Archive for February, 2009
Makin' Sausage
Those who consider Obama's budget will naturally keep in mind Otto von Bismarck's famous warning to lovers of laws and sausages not to watch either being made. We need some high quality sausage making here because, as foreshadowed in his speech to Congress, Obama's budget is audacious. Obama runs the deficit up to $1.5 trillion [...]
King of the World
Was it just me, or did Barrack Obama give an astonishing speech to Congress last night? Of course it was "sober" and "encouraging", as pundits had promised. And it was eloquent, as most sentences this guy utters tend to be. But it was also audacious. Faced with the closest thing to global economic collapse that [...]
Can Ron Bloom Save the US Auto Industry?
As mentioned in an earlier post, I think very highly of Ron Bloom, the Steelworker Financial adviser just named by President Obama as the non-czar car czar. Ron and Diana Farrell of the National Economic Council will head up the task force that will oversee the restructuring of our car companies. Both are first-rate appointments. [...]
Irrational Exuberance
Speculative bubbles are caused by contagious excitement about an investment, whether it is dot-com stocks, Dutch tulips, or California houses. Bubbles are hard to see when you are in the middle of them — and hard to resist even if you see them. Fed chairman Alan Greenspan said that sky high dot-com stocks reflected "Irrational [...]
Bicentennial of Heroes
Today two of my heroes celebrate their 200th birthdays. Charles Darwin and Abraham Lincoln were both born on February 12, 1809. Neither Lincoln nor Darwin were especially popular during their lifetimes and for different reasons, both were often caricatured as apes. Lincoln may be remembered as our greatest President, but he was also one of [...]
To Win in Afghanistan, Buy the Opium Harvest
The United States is losing two wars — the war on drugs and the war in Afghanistan. The politics of these wars is complex but the economics is simple: the bad guys make a killing on drugs that are highly profitable only because they are illegal. Our solution has been to try to eradicate the [...]
Economic Collapse: Understanding the Triple Whammy
We are in the middle of three economic crises. Although it would be preferable to handle and attack of food poisoning, a vicious cold, and the flu separately, we got all three at the same time. The patient is feverish, heaving, and has not yet seen the worst of it. They are related economic diseases, [...]
Terrible Tuesday (Revised)
It is not easy to lose control of your central economic initiative (the stimulus) and compromise your central domestic initiative (health care) in one day. Obama ended up declaring that he had "screwed up" before the central thesis of his administration (change we can believe in) went down with it. It did not make a [...]
