Obie Holmen: Obama at mid term

Obie Holmen has a new blog post titled Obama at mid term.

Obie HolmenIt should be remembered that following Churchill’s historic and inspired leadership during WWII, the British voters turned him out in the first election after war’s end.

In the recent midterm elections, it would seem that the voters rejected President Obama.  Six fewer Democratic Senators will serve in the new Congress.  Speaker-to-be John Boehner and the Republicans wrenched control of the House from the Democrats.  According to the voters, it would appear that Obama’s first two years have been an abysmal failure.

Did the voters choose wisely?  Was their judgment sound?

Discuss here or there.

9 thoughts on “Obie Holmen: Obama at mid term”

  1. I’m not sure it is fair or accurate to place blame or credit on one person or government office. Obama did the best he could with what he got. In our polarized society, no one can please everyone or be successful in everything. In response to the linked article, as far as our economic situation, this began to go south (literally) with NAFTA. Once we became a nation of consumers of products produced off shore, we began to lose a large segment of our tax base through lost domestic production of goods. Economies based on consumption will finally fall off the cliff if the dollars expended on this consumption continue to leave the country. I’m not convinced that information technology and service industries can carry a nation economically. When the government steps in to support these areas of the populace that have been displaced by the change in production industries, it soon runs out of a source to tax to carry these expenditures. Tax cuts only work with limited government growth. If the government grows, then taxes must increase, or the deficit must increase. Unfortunately, it appears we have chosen the latter, and I’m not convinced it is all Obama’s fault.

    1. If memory serves, John, NAFTA appeared in the mid ’90’s, and the nation enjoyed a long run of an excellent economy, which only went in the tank toward the end of the Bush administration. I think to connect cause and effect between these two is more than a stretch based more on your preconceptions than actual facts.

      1. Obie- I’m no economist, so most of my observations come out of the furniture industry, of which I have been a part for 40 or so years. NAFTA was the major beginning of off-shore production of furniture. This did not happen overnight. That is why I refer to NAFTA as the beginning. There was a period of about 10 years, starting in the mid 90’s, that 85% of our exports to China was CNC manufacturing machines. Most wood furniture is produced with this equipment since one person can make several hundred drawer sides in a day that fit together exactly every time. The skilled labor to run these machines in North Carolina made upwards of $25.00/hr. The chinese laborer, using the same machines, would do the same work for $3.00-$5.00/day. The big shift in production was driven by greed, OUR greed. Why would a consumer pay for a domestic manufacturered piece of furniture, say at $1000 when they could get the very same quality of construction and finish for $500? This change wasn’t driven by political ideology. It was driven by personal greed. There was an economic boom in this country based upon consumption, not production. This could only last until there were no middle class production workers left to fuel the boom. Those people involved in IT and service and financial industries had money to expend on these purchases. Those left on the lower end of the economic ladder still couldn’t afford these purchases and now have even less hope of raising their standard of living. Bush’s failure in his terms was not being able to control government growth. (I have seen some charts that say the government has stayed at a consistent level of the GDP for some time, but my concern is that these statistics are based upon inflated dollars.) If Obama has made a mistake, it is trying to pay for all this with borrowed money, but I don’t think we have enough perspective yet to really make that determination.

        With the speed of communications available, now, it would seem that we should be better able to make better educated choices in our elections. My opinion is that the last election was driven more by a visceral reaction to the last 2 years than by a higher level of understanding on the part of the electorate. But, then, that is just my opinion.

  2. Obie: If you look at economic statistics Bush tanked the enconmy starting in around February of 2003–a little more than half way through his first term. Most Americans do not look at leading indicators and did not see what many economists did–that Bush’s policies were terrible for the economy.

    I also think that Obama is being blamed for what Bush wrought–while it took Bush more than two years to start the economic downslide, his awful policies made an economic hole that Obama could never dream of climbing out of in two years.

    Many democrats predicted this two-year election cycle–there was a lot of thought that we shouldn’t sacrifice a Democrat (Obama) to the crertain economic debacle caused by the Republican policies.

    But the American people want immediate gratification. And John Boehner and the Republicans are going to find out what that means in two years.

    I don’t think the American voters wnet for Republicans–I think they went against the incumbents–and I think in two years they will be thoroughly sick of their new Republican leaders (and old ones, and old Democrats) and want a change then, too.

    Especially when the Republicans campaigned on deficit reduction and then went back to Washington and cut a deal for their co-milliionairs.

    Republicans are good at promissing one thing and then going back and delivering for the insurance companies and Wall Street, the big banks and millionairs–and I think the voters will see it for what it is. I would love to see some true conservative Republicans coming up with reasonable compromises with true liberal Democrats instead of this money-changing for the rich and powerful.

  3. John: I couldn’t agree more. Voters often give credit or blame to the wrong person (or even party.) But that is the way it is.

    I remember how my parents could not say enough bad things about FDR–he never received any credit for recovery after the Great Depression in my parent’s house–they claimed that he had to start a war to get out of depression–after I was older and more educated, I knew that FDR was a great leader and the war did not “cause” an economic recovery.

    But I do think two wars were part of the fiscal irresponsibility that led to the our current economic woes. (On top of many capitalists behaving badly.)

    The blame should fall on insurance companies, big-mega-too-big-to-fail banks and on Wall Street. Unfortunately they have enough money to buy their politicians.

  4. Jane- This is just my opinion, but at the time the government bought out the financial sector, I think it would have been better to allow some of those companies to fail. This is supply & demand economics working the way it does. The government buy-out was an artificial infusion that can’t be sustained. The debt was simply transfered from the private sector to the public sector. The only thing I’m not completely sure about is that it could have resulted in a complete take-over of our financial district by the Chinese banks involved with our debt. My concern is that we just put off the inevitable, but it will be my grandchildren that will suffer the brunt of this. Instead of a couple companies going broke, we all are going to go broke.

    You’re probably to young to remember that song from the 50’s that had a verse something like this, “You can get anything you want, for a dollar down and a dollar a day.” The idea of having to have instant gratification instead of saving up for something has driven our personal and national debt to the levels we see today.

  5. John-I think I am too young to remember that song but I do remember “You can’t always get what you want, but if you try sometime, you get what you need.” Which turned out to be totally false for the big-money firms that were bailed out–they got exactly what they wanted, they had their cake and ate it too (and ate mine and yours, too.) I agree with you. I think they could have let more failure and more break-em-up without risking a financial debacle (the Chinese take-over to which you refer.) I think they should have made a much more complicated TARP–they should have funded down the banks that were going to foreclose on homes so more people could stay in their homes and more banks would not have big loan losses–still a stop gap but instead of rewarding the do-badders they would have shored up the economy where we could see some real results.

    I don’t think that it was the people overspending that led to this problem (although it didn’t help, it was not the main or even partial cause.) I think it was the greedy big banks investing in very risky financial instruments and over-rewarding their overpaid, overblown Wall Street staff with big commissions and pay. If not for them, we would have all gradually turned off the spending spigot and gotten our personal debt back in line. True, there would have been plenty of personal bankruptcies and plenty of foreclosures and even a lot of failed banks–but not to the degree we are witnessing today, where the middle class is paying the bill for the big spenders on Wall Street.

    1. Jane- You are surely correct on these statements. I remember reading an article a couple years ago about a hedge fund manager that made a billion (that’s right- 1 BILLION!) dollar commission on a bundle of transactions he happened to handle. All it amounted to was moving some viral dollars from one account to another account on a computer! That is rediculous, in my book! If I understand the TARP correctly, the dollars went to bail out these guys rather than help the people who had purchased more home than they could afford with the hope that the value of the home they purchased would only increase, not decrease. Borrowing money by paying only the interest on it may be good for operating capital in a business, but doing that type of loan on a house should not have been allowed. I’m not convinced that everyone who made these interest only mortgages understood the risk. I think the banks should have. It’s an example of the fox guarding the chicken house. Again, my opinion of the TARP legislation is that it took private debt (bankers’ failed investments) and turned it into public debt.

      I don’t know if you saw the article in Time magazine a couple weeks ago about how the who foreclosure debacle came about, but it is really interesting. This should be the link for it:
      http://www.time.com/time/magazine/article/0,9171,2032110,00.html
      It is gives some good but scarey insight into the day to day operations of the mortgage banking world.

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