Europe opted for small stimulus; U.S. went big: Europe won

"Just as the German chancellor vetoed a bailout for eastern Europe on March 1, she is now leading European opposition to US President Barack Obama's call for a global pump-priming package... Merkel's rejection of more stimulus touched off the first trans-Atlantic clash of the Obama administration and led critics to say she risks deepening the global recession." The Financial Express, March 2009.

"Reports from the twelve Federal Reserve Districts suggested continued growth in national economic activity during the reporting period of mid-July through the end of August, but with widespread signs of a deceleration compared with preceding periods." [Emphasis added.] The Federal Reserve's Beige Book , Sept. 8, 2010.

Hoven's Index for September 10, 2010

US: 101.3

Germany: 102.6

Euro Area: 101.8

OECD Europe: 101.6

Sources: OECD.

Biden touts stimlulus program shut down in his home state

FRESNO, Calif. — Vice President Joe Biden said this week that the Obama administration "hit the accelerator" toward spending $5 billion under the economic stimulus law to weatherize people's homes, create thousands of jobs, help consumers save money and put the nation on track for energy independence.

Yet the weatherization program the vice president highlighted in his visit Thursday to New Hampshire is widely considered among the least organized spending projects under the $814 billion economic stimulus law and has regularly been targeted for criticism of its slow progress by auditors and outsiders. Biden didn't hint much at its troubles.

Nearly 18 months since it started, the stimulus weatherization program has experienced spending delays, inefficiencies and mismanagement. In Biden's home state of Delaware, the entire program has been suspended since May, and last month federal auditors identified possible fraud.

The new lingo means Democrats open to revising Obamacare

Like many Democrats over the past 40 years, Barack Obama has hoped that his association with unpopular liberal positions on cultural issues would be outweighed by pushing economic policies intended to benefit the ordinary person.

In his campaign in 2008 and as president in 2009 and 2010, he has hoped that those he characterized to a rich San Francisco Bay area audience as bitterly clinging to guns and God would be won over by programs to stimulate the economy and provide guaranteed health insurance.

At least so far, it hasn’t worked, as witnessed by recent statements by some of the Democrats’ smartest thinkers.

The 2009 stimulus package is so unpopular that Democrats have banned the word from their campaign vocabulary. “I’m not supposed to call it stimulus,” Rep. Barney Frank told the “Daily Show”’s Jon Stewart. “The message experts in Washington have told us that we’re supposed to call it the recovery plan.

“I’m puzzled by that,” Frank went on. “Most people would rather be stimulated than recover.” The problem is, the economy has neither been stimulated nor has it recovered.

As for the health care bill, Democratic pollster Stanley Greenberg, who has been pondering Democrats’ standing with working class voters since his perceptive 1980s studies of Reagan Democrats in Macomb County, Mich., has pretty much thrown in the towel.

In a leaked report for Democratic insiders Greenberg and fellow pollster Celinda Lake concede that “straightforward ‘policy’ defenses fail to be moving voters’ opinions about the law” and “many don’t believe health reform will help the economy.”

“Women in particular,” they add, “are concerned that [the] health law will mean less provider availability — scarcity an issue.” In other words, people have figured out that government rationing may mean less supply for a product for which there is great demand.

Greenberg and Lake recommend using personal stories to highlight the law’s benefits. But “don’t overpromise or ‘spin’ what the law delivers” and don’t “say the law will reduce costs and deficit.”

Do say, “The law is not perfect, but it does good things and helps many people. Now we’ll work to improve it.” [emphasis theirs]

This amounts to an abandonment of the claims that the Obama Democrats have been making about the health care bill they jammed through five months ago. It’s an admission that they messed up when they had supermajorities and will do better when they have fewer votes. It’s a retreat from framing the issue as support versus oppose to revise versus repeal.

So much for the economic issues that were going to provide the underpinnings of what Greenberg’s associate James Carville predicted would be 40 years of Democratic party dominance.

Stimulus "an extraordinary waste of borrowed money" that did little more than line the pockets of White House political allies

It's no coincidence that Christina Romer, chairwoman of the White House Council of Economic Advisers, announced her retirement the day before Friday's brutal unemployment report. With 131,000 more jobs lost in July, and downward revisions of 97,000 for the previous two months, it's easy to see why she would start looking for the exits.

Romer is best known for drafting the February 2009 report "The Job Impact of the American Recovery and Reinvestment Plan," which the White House used as an ammunition belt in the fight to gain passage of its $862 billion economic stimulus bill (the actual cost of which exceeds $1 trillion when interest is included). Romer predicted that following passage of the stimulus bill, unemployment would plateau below 8 percent last fall and by this month register at 7 percent. That's not close enough for government work, as unemployment stands at 9.5 percent today. It would be higher except that hundreds of thousands of frustrated job seekers have given up looking for new jobs and dropped out of the labor force.

Predictably, the stimulus bill has proven to be an extraordinary waste of borrowed money that has failed to create jobs, generate economic growth or do much of anything other than line the pockets of White House political allies. That and give $308 million in subsidies to BP before the Gulf oil spill disaster, and subsidize a study on what happens when monkeys snort coke.

As Romer fades back to her teaching post at Berkeley, Obama is adding to the economic misery by creating an environment of regulatory uncertainty. The Wall Street reform law Obama recently signed potentially requires 533 new regulations, 60 studies and 93 reports, according to the U.S. Chamber of Commerce. Obama's Environmental Protection Agency has 29 active rulemakings, and there are 100 new rules on the Labor Department's agenda and 26 at the Transportation Department.

Add Obama's determination to raise everybody's taxes by allowing the Bush cuts from 2001 and 2003 to expire Jan. 1, 2011, and it's easy to why banks, businesses and consumers are hoarding trillions of dollars that could otherwise spur economic growth. And we haven't even addressed the destructive effect on economic growth of Obama's nationalization of major portions of the economy, including the banks, health care and the auto industry.

The economy is stalling, unemployment seems stuck at European levels of idleness, the federal deficit and the national debt are at historic highs, public confidence in Congress is at its lowest-ever level and big majorities of Mainstream Americans say Obama has the country on the wrong path. Obamanomics has failed miserably and it's time for everybody in this town to admit it so we can move on.

In the guise of stimulating recovery, Obama is building "secular socialist machine" patterned after Roosevelt's New Deal

Students of history will recognize the method to President Obama's madness. The parallels in both policy and politics to the Roosevelt Administration are too striking not to be deliberate. President Obama is consciously modeling his Administration on the Roosevelt Administration. But just as the liberals of the 1930s graduated to the New Left of the 1960s, President Obama's policies and politics transcend the liberalism of the 1930s. He is building what Newt Gingrich rightly calls a secular socialist machine in his new book To Save America.

Roosevelt's Keynesian economics was left for dead in the 1980s with President Reagan's supply-side revolution miraculously ending the stagflation of the 1970s with a 25-year economic boom. But President Obama came into office talking as if that never happened, casting it down the memory hole. While Reagan's early 1981 budget cuts slashed the federal budget by about 5%, Obama rammed through an almost $1 trillion stimulus package of nearly all Keynesian economics from the 1930s, laughing at his astounded critics with the question, "What do you think a stimulus is?"

Economically, it didn't work, just as it didn't in the 1930s or the 1970s. Now 29 months after the recession officially started in December, 2007, unemployment is 10% and rising, and the stock market is again stumbling, with the Dow still 4000 points off its last highs. The recovery was overdue a year ago, and even now economic growth is not half what it should be.

But note how the stimulus spending was structured so that more is spent this year than last. Was the goal to reduce unemployment as quickly as possible, or to use the guise of Keynesian stimulus spending for a political slush fund to buy as many votes as possible in this political year? Note also that about half of the direct "stimulus" spending went to state and local governments to prop up the employment of public employees, the most reliable supporters of liberal Democrat candidates. The only thing President Obama's stimulus is stimulating is a left-wing Democrat political machine.