Vicious Rants of an Angry Yellow Man

The economic news have been relatively good lately. The Dow increased by over 700 points in the last month. Housing prices went up by .5%. Not exactly great but better than keep going down. I think we have gone through the worst but I don't think we are out of the woods yet. Certainly the stock market is going to have sell offs in the near future. And unemployment has not peaked yet as companies that had cut jobs are not going to hire until they feel more confident.

The question is how is Obama's economic plan doing? I always thought that a president has much less control of the economy than the people believe. Who really knows if his stimulus plan has anything to do with what improvement there is so far. I like Obama not because I believe he has any great strategy with the economy even though it was the economy that got him elected. I like Obama for his foreign policies and his understanding of the world. I don't know if his economic policies are good or not.

I don't believe that he is killing the country with his policies as the conservatives are saying. They say things are still bad 6 months into his term and that his stimulus plans are going to cause inflation and enormous debts for the future. I think there is a parallel with Obama and Reagan, of all people. Reagan took over from Carter with runaway inflation. Reagan allowed Paul Volcker to raise interest rates to battle inflation. He also enacted tax cuts. But 2 years into his administration inflation and the economy were still horrible. I think it was around 1986 that things turned totally around. Frankly I think if you do nothing things would turn around in 6 years. I think without any stimulus, the economy would turn around for Obama in 6 years also. But the critics of today are complaining after 6 MONTHS. But neither Reagan nor Obama could have done nothing. Reagan had to try to get inflation under control and Obama had to get the economy moving again. If either one said let capitalism take its course, they would have been the next Hoover. I think with some luck Obama will get reelected in 4 years because the economy will have bounced back by then.

That doesn't mean Reagan and Obama were great economists. Obama will have to deal with inflation and deficits and may have to raise taxes. But he won't do it till his second term. Reagan' policy led to big deficits that eventually caused Bush I to raise taxes which led to his loss to Clinton. Obama may do all right during his stint in the White House but he may lead to the Democrats losing after him. Reagan is adored by Republicans today but he helped Clinton get elected. Obama may be fondly remembered by Democrats years from now but I think the next Republican president will be thanking him secretly.

So don't lose sleep over the economy. We will recover and march on. We just need the next Bill Gates, Steven Jobs and Andrew Grove to step up.