Tuesday, November 25, 2008

My mini epiphany

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As anyone who has read my posts over the last few months can testify, I have been notably unenthusiastic and irritated by Obama worship. I have been called "Mr. Wet Blanket", the "glass half empty" guy, and decorated with other much less flattering labels that have been pinned on me as I tried to point out how precarious were the foundations upon which this new church was built. But today reading the news I had a little epiphany and suddenly my heart melted and I was filled with warm compassion for the Obamite devotees as they adored at The One's Lotus Feet.

I was reading the blog of the prophetic professor Roubini, a voice that once cried out in the wilderness, preaching repentance and doom and who now is a talk show favorite. He is an enthusiastic fan of Obama's proposed economic team, but here is his take on the situation they will confront:
I have also to add that – as I argued in an interview with CNBC Monday morning - while I have the greatest respect for the new Obama economic team, they will inherit a huge economic and financial mess that will be extremely hard to fix even if they were to implement the most sound and consistent economic and financial policy package. This is going to be the worst US recession in decades as the strapped US consumer is now faltering. The recession train and the financial crisis train have left the station. What policy can do – at best – is to minimize the financial and economic losses and limit the extent and severity and length of the economic and financial crisis, not to prevent it. President Elect Obama and his top notch team will inherit two wars and the worst economic and financial crisis in decades. So expect very difficult times ahead for the economy and for financial markets regardless of the best effort of Obama’s excellent economic team in trying to address these problems. Even a massive fiscal stimulus, a more rapid and coherent plan to recapitalize financial institutions and resolve the credit crunch, an aggressive plan to reduce the debt burden of insolvent household, and more aggressive and radical set of unorthodox monetary policies will not prevent a global stag-deflation in 2009 and possibly longer.
Then seeking some relief from Roubini's prognosis, I opened the Washington Post and stumbled upon this column by Robert J. Samuelson:
What terrifies Americans is the prospect that the slump will become much worse than average -- and that the government has lost control of events. (...) Perhaps Barack Obama will change that, but so far, government officials, business leaders and economists seem overwhelmed. They're constantly playing catch-up and losing. Americans feel unprotected against accumulating misfortune. The hyper-anxiety is not irrational pessimism, though it may prove unfounded. Every major episode of this crisis -- from Bear Stearns's failure to General Motors' possible bankruptcy -- has come as a surprise. Similarly, the crisis's three main causes have repeatedly been underestimated: the burst housing "bubble"; fragile financial institutions; and a reversal of the "wealth effect." Of these, the last is least recognized.(...) But now the wealth effect is reversing. (...) Since September 2007, Americans' personal wealth has dropped about $9 trillion, says economist Nigel Gault of IHS Global Insight. (...) If the swing toward saving is too sharp, consumer spending wouldn't just weaken; it would collapse. (...) And these problems feed on each other. Lower consumer spending depresses profits and stock prices, which corrodes confidence, further dampens spending, raises unemployment and increases loan defaults. Credit card losses could be the next big blow to financial institutions.
The case for a sizable economic "stimulus" package is that it would temporarily compensate for the erosion of consumer spending. But if the positive "wealth effect" is now giving way to a lasting negative or neutral "wealth effect" -- as people try to replenish savings and offset lost wealth -- then even a recovery would be sluggish. A new source of demand is needed to sustain faster growth. An obvious solution is for high-saving Asian countries, led by China, to consume and spend more so that their imports increase. Whether they have the political capacity to reduce their dependence on export-led growth is unclear.
Yesterday I quoted Fareed Zakaria on the Chinese:
In September, Beijing became America's largest foreign creditor, surpassing Japan, which no longer buys large amounts of American Treasury notes. In fact, though the Treasury Department does not keep records of American bondholders, it is virtually certain that, holding 10 percent of all U.S. public debt, the government of the People's Republic of China has become Washington's largest creditor, foreign or domestic. It is America's banker.
To Zakaria I tacked on this jewel from the classic Chinese wiseguy's handbook, "The Thirty Six Strategies":
Besiege Wèi to rescue Zhào (Thirty Six Strategies - 2)
When the enemy is too strong to be attacked directly, then attack something he holds dear. Know that he cannot be superior in all things. Somewhere there is a gap in the armor, a weakness that can be attacked instead.
All this flotsam and jetsam swirled around in my consciousness until suddenly the dam broke and compassion welled up in my flinty, shrunken heart. How could I laugh at something like William Greider wrote in The Nation:
His victory, it appears, was a triumph for the cautious center-right politics that has described the Democratic party for several decades. Those of us who expected more were duped, not so much by Obama but by our own wishful thinking.
To criticize the Obamites suddenly seemed to my opened consciousness like making fun of a cancer patient that desperately clutches to his rosary beads between spasms.

The famous words of a great American echoed in my repentant brain:

"Basically, I'm for anything that gets you through the night - be it prayer, tranquilizers or a bottle of Jack Daniels."
Or Barack Obama.... Amen. DS

1 comment:

Anonymous said...

Here's how I feel about "that one":

He's smart. Not just average smart. Beyond thoughtful. He knows how to work. He's not afraid.

Our process is so dumb[ed] down it's a wonder that anyone that smart would take on the job.

Sure. There seems to be a worship going on, in some quarters. Reasonable folks will give him the benefit of the doubt. [There are a few of us left].

Some want Jesus himself, and think we got the Antichrist instead. Others wanted a beauty queen. They lost their bid, and I'm glad for it.

Me, I'm going with the black guy. I'm tired of the cynicism.