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February 02, 2009

Beware of Obama's "New Deal" - It Didn't Work the First Time

Most on the Left and much of the media is hailing the Obama prompted stimulus plans heading through Congress at warp speed as the solution to our economic problems - a modern day "New Deal". But the dirty little secret about the New Deal is that it didn't work - it actually prolonged the Great Depression. Shouldn't that give us all pause?

The true story of the failure of the New Deal has been covered recently in two great books, Liberal Fascism by Jonah Goldberg and The Forgotten Man by Amity Shlaes. The both point out that the New Deal was really a case of social engineering by liberal political elites and propaganda rather than an attempt to provide economic relief to the nation as quickly as possible. In fact, had World War II not intervened, the Great Depression might have lasted well into the 40s or beyond, unless many aspects of the New Deal were repealed.

Today in the Wall Street Journal there's an even better brief on the failed economics of the New Deal by two respected economists, Harold L. Cole of the University of Pittsburgh and Lee E. Ohanian of UCLA, How Government Prolonged the Depression. It's a must read, since Obama and the Democrats are attempting to do a similar thing today.

The New Deal is widely perceived to have ended the Great Depression, and this has led many to support a "new" New Deal to address the current crisis. But the facts do not support the perception that FDR's policies shortened the Depression, or that similar policies will pull our nation out of its current economic downturn.

...Why wasn't the Depression followed by a vigorous recovery, like every other cycle? It should have been. The economic fundamentals that drive all expansions were very favorable during the New Deal. Productivity grew very rapidly after 1933, the price level was stable, real interest rates were low, and liquidity was plentiful. We have calculated on the basis of just productivity growth that employment and investment should have been back to normal levels by 1936. Similarly, Nobel Laureate Robert Lucas and Leonard Rapping calculated on the basis of just expansionary Federal Reserve policy that the economy should have been back to normal by 1935.

So what stopped a blockbuster recovery from ever starting? The New Deal. Some New Deal policies certainly benefited the economy by establishing a basic social safety net through Social Security and unemployment benefits, and by stabilizing the financial system through deposit insurance and the Securities Exchange Commission. But others violated the most basic economic principles by suppressing competition, and setting prices and wages in many sectors well above their normal levels. All told, these antimarket policies choked off powerful recovery forces that would have plausibly returned the economy back to trend by the mid-1930s.


It's a frightening history lesson that none - none - of us learned in school, where we were taught to worship at the altar of FDR. Which is the same altar that we are now being told to worship Barack Obama at.

What's the old quote, those who forget history are doomed to repeat it?

Well, It Looks Like Obama's Overture to Iran Went Swimingly...

One of the top rules in business and politics is to never show weakness, especially to your enemies. With 24 hour news cycles and the Internet, it's too easy for any show of weakness to become the new defining meme about your business, your candidacy, your government, or even you as an individual.

If President Barack Obama had ever had a real job in the real world, perhaps he'd know this. But he didn't, so he's going to have to learn the hard way.

Lesson #1 just came courtesy of Iran. That particular country is our enemy - and has been our enemy since 1979. It actively engages in the sponsorship of terrorism, kills our soldiers, and slaughters innocent unarmed civilians across the world. It's vowed the destruction of our ally Israel, ignores the laws and will of the international community and will soon have nuclear weapons.

But President Obama has determined that if we act nicer towards Iran all of the problems with that country will magically disappear. So he's instructed that we bypass the international community and hold direct talks with Iran. For what purpose, or what we will offer Iran in such talks, remains unclear.

So how did that go over with Iran? Not so well. Predictibly, Iran views this overture as a sign of weakness, and is making the most of it.

US President Barack Obama's offer to talk to Iran shows that America's policy of "domination" has failed, the government spokesman said on Saturday.

"This request means Western ideology has become passive, that capitalist thought and the system of domination have failed," Gholam Hossein Elham was quoted as saying by the Mehr news agency.

"Negotiation is secondary, the main issue is that there is no way but for (the United States) to change," he added.

After nearly three decades of severed ties, Obama said shortly after taking office this month that he is willing to extend a diplomatic hand to Tehran if the Islamic republic is ready to "unclench its fist".

In response, Iranian President Mahmoud Ahmadinejad launched a fresh tirade against the United States, demanding an apology for its "crimes" against Iran and saying he expected "deep and fundamental" change from Obama.

Iranian politicians frequently refer to the US administration as the "global arrogance", "domineering power" and "Great Satan".

Tensions with the United States have soared over Iran's nuclear drive and Ahmadinejad's vitriolic verbal attacks against Washington's close regional ally Israel.

Former US president George W. Bush refused to hold talks with the Islamic republic -- which he dubbed part of an "axis of evil" -- unless it suspended uranium enrichment, and never took a military option to thwart Tehran's atomic drive off the table.


What Obama has done is show weakness to a country that is our primary enemy in the world right now. That strengthens, not weakens, Iran and its regime. Iran will use this as a go-ahead signal to complete their nuclear program, which will then be used to outfit their terrorist organization proxies with nuclear weapons. I'd anticipate a nuclear strike in Israel soon after, followed by strikes against our military bases in the Middle East. Wouldn't be surprised if Iran then attempted a nuclear terrorist strike within the United States, either.

Is all of the above guaranteed to happen? No, but if your primary responsibility as President of the United States is to protect the country and its interests, you have to think that way, especially when dealing with a proven intractable enemy. Otherwise, you end up with 9/11.

Well done, Mr. President.

January 22, 2009

Obama Outlaws Legal Interrogation Methods - Or Does He?

President Obama signed a few 'National Security' Executive Orders around noon today, apparently designed to increase the rights of illegal combatants - terrorists - that are trying to kill as many of us as possible. They were all remarkable, but perhaps the most troubling is the order on interrogation techniques for detainees in the War on Terror.

That particular Executive Order, which has not been posted online yet (2:00PM), proclaims that the only interrogation methods to be used on detainees in the War on Terror are those found in the Army Field Manual (pdf file - not sure if available in Arabic...yet). As media reports are already starting to show, that's a bit problematic:

The executive order says everyone in custody should be questioned under the Army Field Manual, which is intended for honorable combatants, meaning POWs in a military conflict. The rule would prevent trained interrogators at the CIA from using lawful interrogation techniques against terrorists who have been trained to withstand Army Field Manual techniques.


So by this particular order, Obama is not outlawing so-called torture of detainees, but preventing the use by our national security apparatus of certain legal interrogation techniques that have kept us safe for the past 7+ years.

But as with anything emanating from first Obama the candidate and now Obama the President, that's not the whole story. In fact, in many ways this Executive Order can be seen as an empty sop to the Left that got him elected. Why do I say that? Because in the same media report, there is this tidbit:

According to sources in the law enforcement community, the executive order on interrogation does not declare "enhanced interrogation techniques" to be torture; the order is silent on that.

"This allows for a lot of flexibility, a lot of wiggle room," said one source.

While the administration has insisted on one interrogation standard, one source says they are thinking about assembling a group within the next 60 days to make recommendations on a set of separate techniques for the intelligence community to use.

White House counsel Greg Craig acknowledged late Wednesday that the administration will have to establish a panel to make recommendations to address intelligence community concerns.


As Jim Geraghty of NRO is fond of saying, "All Barack Obama statements come with an expiration date. All of them."

I guess that's going to include Executive Orders...

Interesting Factoid - Reagan's Inauguration Had More TV Viewers

According to The Hollywood Reporter's James Hibberd, Ronald Reagan's Inauguration - in 1981 - had more TV viewers than the just concluded Inauguration of President Barack Obama (Obama's inauguration most-watched since Reagan's).

Reagan had 41.8 million TV viewers, whereas Obama had 37.8 million.

But that's not even as impressive as it sounds for Obama, especially when you consider that:

Obama's total includes telecasts on 17 broadcast and cable networks and measures the number of viewers who watched from 10 a.m.-5 p.m. The swearing-in ceremony itself spiked viewership considerably just after noon.

What Hibberd should have gone on to say was that in comparison, Reagan's Inauguration was seen on only three networks over a much shorter period of time. But that wouldn't fit in with the narrative...

January 20, 2009

Barack Obama Sworn In As 44th President of the United States

Barack Obama has just been sworn in as the 44th President of the United States. Pretty remarkable, all in all. Here's the text of Obama's Inaugural Address, as prepared for delivery, courtesy of the Washington Post:

My fellow citizens:

I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and cooperation he has shown throughout this transition.

Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents.

So it has been. So it must be with this generation of Americans.

That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land - a nagging fear that America's decline is inevitable, and that the next generation must lower its sights.

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met.

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted - for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things - some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.

For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth.

For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn.

Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.

This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions - that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act - not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do.

Now, there are some who question the scale of our ambitions - who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

What the cynics fail to understand is that the ground has shifted beneath them - that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public's dollars will be held to account - to spend wisely, reform bad habits, and do our business in the light of day - because only then can we restore the vital trust between a people and their government.

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control - and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart - not out of charity, but because it is the surest route to our common good.

As for our common defense, we reject as false the choice between our safety and our ideals. Our Founding Fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience's sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort - even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan. With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet. We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.

For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus - and non-believers. We are shaped by every language and culture, drawn from every end of this Earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West - know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.

To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.

As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us today, just as the fallen heroes who lie in Arlington whisper through the ages. We honor them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves. And yet, at this moment - a moment that will define a generation - it is precisely this spirit that must inhabit us all.

For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.

Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.

This is the price and the promise of citizenship.

This is the source of our confidence - the knowledge that God calls on us to shape an uncertain destiny.

This is the meaning of our liberty and our creed - why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.

So let us mark this day with remembrance, of who we are and how far we have traveled. In the year of America's birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:

"Let it be told to the future world...that in the depth of winter, when nothing but hope and virtue could survive...that the city and the country, alarmed at one common danger, came forth to meet [it]."

America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.


Celebrate today. The real work - for all of us - begins tomorrow.

January 15, 2009

Obama Backtracks on Osama Bin Laden, Agrees With Bush

For years the Democrats have been critical of the Bush Administration for failing to kill or capture Osama bin Laden. In fact, Barack Obama made such criticism one of the central parts of his campaign for President - moreover, he promised both before and after his election that his "number one national security priority" would be to end bin Laden's 'freedom', one way or another (Obama administration to ratchet up hunt for bin Laden):

President-elect Barack Obama wants to renew the U.S. commitment to finding al Qaeda leader Osama bin Laden, according to his national security advisers.

The Obama team believes the Bush administration has downplayed the importance of catching the FBI's most-wanted terrorist because it has not been able to find him.

"We will kill bin Laden. We will crush al Qaeda. That has to be our biggest national security priority," Obama said during the presidential debate on October 7.


But, as with most (if not all) statements by President-elect Obama, that was apparently a convenient lie to be used to get elected. He now seems to think that what the Bush Administration has done for the past seven years - isolating bin Laden to keep him from serving as little more than a figurehead for his terrorist organization and focusing more on whittling down Al Qaeda's operational capabilities and exterminating its members - was and is the correct approach. From an article in The Times Online, the web site of the London newspaper (Barack Obama: it is no longer essential to kill Osama bin Laden):

Barack Obama suggested last night that removing Osama bin Laden from the battlefield was no longer essential and that America's security goals could be achieved merely by keeping al-Qaeda "on the run".

"My preference obviously would be to capture or kill him," he said. "But if we have so tightened the noose that he's in a cave somewhere and can't even communicate with his operatives then we will meet our goal of protecting America."

His comments, in a CBS interview, represent a significant watering down of the "dead or alive" policy pursued by President Bush since the terror attacks of September 11, 2001. They also appear to contradict Mr Obama's own statements made in the election campaign.

As recently as October 7, in a presidential debate, Mr Obama said: "We will kill bin Laden. We will crush al-Qaeda. That has to be our biggest national security priority."

Yesterday, the President-elect adopted far less aggressive language, saying his "No 1 priority" was to protect America from further attack.


Hmmm. The Bush Administration, as the article says, has always wanted to kill or capture bin Laden. After bin Laden was allowed by the Northern Alliance (with our inadvertent but foreseeable to anyone with a brain acquiescence) to escape Tora Bora, they have been unable to do so, primarily because of where bin Laden fled to. I suppose flattening a few mountain ranges in Pakistan's tribal regions with nuclear weapons would have done it, but that route wasn't taken.

Instead, the Bush Administration has been quite successful in keeping bin Laden and his closest minions in a virtual prison, unable to function in any leadership role with Al Qaeda. That fact, however, didn't stop the Democrats, the left, and Obama himself from literally mocking President Bush for not 'getting' bin Laden.

Now, however, Bush's position is going to be Obama's.

Where's the "change"? Where's the "outrage"?

Where's the media saturation coverage of this flipflop?



January 09, 2009

Few In The Media Admit That Obama Is Using Scare Tactics

Every morning I receive the e-mail notification of that day's ABC New's "The Note" political newsletter. This morning's edition came as I was reading the transcript of yesterday's speech on the economy by President-elect Barack Obama, which can be found here.

Contrary to the drive-by media's review, the speech - billed as Obama's first major one since the election - is merely another one from his endless campaign, and a poor one at that. Long on the rhetoric of fear and short on specifics, many points and phrases seem to be culled from a Washington Post commentary by Lawrence Summers, dated 12/28/08, Obama's Down Payment - A Stimulus Must Aim for Long-Term Results.

I was struck not only by the absence on any intellectual heft in Obama's speech, but also by its fear-mongering. Disturbingly similar to the tone that we saw from Treasury Secretary Hank Paulson in September on the financial services bailout, the President-elect warns us that the end is nigh, and unless we act quickly to approve upwards of a trillion dollars in government spending without adequate review by those taxpayers who are responsible for paying for it, the world will end. Scare tactics, pure and simple.

Obama's speech was so negative that I wondered if any of his friends in the media would criticize him for it, as they criticized other Presidents like Presidents Bush and Reagan in the past when they alerted the nation to economic trouble. Instead, for the most part, I found apologies thinly veiled as 'news articles' (Obama Cites Grim Economy At Start, as Past Presidents Have).

But the e-mail that I received from "The Note" this morning surprised me by calling out Obama on what he really was doing:

Barack Obama is using scare tactics as a sales pitch for fast action, but he's meeting immediate resistance from leaders in his own party, as he pushes a massive stimulus bill that's rich with tax cuts, ABC News senior political reporter Rick Klein writes in Friday's Note


And when you go to the actual column itself, The Note, 1/9/09: Obama Pressed From Left on Stimulus, you find not only an accurate summary of what Obama was trying to do, but also an acknowledgment that Obama hasn't even produced one scrap of paper showing what his plan looks like:

It turns out you don’t have to look very hard to find the fault lines in President-elect Barack Obama’s bid for a massive stimulus bill. He tried to scare Congress into acting quickly on Thursday -- and more pressure is coming Friday and beyond -- but there’s still no measure to act on, or even the outlines of one.


It can be argued that the recent bailouts have done nothing to 'save' the economy. They just served to save some favored financial businesses, and punish others. From the precious little we know about Obama's bailout, his plan is going to be a giant modern day TVA, this time designed to enlarge unions. Again, favoritism. This time designed for an electoral advantage.

President-elect Obama has rightly kept his mouth shut over foreign policy issues prior to assuming office. By the time his stimulus package is released, he will probably wish that he had kept his mouth shut about the economy as well.

January 08, 2009

Obama Prepares the Electorate for 2010

There's a fascinating post by James Pethokoukis over at U.S. News & World Report's "Capital Commerce" blog titled Why Obama Will 'Own' the Recession. Pethokoukis shows the extent that Obama (and the media, for that matter) has been going to "Hooverize" the outgoing President Bush - laying the entire blame for this recession at his feet. By doing so, and by prepping the American public for a lengthy and painful recession, the author feels that the President-elect is laying the foundation for the Democrats' platform in 2010 - namely, that Bush left this country in such a mess that the Dems can't be held liable for failing to fix it in 2 years:

For eight decades, Democrats have successfully blamed Republican Herbert Hoover for the decade-long Great Depression. That, even though Franklin Roosevelt's New Deal failed to restore prosperity or dramatically lower unemployment, and his tax increases in 1937 snuffed out a nascent recovery.

Now today's Obamacrats are apparently going to try and Hooverize President Bush in an effort to shield themselves from the potential political fallout of a prolonged recession. It will take years to fix the American economy, Obama says, and years of trillion-dollar budget deficits to do it. And everyday it seems that Team Obama tries to lower economic expectations, such as bearishly predicting that unemployment would hit double-digits.

The not-so-subtle message in the middle of all these pessimistic prognostications: When ya'll go to vote in 2010 and 2012 and a) unemployment is still as high as it's been in decades, b) income growth is sluggish at best, c) the budget deficit is running at a trillion bucks a year, and d) stock prices remain stubbornly low -- hey, don't blame us, you can't rebuild Rome in a day or even in a first term. Remember, Bush really left us a mess.

The incoming administration has apparently learned the  lesson of Bush's big mistake when arguing for the Iraq War, that when embarking on a decision that will define your presidency, it's better to underpromise and overdeliver. Of course, Obama has every reason to honestly believe the economy is going to stay on the mat for a good long time. According to the just-released minutes from the Federal Reserve's December meeting, the central bank now thinks the economy will "decline for 2009 as a whole" and that the jobless rate is "likely to rise significantly into 2010." And in its new forecast, the Congressional Budget Office said the U.S. economy is now in a recession that "will probably be the longest and the deepest since World War II." What's more, the CBO says, the economy will shrink 2.2. percent this year and grow a wimpy 1.5 percent next year as unemployment exceeds 9 percent. Finally, respected Harvard University economist Kenneth Rogoff just released a paper demonstrating that the aftermaths of financial crises are usually marked by "deep and lasting effects on asset prices, output and employment. Unemployment rises and housing price declines extend out for five and six years, respectively." So the consenus is gloomy.


Pethokoukis, however, doesn't think that this will be successful, even with the help of the drive-by media. He feels, correctly, that Obama and the Democrats will be tampering with the economy so much, especially in the next few months, that if immediate results aren't apparent, voters will start to blame the Dems - if not Obama himself.

For the record, I don't blame Bush for the recession - I blame Congress, especially the Democrats, for meddling in housing and lending practices. This whole mess was created by the housing collapse. Well documented efforts to stave off that collapse by the Bush Administration, which was caused by too easy credit to unqualified borrowers, was stopped in its tracks by the Democrats in Congress, along with more than a few cowardly Republicans - all afraid of being called "racists".

If the housing market had remained healthy, or if it had followed the normal cyclic nature of housing booms and busts of the past, none of the present mess would have occurred.

I do blame the Bush Administration for abandoning free market economics from September 2008 until now, something that the Obama Administration seems intent on continuing.

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