President Obama's swearing-in (not meant to be political)

[_harmony]

I think Obama's economic policies will create some huge long term problems.

Could you specify what you think those problems will be?

[_harmony]

Could we maybe take the political discussion into the off-topic forum?

Discussing President Obama (and thus, politics) is germane to the thread, hobart.




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[_JohnStuartMill]

If Obama's economic policies are surely going to lead us to disaster, why did economists support him by a four-to-one margin?

http://www.economist.com/world/unitedst ... d=12342127

[_Roger Morrison]

Hi Hobart, no worry about being late... You said:

Thank you for your thoughtful post. Sorry I didn't have until this evening to address it. It actually sent me thinking back to my Anthropology of Religion class. There are theories about why these rituals and rites are so important. Transformation ceremonies and ritual catharsis (theories that were developed by thinkers like Arnold Van Genep and Victor Turner) "heighten your awareness that something important has taken place--the transformation ceremonies that have the most drama associated with it are the most important in a society" (my actual notes from the class). And I suspect swearing-in ceremonies and exact wording of rites are done so as an outward symbolism to heighten the awareness (for the participants) of the importance of the event that has taken place. As you said "theatrics supposedly adding drama and significance to impress the impressionable." And that's the whole point--if it were as simple as what we do every day, there would be no importance in our minds of what has occurred. I am also reminded the when I sent my resignation letter to the church--I bought heavier weight paper, printed it in "fine" quality, and signed it with my best pen that I normally keep in a drawer because it's hard to write with (black gel ink). Why? Because it was important to me; it was a serious, life-changing event. But again, it doesn't do much for a perfectionist like me. I recall printing the thing numerous times because I wanted it perfect.

Thanks for that. I understand the principles involved in most crowd manipulative theatrics. It is common and obvious on many fronts. I think, for the most part they appeal to emotion--that is what generally motivates folks--rather than to intelligence, that is generally speaking not as easily arroused;-)

I think our individual dispositions probably influence our reactions to crowd stimulation. As best I can I remove myself from any such overt or covert attempt to violate my integrity--such as it is :-) Watching the genious of Hitler as he influenced by those tactics has left me questions about any person or group that uses the same device to elicit what they want from me as a spectator. Which by nature & nurture I am not; I'm more of a participator...

Of course that fact also motivates me to impress as best I can, when I feel (think?:-)so to do. As you did when writing your very important letter.

BUT hiring a Limo to ego-enhance Graduates of Elementary School IMSCO is???? As are sports hysterics BLAH BLAH BLAH...

BUT, I'm all for Obama... Long may he reign!!!!

Roger
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[_cinepro]

If Obama's economic policies are surely going to lead us to disaster, why did economists support him by a four-to-one margin?

http://www.economist.com/world/unitedst ... d=12342127

Because Republicans nominated the one guy who admitted "the economy isn't my strong suit"?

[_JohnStuartMill]

If Obama's economic policies are surely going to lead us to disaster, why did economists support him by a four-to-one margin?

http://www.economist.com/world/unitedst ... d=12342127

Because Republicans nominated the one guy who admitted "the economy isn't my strong suit"?

That explains economists' response to the question "Which candidate has the better grasp of economics?" but it doesn't explain the lopsided response to "Which candidate would pick the better economic team?" given that none of the other Republican candidates would have done things much differently from McCain.

[_Jason Bourne]

I think Obama's economic policies will create some huge long term problems.

Could you specify what you think those problems will be?

Primarily hyperinflation and a devaluation of the dollar from a number of sources:

1: Putting too much money into the system
2: Interests rates that are far too low
3: Because interest rates are low treasury bills are not attractive long term. Thus less chance of getting financing for our over sized debt from abroad.
4: Huge trade deficit means lots of dollars abroad that will be used by other nations to chase scarce goods in the US.

Additionally, we have huge deficits and are adding more. This means higher taxes now and in the future. Higher taxes means less productivity in our own private sector which leads to a long term sluggish economy.

The problems we have now are because the US economy is 71% consumption based. Much of that consumption was based on borrowing against the home equity bubble. The current approach that Bush started and Obama seems set to continue focuses on stimulating more consumption. But we have over consumed. We need to bite the bullet for some time, save, use the savings and invest it produtions of products that we can sell abroad. This in my opinion is the only way to help is long term.

I tend to subscribe to many, but not all, of the ideas of a person names Peter Schiff. He has a book called Crash Proof that is very enlightening. He leads a brokerage company that specialized in foreign stocks, commidities and forieign currencies.

You can check him out here:

http://www.europac.net/

My biggest concern about Schiff is his positions are somewhat self serving towards what his brokerage company does. But many of his ideas seem sound. He is very anti Keynesian economics which is essentially what we are and have been doing as a nations.

[_JohnStuartMill]

I think Obama's economic policies will create some huge long term problems.

Could you specify what you think those problems will be?

Primarily hyperinflation and a devaluation of the dollar from a number of sources:

1: Putting too much money into the system

There's no reason for an additional debt load to lead to inflation, if it is in fact a debt load and not just an infusion of cash into the system, or something else.

2: Interests rates that are far too low

The biggest reason that the economy is so sluggish right now is that the credit markets are too skittish to provide the consumption-smoothing grease that keeps some companies running and allows entrepreneurs to function. I'm skeptical that raising interest rates is a good idea right now.

3: Because interest rates are low treasury bills are not attractive long term. Thus less chance of getting financing for our over sized debt from abroad.

Worst-case scenario here is that the Treasury boosts the yield on T-bills, bonds, etc. to the point where they become attractive. This is not an insuperable obstacle.

4: Huge trade deficit means lots of dollars abroad that will be used by other nations to chase scarce goods in the US.

In which case, American firms would be taking the money back into the U.S. economy. Contrary to the belief of economic isolationists, there's absolutely nothing wrong with having an enormous trade deficit.

Additionally, we have huge deficits and are adding more. This means higher taxes now and in the future. Higher taxes means less productivity in our own private sector which leads to a long term sluggish economy.

Not necessarily. Marginal tax rates were pretty high in the Clinton years, and the growth figures were pretty good during that time (we even paid down a significant amount of debt during that span).

The problems we have now are because the US economy is 71% consumption based. Much of that consumption was based on borrowing against the home equity bubble. The current approach that Bush started and Obama seems set to continue focuses on stimulating more consumption. But we have over consumed. We need to bite the bullet for some time, save, use the savings and invest it produtions of products that we can sell abroad. This in my opinion is the only way to help is long term.

This talismanic obsession with manufacturing as the economy's savior really needs to go. There's nothing intrinsically bad about a service-based economy, and there's definitely nothing bad about stimulating American demand ("consumption", in your terminology) for American goods and services.

My biggest concern about Schiff is his positions are somewhat self serving towards what his brokerage company does. But many of his ideas seem sound. He is very anti Keynesian economics which is essentially what we are and have been doing as a nations.

What do you think Keynesian economics is?

[_Jason Bourne]

If Obama's economic policies are surely going to lead us to disaster, why did economists support him by a four-to-one margin?

http://www.economist.com/world/unitedst ... d=12342127

Because most economists are steeped in Keynesian economics and Obama believes in that system. However, I think we are seeing the long term failure of such policies. Watch them unravel before your eyes. We may be living the history that they will point back to years form now just like we do the Great Depression.

[_Jason Bourne]

[/quote] What do you think Keynesian economics is?[/quote]

My understanding is that it a major component is government intervention in free markets.

Spend and cut taxes when times are tough and tax and reduce deficits when times are good is the simplest explanation. I am not an economic expert though I did spend my first year in college as an economics major. I find the theories can be difficult to grasp. As a free trader proponet most my life I have tended to believe that in a total world open market where we all do whatever we can do best that it does not matter what is produced where.

But it also seems with too many dollars abroad that if those dollars flood the US market for scarce goods it could drive up inflation to double digits. Sure it puts money back into the US economy. But what is happnening is the Chinese are buying back from US retailers the stuff they make. Or they may not even bother to ship it to us and just buy themselves,

It is complex though. And I do agree that currently raising interest rates would be a mistake. It seems that policy right now is to do the opposite of what happened in the late 20s and early 30s. Maybe increasing the money supply will do the trick.

You seem pretty knowledgeable about this. Check out Peter Schiff;s ideas and let me know what you think.