Why Don’t I Feel Better?
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.