Tag: economy

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Obama criticized for the wrong reasons

“The administrati0n’s stimulus program has failed.” Thus began an op-ed by economist Allan Meltzer, of Carnegie Mellon University, in the Wall Street Journal of June 30. Yes, the gazillion dollar splurge failed – but not for the reasons Meltzer, or any other critics of Barack Obama’s administration tend to push. The stimulus bill failed because of  impossible expectations. People expected the package worth almost a trillion US dollars to kick-start the economy. That it would bring back the good ole’ times in a flash. It didn’t, it was never meant to do that, and until large chunks of the US economy are completely reinvented and reformed, it never will.

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A 19.7 drop in GDP. Imagine that


And you thought your country had problems… Imagine this: Singapore reported a blistering 19.7% SAAR* GDP drop in the first quarter of this year. That comes after the 16.4% registered drop in Q4 2008. I guess that’s the price you pay if you’re a one-trick pony. Which in this case is Singapore’s dependence on its financial sector. It will take the island state years to recuperate. If they recuperate at all.

(*:SAAR stands for Seasonally Adjusted against Annualized Rate)

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This bubble is different

The housing bubble that burst is different from any other bubble in recent times. The economic crater it caused is also much more frightening than anything seen in 50 years.

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The balloons must be emptied first

For approximately 30 years, the world allowed credit to balloon at least ten times beyond the size of the world’s true economy. Gigantic companies financed themselves with credit, even ran their daily operations with money they had loaned. That wasn’t surprising. Taking out loans was rewarded with fiscal deductions, positive interest rates, and a rich variation of other rewards and instruments. And then things went extraordinarily wrong.

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STOCK MARKET CRASH

It’s here. Amsterdam AEX down 8,8%, Dow Jones Industrial Average (DJIA) down 4,1%, S&P 500 down 4,6%, FTSE (London) down 5,9%, CAC 40 down 9,4%, DAX (Frankfurt) down 7%. And on and on and on.

Check out Z24’s stock market overview. (Fifteen minutes delay.)

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US elections Voorpagina

McCain’s velcro economy message

John McCain is desparately trying to neutralize the economy as the dominant issue in the presidential election campaign. To that end, he changes tack whenever the winds of opportunity demand it.

Two weeks ago on Monday, he said that the government should not bail out AIG. But Wednesday, after Barack Obama more or less came out in support of the bailout, McCain suddenly supported it.

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QUICK: Obama’s main gun now silenced?

A hundred to one says that John McCain will immediately voice his support for this emergency reform plan, proposed by the Bush administration. The reason: McCain can hide behind it, while at the same time silencing Barack Obama’s most effective artillery barrage, which had succesfully been aiming at McCain’s biggest vulnerability – the economy.

As said before here: if McCain can disarm Obama on the economy front, it’s back to the subjects of Character, Experience and Leadership. Those three subjects headlined the campaign for almost two weeks, until last Friday, and Obama suffered while McCain gained.

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QUICK: McCain going after Obama strong suit – again

They failed in their quest to attack one of Barack Obama’s strong suit — his image — and so they’re trying something else: Team McCain is now attacking Obama’s signature issue, his strongest, er, strong suit, which is the economy. It’s the single main issue on which Americans trust Obama more than McCain.

And so Team McCain has once again switched to Bush Mode: identify your opponent’s main strength, attack it, weaken it, then take it and slam him with it.

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QUICK: Obama seems back on track

Two things: Barack Obama is a fast learner, and he’s a man of his word. First, he has learned from people who last week gave him the right advice, and second, he’s sticking by his promise that he would not allow the GOP to do to him what they did to Al Gore and John Kerry.

Obama and his campaign have been dominating the campaign, relentlessly bombarding McCain with everything they’ve got for more than 48 hours. That’s two full news cycles. And Team McCain seems to be getting worried, as they are back to responding to Obama. Two days ago, McCain was confidently saying that “the fundamentals of the US economy are strong”. Today, McCain is acknowledging that, yes, perhaps the economy is indeed in bad shape…

Let’s see if Team Obama can keep it up.

QUICK ADD TO QUICK: But there is a danger. If McCain can somehow manage to neutralize the economy-issue, by turning around and acknowledging the problems and make people believe that he, too, promises real change, then it’s back to square one for Obama.

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Analyses US elections Voorpagina

Keeping up appearances: the US economy

“Ever get the feeling you’ve been cheated?” shouted John Lydon, singer of The Sex Pistols, at the end of their last (real) gig. One can only wonder how many Americans wake up each morning, and feel that somehow they’ve been cheated as well. Millions of them grew up with mom and dad telling them they work, and work hard, they could make quite a decent living for themselves. What are the moms and dads of today telling their kids as they load up the U-Haul trailers, to move away from the house they can no longer afford?

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