the tracks we leave.
--- Native American proverb
September 2, 2011
The latest jobs report released today is about as bad as it could be -- no new
jobs created in August (a first since WWII) and a revision downwards of the
jobs created in July from 117,000 to 85,000. The debt ceiling bill limits
effective fiscal expansion while near zero interest rates mean monetary
policy has run its course. It is worth noting half of the Democrats in the
House, despite all the pressure, voted against this bill versus just a third of
Republicans. So exactly what or who does this administration represent?
And what economic tools remain to right this teetering economy?
We, of course, continue to hear the "cutting spending, taxes, regulation and
big government" mantra. If one asks their followers what the highest
marginal tax rates were in the booming fifties and sixties, they don't know.
And informing them meets with disbelief.
As far as onerous regulation and big government, we have had a
deregulation binge since the Reagan years. Letting loose the Savings and
Loans led to a debacle costing us $386 billion, and gutting Glass-Steagall has
brought us into the current crisis. The cost to the public is a horrendous
recession with a real jobless rate double the advertised 9.1 percent figure
that excludes job seekers who have given up trying after many years.
The cutting spending tool is a myth that even a conservative body like the
IMF finds to be rarely effective. Out of 15 advanced economies analyzed for
the years 1980 through 2009, their 2010 World Economic Outlook reports that
in only two instances Denmark in 1983 and Ireland in1987 did cutting
spending have an expansionary effect. In general they observed that fiscal
consolidation, i.e. cutting spending, of "1 percent of GDP typically reduces
GDP by about 0.5 percent within two years and raises the unemployment rate
by 0.3 percentage point ... and demand falls by about 1 percent".
All one can ask, Sir, is why you have chosen to make the most vulnerable in
our society, the old and the sick, the Social Security and Medicare
recipients, to pay for the follies of the rich, and why you have not been able
to advance the arguments outlined above to fight for a saner economic
policy -- a policy that would in all likelihood increase your re-election
Some are whispering rather loudly that it's the donor syndrome. All I can say
is you are in deep trouble if the Republicans put up a halfway decent
candidate. For many people, noting all your election promises cast aside,
taking a flyer on a Republican and hoping his electioneering vows will go the
same way, is becoming very attractive.