Why Don’t I Feel Better?

January 29, 2010 by  
Filed under Economics

A few interesting events this week on the economic-political scene. First, President Obama tells us about the state of our union, i.e., a “hope and change” redux tempered with the reality that “hope and change” part 1 didn’t seem to produce much tangible economic benefit. “Hope” doesn’t get it done without the “change.” Spending doesn’t get “change” done when primarily used to buy votes and cater to favored constituencies. (Bush wasn’t any better, by the way.)

Second, Obama and Biden announced a “down payment” on high-speed rail funding in Florida. Unfortunately, this is mostly political hot air as the amount promised won’t actually complete any high speed rail projects.

I would be OK with developing a true national high speed rail infrastructure. That’s what China is doing, at a cost of $300 billion through 2020. The amount that Obama is planning to spend won’t scratch the surface of what is needed to supply a true benefit to the taxpayers. He should have said “no” to the car companies and AIG and used that money for a real investment in the future of transportation. Now we are stuck with airline bag fees and such, plus a shaky GM and Chrysler.

Third, Paul Bernanke was confirmed for a second term as Fed Chairman. I thought Bernanke would do a good job but now I have my doubts about what he and his team have accomplished. I think it’s safe to say that he won’t be around for a third term, which is when some of the real damage (e.g., high taxes and inflation) will be felt.

So why don’t I feel better? That’s why.


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Comments

8 Responses to “Why Don’t I Feel Better?”
  1. Money Beagle says:

    I still don’t understand the comments about the money given to GM and Chrysler. Unemployment would have been so much higher had they been allowed to simply fail. Both are stronger companies now, especially GM who will begin paying the money back this spring. Granted, the money that the government put into the auto companies was a lot, but had they not put out that money, the costs would have been much higher with things like unemployment benefits for the hundreds of thousands of workers that would have lost their jobs, further reduction in the GDP and spending, even more foreclosures, etc.

    • Evan says:

      While I agree that unemployment if GM was left to fail would have been crazy, the scary part, for me, is the company is still shaky despite the amounts thrown into them.

      • Money Beagle says:

        Their plan for recovery includes shutting down or selling four major brands, as well as thousands of dealerships. Those types of activities are massive undertakings that can’t be accomplished overnight and it’s going to takeat least another 12 months to finish these activities and start seeing the financial benefits. As such, it would be extremely premature to judge ‘success’ or ‘failure’ just yet.

        • Evan says:

          I understand the time it takes for any company to move, nevertheless one the size of GM. It doesn’t diminish the fact that it is scary it took how much capital to make it less shaky?

          I am not saying it is a success or failure yet, I just empathize with what TML had said.

  2. Rick Beagle says:

    I have a brother in name, and he is a liberal? TML is going to flip when he sees another liberal Beagle. Um, just so you know, I’m not double dipping under a new moniker….

  3. MasterPo says:

    Money – I don’t see how you can say the companies are stronger. GM and Chrystler sales are in the drain and still dropping. They are practically having to give away cars!

    Would you have felt the same way about the horse and buggy industry? Think of how many skilled craftsmen it took to make a horse-draw carriage, cart, stage coach etc. All out of work. Tisk tisk.

  4. Don says:

    You might enjoy this. Heard about it on NPR.

    “Fear the Boom and Bust” a Hayek vs. Keynes Rap Anthem

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