Today's Guests:
Dr. Christina Romer who chairs the President's Council of Economic Advisers.
Former Fed Chairman, Alan Greenspan, Governor Jennifer Granholm (D-Michigan), 2008 Republican Presidential Candidate
and former Massachusetts Governor, Mitt Romney, and the Host of CNBC's Mad Money, Jim Cramer.
And you thought Afghanistan was a quagmire? Judging from every answer, or non-answer, from all of today's guests, the one thing we do know is that no one wants to get into this swampy mire of an economy above the hip. With all due respect to Dr. Christina Romer, she had the skill of a seasoned politician when it can to giving a straight answer, she didn't... or maybe couldn't. And that's the thing with the U.S. economy, it makes the Afghan War seem predictable.
However, when she said that the Administration hit this recessive economy with everything it could get through Congress, I take her at her word. The Obama Administration instituted a tax cut for 95% of middle class families. Then there was the first home buyer tax credit, small business tax breaks for hiring, and cash for clunkers of course to name a few. Staying with taxes for a minute, Mr. Gregory hammered Ms. Romer on the question of taxes because it is a key factor in how the government is going to pay for everything. The reason it is a non-answer because as Ms. Romer stated, you can not raise taxes during the recession we're in. However, you can not lower them to the extent the Republicans want, breaks in which only the top of the monetary food chain truly take advantage of. To fully recover, tax breaks in the short term are a good helping fixer, but eventually they are going to have to go up. It's a hard truth that no politician can utter unless the increase is direction at the super rich. And unfortunately for this column, Jim Kramer on today's program said that same thing so now we have to agree with him on this point, something that gives us no pleasure.
The Administration has floated the idea of a second T.A.R.P. program, but taxing some one some where is a necessity for this to happen. And as Mr. Gregory pointed out via the op-ed in the Los Angeles Times, aren't we getting ahead of ourselves since we've only doled out 20% of the initial T.A.R.P. allocation? It is and people do cry about the size of the initial fund saying it was too much so how could you even consider another. Well, economist Paul Krugman has stated that the initial amount was too little. Realistically, the amount was too small, but politically it was way too much.
[It always strikes this column as funny to think that when the Obama Administration raised the richest 1% of the population's taxes from 36 to 39%, ordinary folks called him a socialist. If that's true then Eisenhower was a communist. Just plain silly.]
The other key question of the program was if the recovery, when it comes, would be a jobless one? Another question that no one is willing to answer because the inclination is that it will, in fact, be a recovery where many jobs are not replaced. Dr. Romer is disqualified from anything reliable as she was one of the ones who said with the T.A.R.P. enacted, unemployment would go above 8% - well, we're at 10. Knowing that Mr. Gregory asked her if unemployment would be a 5% within a year? Again, she didn't answer but THE ANSWER is no way - 7% if we're lucky.
But who the hell knows? If you ask a Democratic State Governor, like Jennifer Granholm of Michigan, she'll say the what the administration is doing is the right thing. She mentioned the Chevy Volt being in production putting Michigan residents to work along with re-tooling some manufacturing in the state from auto to wind turbines. However, if you ask Mitt Romney, former Republican Governor of Massachusetts, he tells you that the stimulus grew the government and not the economy - a jobless stimulus.
Actually, what he is saying is true, but he doesn't truly know why he's right. The stimulus didn't actually grow government as much as it headed off the municipal meltdown that many states would have experienced forced to lay off teachers, firefighters, policeman and countless others - hence sustaining the levels of employment. With giving this money, the federal government reached farther into the say of the states - thus expansion. You have to have a solid base before you can start the rebuilding of the structure. Jim Kramer (in this column's opinion he is completely discredit as a thoughtful economic analyst, reduced to a corporate shill) said that municipal and state worker compensation created no jobs, without ever finishing the sentence - that hundreds of thousands of those jobs were saved. It's a fact that get swept under the rug, but shouldn't be.
Even Alan Greenspan couldn't really give an insight on what to do. Keep in mind that looking back on his record more closely has not done much to bolster Mr. Greenspan's reputation or legacy for that matter. The one thing he said that struck us as comically ironic and that was that the Federal Reserve has done all it can do at this point. Let's just say, that yes, it has done enough. However, he did state a concern of his, which should concern us all. Mr. Greenspan pointed out that 38% of the total number of people unemployed has been so for over 27 weeks - over six months. How much of that 38% is ever going to make it back fully? As time goes on, the existing skills fade and retraining becomes more difficult. And then you have to consider the individuals coming into the workforce who can not find work. The 38% could easily increase.
But it's all so difficult to predict for anyone, no matter the extent of the expertise. It's really the only thing that you can take away from today's program.... Romer - non-answer; Alan Greenspan - discredited; Gov. Granholm - naively optimistic; Jim Kramer - irresponsible; and Gov. Romney - stupid.
No comments:
Post a Comment