Thursday - March 19, 2009

Obama plans to save America are Doomed, say the critics.

Interesting comment from one of the editors at the Telegraph.

President Obama has been in power for just over 50 days, but already critics believe his plans to save America from disaster are doomed.

By. Simon Heffer
The Telegraph
3/17/09

Even in the worst economic crisis since the 1930s, New York knows how to throw a party. For most of yesterday hundreds of thousands of people made a sea of green that paraded up Fifth Avenue to mark St Patrick’s Day. Tens of thousands lined the street to watch them. The all-day party, fuelled by imports of Guinness and whiskey, seemed the more intensely engaged upon as an escape from omnipresent financial gloom.

Away from the party, the mood in America’s cultural and business capital is more firmly anchored in stark reality, and quite different from the euphoria that pervaded it when I was last here, on election day. President Obama still enjoys the popularity that comes with not being George Bush, especially in a city top-heavy with Democrats. But his initial response to the global calamity that he found on entering the Oval Office has not inspired popularity’s more sober elder brother, confidence. Large constituencies, notably business, are voicing their scepticism openly. The President’s much-vaunted $787 billion stimulus package is being widely interpreted, even by some of those (such as Warren Buffett, America’s second-richest man) who openly supported Mr Obama for the presidency, as a serious failure. And we are only just past the first 50 days.

Mr Obama is lucky that his Republican opponents in Congress are disorganised, incoherent and without ideas of their own. The White House branded Rush Limbaugh, the populist talk radio host, leader of the opposition, following an assault Limbaugh had made on the President’s neo-socialist policies. This remark was designed not just to humiliate elected Republicans for their impotence, but also to attempt to terrify the American public at the thought of a man widely seen as a demagogue and an extremist leading a main political movement. It should worry Mr Obama that while the former part of the strategy has hit home, the latter hasn’t.

The main concern about the $787 billion package is that around $400 billion of it (estimates vary) is being used to buy off various Democratic constituencies, granting funding to local projects dear to the hearts of the congressmen whose votes were required to get the package through, and bailing out discredited banks and businesses that many feel deserved to go under. Only yesterday Nancy Pelosi, the Speaker of the House, asked for a change in funding rules to save the San Francisco Chronicle, an ailing newspaper in her own home town that has, by coincidence, loyally supported her. It is not impossible that her wish will be granted. This is what the Americans call pork-barrel politics, and there is enough pork in this scheme to keep pigs in business for decades. Another criticism of the package is that only 23 per cent of the money is expected to come on-stream this year, making a mockery of claims that the money was needed urgently to prevent meltdown.

With the aid of the conservative media, the public is being alerted to the pork – or to what are now being called the “tea parties” being funded by the $787 billion, but which will do no real good to any but a small minority of Democratic client-groups.

There is a rising consciousness here that money is being wasted, that Mr Obama is simply spraying it around, and that America is at risk of bankruptcy. Unlike in Britain – and this is the most refreshing aspect of coming here at this moment of crisis – there is a real, animated, exciting public debate about policy. It extends far beyond the normal political class. Instant books about the alleged failure of Obamanomics are flying off the shelves. Even more astounding, the doorstep-sized novel Atlas Shrugged by Ayn Rand, the objectivist philosopher, published in 1957, is in huge demand. It tells the story of an America destroyed by high taxes and the dictatorship of welfarism, and which can be restored only by the triumph of capitalists and capitalism. The capitalists bring America to its knees by withdrawing their labour and their enterprise; in the end the socialists who have provoked this catastrophe beg them to re-engage. It was only a matter of time before educated opinion here would associate Rand’s fantasy with what is happening today.

Conscious that he has made mistakes, and conscious especially of the increasing perception that he is simply throwing cash at unreformed institutions in the hope that something will happen, Mr Obama is trying to raise his game. He had a soft target two days ago, when he joined in America’s outrage at the paying of bonuses to executives of AIG, the sinking insurance giant now buoyed by public money. This provoked further attacks on him from the Right. Why was he using US taxpayers’ money to bail out a company whose main investors were French, German, Swiss and British banks? And wasn’t he merely jumping on the bandwagon of attacking the bonuses to distract attention from his own policy failings – creating a bogeyman in the same way that Gordon Brown and Harriet Harman did with Sir Fred Goodwin last month?

Mr Obama has shown little evidence that he has connected with the tens of millions in his country for whom hardship is not theoretical.

Six hundred thousand people a month in America are going on the dole. Much of the $275 billion – perhaps as much as $200 billion – earmarked for the mortgage industry will go to shore up Fannie Mae and Freddie Mac rather than provide direct support to those whose homes are being repossessed. The pawn shops, the half-finished and overgrown housing developments on the edges of towns, the roads to nowhere and the new proliferation of beggars and down-and-outs on the streets of New York (I have not seen so many here since the 1980s) are a growing testament to the President’s challenge. He has yet to prove he is equal to it.

HERE FOR THE REST OF HEFFER EDITORIAL

Posted by peiper     on 03/19/2009 at 05:58 AM   
Filed Under: • Economics • Editorials • Obama, The One •  
• Comments (3) • Trackbacks(0)  Permalink •  

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