The Logic Lifeline

A logical approach to sorting out world events. Where logic, opinion and speculation are combined to produce a reasoned, but entertaining reading experience. The unofficial hometown conservative blog of Woodridge, Il

Monday, March 23, 2009

The Economy is Barack Obama's Katrina

Note: During my illness the last few weeks I have been slowly writing this post. In that time, I lost the opportunity to be the first to name the economic tide of devastation Obama's Katrina. In the last week it has cropped up all over. For the record, I thought of it long before. Ahh well.

In 2005 Hurrican Katrina brought devastation to New Orleans and the surrounding area. George W. Bush did not cause Katrina to happen, yet Katrina is judged as one of his administrations greatest failures. Why? He is judged on his administrations response to the disaster. While we can argue over the exact causes of our current economic crisis and which side of the aisle is to blame, one thing is certain: the Obama Administration did not cause it. Like Katrina, as far as the Obama Administration is concerned, it is something beyond their control that happened. A disaster.

The question now is: how is the Obama Administration going to handle this disaster? What are they going to do to reduce it or make it go away? The components of the economic disaster are:

- The failing financial institutions (risk of massive failure; reduced confidence; difficulty to obtain loans)
- The ailing housing market (prices sinking, massive mortgage defaults)
- Rising Unemployment
- OPEC continuing to cut oil production threatening another rise in fuel prices (either now, or if the economy begins to improve)

Financial Institutions - Obama's actions during his terms as Senator, during the campaign and as president have only led to a policy of throwing billions of dollars at the financial institutions without very little oversight or accountability.

Obama insisted on nominating a tax cheat as Treasury Secretary. Now through blunders in the vetting process and focusing on 'not wasting a good crisis' Obama has not filled the positions that will support Geithner to address the greatest financial threat of our time since the Great Depression. In spite of Geithner's troubles, Obama seems to think he is doing a 'heckuva job'.

Housing Market - The only thing I can say is that without fully recognizing the root causes of the housing market crash, there is little hope of achieving a sustainable solution. Since Obama and his pals at ACORN are at the heart of the housing crisis, there is zero chance of owning up to the root cause. The New York Times recognized the problem in 1999 and predicted the crash during an economic downturn. Of course they had amnesia during the actual crisis. Read about it here.

Rising Unemployment - Obama has done nothing to address the unemployment issue. In fact his actions have been interpreted as hostile to the greatest job creator - the small business sector. We have seen no signals from the Obama camp since taking office other than hostility: higher taxes, higher regulation. If you are a business owner, what are you going to do? Hire and hope things get better? Lay off or hold to save on cash flow until it is safe again?

Fuel Prices - Obama moved very fast to reverse all the domestic drilling policy changes enacted before the election to help quell the raging rise in oil prices. The oil bubble burst last fall under the pressure of the policy changes and the economic downturn, but since that time Obama has only enacted policy to send oil prices back in an upward direction. In addition to the policy reversals (putting all domestic hope off limits), Obama sits idly by while OPEC continues to cut production. The final spike in the coffin of affordable oil, is the weakening of the dollar by Obama's massive spending and printing more money to pay for it.

The actions Obama has taken in response to this financial disaster can be classified in one of two categories:

1) Bumbling baffoonery that will not solve the problem
2) Enact targeted actions that have nothing to do with the economy, but will bring a complete paradigm shift in the political landscape.

Initially, it looked like Obama and team were doing #1 and simply throwing money at the problem hoping it would help. As time goes on, however, it is becoming clear that the actions taken are tarketed at very specific social change. Instead of fixing the problem, the Obama Administration is choosing to take the opportunity to ram a liberal/socialist agenda down our throats. In the end, we will have a weaker economy, a weaker military, a weaker dollar and be no stronger economically than before.

Obama has taken careful steps to drum it into the record that he inherited this recession. Granted. An acorn has been left in his lap. Obama cannot take steps that will turn that acorn into a tall oak, then blame his predecessor. He can try, but even if the MSM holds the line there are not enough wagons to circle Obama on something this big. Unfortunately for Obama, the MSM is beginning to go wobbly on him.

Labels: , ,