Obama and the Economy

[Internecivus Raptus]

Some interesting figures from today's Washington Post:

In January 2009, at the beginning of Obama's presidency, the Dow was at 7,949 and the economy had lost 779,000 jobs that month.

This week, the Dow is at 10,300 and people are complaining because the economy "only" gained 83,000 jobs last month.

Also, financial reform passed today.

I find it absurd that the Republicans are complaining that Obama isn't getting the country out of the mess that they created fast enough, especially when they fillibuster or vote lock-step against every bill that comes up in the Senate.

 

[Engyo]

For the GOP Tin Men
Posted 7/15/2010 7:01 AM CDT
A couple of charts for the Republican Tin Men (if they only had a heart) who think that the unemployed are just lazy bums who would rather collect unemployment than work. First, from the Atlantic:

"At the end of May there were 3.2 million job openings, according to a new report from the Bureau of Labor Statistics. In the face of nearly 15 million unemployed, that's obviously not enough. And if you add in those other Americans not working because they're discouraged or marginally attached ("U-5"), then that number jumps to almost 17 million. Here's a picture of how the labor market changed since 2007":
​

Then one from the Progressive Fix which gives more of a historical perspective on where we are now:






Speaking of heartless, our own Senator, John Cornyn, has drawn his line in the sand on deficit spending.

“Sen. John Cornyn (R-TX), another member of the GOP leadership team, told TPMDC yesterday. "I'm aware in the past some extensions have not been paid for, but if there's one thing that I'm hearing from my constituents it's that deficit spending has to stop, and I think this is a good place to do it."

Chron.commons | Chron.com - Houston Chronicle
​

 

[The Voice of Reason]

In fairness to Cornyn, he is willing to help the rich and corporations by extending the Bush tax cuts ...

 

[Engyo]

In fairness to Cornyn, he is willing to help the rich and corporations by extending the Bush tax cuts ...

AND, he's NOT requiring the extension of those tax cuts to be paid for.....................

 

[Revoltingest]

Economics a is a much misunderstood science. Many lefties believe that Bush is responsible for all that is bad, & that Obama has improved things
dramatically....not in real terms, but relative to how bad they would've been had Bush remained in office. By this metric, Obama has already been
wildly successfull. But we want the kind of absolute success that we can see in a paycheck or dividend. All we have to do is keep up the massive
deficit spending, no matter how much debt piles up. Then, eventually, the Bush effect will wear off as the Obama policies correct the situation.
Then the Bush depression will become the Obama recovery. Of course, this is ridiculous. We're in trouble simply because we haven't been praying
enuf. If we all just keep praying (& you have to truly mean it, ie, have faith), then we will recover - proof positive that prayer is the basis of a
sound economy. Just wait....I'll be proven right in my prediction on the power of purposeful prayer.

Just in case, I'm also going to sacrifice a goat under a full moon.

 

[Engyo]

I dunno; everynody vilifies Bill Clinton, but somehow he managed to run surpluses for several years in a row while dealing with sex scandals and with the opposition in control of Congress. Maybe we oughta be figuring out how that happened................

 

[Sunstone]

We must be careful to extent the Bush tax cuts so that we can add an additional 3.82 Trillion dollars to the deficit.

 

[McBell]

I dunno; everynody vilifies Bill Clinton, but somehow he managed to run surpluses for several years in a row while dealing with sex scandals and with the opposition in control of Congress. Maybe we oughta be figuring out how that happened................

Can we say.....

.....Monica?
​

 

[Revoltingest]

I dunno; everynody vilifies Bill Clinton, but somehow he managed to run surpluses for several years in a row while dealing with sex scandals and with the opposition in control of Congress. Maybe we oughta be figuring out how that happened................

Could it be that the opposition was in control of Congress...& the budget?
The opposition was also in control of most of the states then too.

Clinton inherited a recovering economy from Bush Sr. Obama should've
used that technique.

 

[Engyo]

Could it be that the opposition was in control of Congress...& the budget?
The opposition was also in control of most of the states then too.

Clinton inherited a recovering economy from Bush Sr. Obama should've
used that technique.

No argument with all of this.

How does it explain 2000-2008?

 

[Revoltingest]

No argument with all of this.

How does it explain 2000-2008?

I didn't address 2000-2008. But I can speak to those years.
1) Dubya presided over massive increases in federal regulation of business (as measured by the volume of regs in the CFR).
2) Dubya changed IRS enforcement techniques to more than offset his tax cuts (after the first 2 years).
3) 2 very lengthy & expensive wars.....totally unnecessary IMO.
4) Massive deficit spending.
5) Unfunded mandates imposed upon the states.
6) Allowing Fannie Mae & Freddie Mac to engage in risky lending, despite being warned.
7) Tax policy which discouraged investment, eg, treating many operating expenses as non-deductable capital expenditures.
8) Etc, etc, etc.

Of course, the Dems were complicit, but I blame Dubya for doing what he did & not doing what he should have.

 

[The Voice of Reason]

All we have to do is keep up the massive deficit spending, no matter how much debt piles up. Then, eventually, the Bush effect will wear off as the Obama policies correct the situation.
Then the Bush depression will become the Obama recovery. Of course, this is ridiculous.

Like you, I want a fiscally sound approach to spending. Like you, I'd like to see our national debt reduced to close to zero (although carrying some debt is not always a bad thing).

Your use of rhetoric to paint the Obama policies as "spend us into oblivion" is not helping things. At this point, the government needs to spend money to stimulate the economy. In spite of the cries by the right wing, the debt will not ever be reduced by eliminating taxes. In spite of the right wing talking points, the elimination of social services will not eliminate the debt.

Do you not find the silence on military spending to be quite deafening? Do you not think that actually having corporations pay taxes will help reduce the debt?

I'm for smaller government, but you can't get there overnight, and you damned sure can't get there by stopping needed services.

Okay - I'm stepping down off the soapbox now.

 

[The Voice of Reason]

I didn't address 2000-2008. But I can speak to those years.
1) Dubya presided over massive increases in federal regulation of business (as measured by the volume of regs in the CFR).
2) Dubya changed IRS enforcement techniques to more than offset his tax cuts (after the first 2 years).
3) 2 very lengthy & expensive wars.....totally unnecessary IMO.
4) Massive deficit spending.
5) Unfunded mandates imposed upon the states.
6) Allowing Fannie Mae & Freddie Mac to engage in risky lending, despite being warned.
7) Tax policy which discouraged investment, eg, treating many operating expenses as non-deductable capital expenditures.
8) Etc, etc, etc.

Of course, the Dems were complicit, but I blame Dubya for doing what he did & not doing what he should have.

Good points, all.

Anyone that thinks that deficit spending, coupled with reducing taxes for the rich and corporations (also known as "Supply Side Economics" is still the best way to run the government hasn't been paying attention.

 

[The Voice of Reason]

Personally, I'd like to see a second stimulus package that is directed toward small businesses and working class people.

When that has had time to impact the economy (say two years), then I'd like to see us start really carving up the budget. I'm talking about reducing federal spending by something in the 25% range. Keep that in place, and pass a law that says we will not enact any legislation that isn't offset either by taxes or the equivalent spending cut in another program.

The only thing stopping us is a congress that is populated by people that want to keep their jobs more than they want to get the country back on track.

 

[Reverend Rick]

So am I the only one that thinks BHO is anti business? I made a killing during the Bush years, now my qualified customers are waiting on the banks jumping through hoops instead of breaking ground on new projects.

I gotta tell ya, business sucks right now.

 

[Revoltingest]

Your use of rhetoric to paint the Obama policies as "spend us into oblivion" is not helping things.

Eh....I do what I do.

At this point, the government needs to spend money to stimulate the economy.

I disagree. Spending is a very very risky strategy, given that the taxes taken to pay down the associated debt will dampen the economy. I prefer a strategic reduction in regulation - ease off on those which hurt stability, cost much & provide little in benefit.

In spite of the cries by the right wing, the debt will not ever be reduced by eliminating taxes. In spite of the right wing talking points, the elimination of social services will not eliminate the debt.

I can't speak for them, but cutting social services is key, along with military spending & subsidies of all kinds.

Do you not find the silence on military spending to be quite deafening?

I hear calls for it. But then I listen to more Libertarians than most.

Do you not think that actually having corporations pay taxes will help reduce the debt?

What? Corporations pay a lot of taxes. But be aware that if you increase their taxation, it just gets passed along in the form of reduced dividends or higher prices. There ain't no free lunch.

 

[The Voice of Reason]

So am I the only one that thinks BHO is anti business? I made a killing during the Bush years, now my qualified customers are waiting on the banks jumping through hoops instead of breaking ground on new projects.

I gotta tell ya, business sucks right now.

I read an article (I'll try to find it) a day or two ago, that was quoting one of the top people in finance (the banking industry). This guy was saying that right now, big businesses and the banking industry are sitting on almost $2 trillion dollars, trying to cripple the economy, to have the effect of making Obama a one term president.

I'll try to dig that baby out.

Edit: this isn't the original article I referenced, but it covers the same ground:
http://news.firedoglake.com/2010/07/05/corporations-sitting-on-1-84-trillion-cash/

 

[The Voice of Reason]

What? Corporations pay a lot of taxes. But be aware that if you increase their taxation, it just gets passed along in the form of reduced dividends or higher prices.

I think you'll be badly shocked when you see how many corporations pay absolutely nothing in taxes. As a matter of fact, the larger the corporation, the more likely they are to actually bring in benefits from the tax code.

As an example, GE (which is a monster of an international corporation) paid zero in taxes in 2009. Not only did it not PAY any taxes, it actually received a total tax benefit of over $1 billion dollars. That's right - they paid zero, and benefited from over $1 billion in benefits.

The sad truth is, GE is not the exception. They are (by far) the rule.

Ezra Klein - The corporate tax shuffle

 

[Reverend Rick]

I read an article (I'll try to find it) a day or two ago, that was quoting one of the top people in finance (the banking industry). This guy was saying that right now, big businesses and the banking industry are sitting on almost $2 trillion dollars, trying to cripple the economy, to have the effect of making Obama a one term president.

I'll try to dig that baby out.

The banks are sitting on it all right. Perhaps they are waiting on inflation so they can charge higher interest.

The loan officer at one bank told me they are struggling with a bunch of new regulations. Don't get me wrong, they are not declining loans, they are just sitting on their butts and not approving loans.

 

[Revoltingest]

I think you'll be badly shocked when you see how many corporations pay absolutely nothing in taxes. As a matter of fact, the larger the corporation, the more likely they are to actually bring in benefits from the tax code.

As an example, GE (which is a monster of an international corporation) paid zero in taxes in 2009. Not only did it not PAY any taxes, it actually received a total tax benefit of over $1 billion dollars. That's right - they paid zero, and benefited from over $1 billion in benefits.

The sad truth is, GE is not the exception. They are (by far) the rule.

Ezra Klein - The corporate tax shuffle

I know from experience that ways to avoid taxes involve playing the game, ie, doing things which the gov't encourages (for public policy goals)
by giving tax breaks. When you cite an individual corporation like GE, are you saying that this is the norm for all years for all corporatioins?
How much total income tax do American Corporations pay vs how much net income do they have? I'd prefer a quantitative argument.

Personally though, I think corporations should pay no income tax, since the dividend income is taxed when the shareholders receive it.
This double taxation looks to me like a multi-layered smokescreen which the gov't uses to hide how much revenue they take out of the economy.