Obama: One Year and Floundering
When I was working on my dissertation, I specifically chose for my committee a junior faculty member from Indiana University. He was a very bright guy whom had done some related work on computer user satisfaction. UH is a research university, meaning for someone to achieve tenure, he or she needs to show a track record of peer-reviewed research publications. In my discipline, some of the key journals have been Communications of the ACM, Management Science and MIS Quarterly; my committee professor was seeking to get articles published in these and/or other highly-rated journals, where the process was inherently very selective. He was unable to get an acceptance by the time I graduated, saw the writing on the wall and eventually took a leave of absence, never to return.
I took note of his experience as I started my own academic career and devised an alternative strategy. Of course, I wanted to hit the top journals, but I decided first and foremost to establish my own system for research and publication; I was willing to seek publications in reference disciplines and solid journals maybe not as prestigious. I also wanted to initiate new studies, knowing, for example, during data collection, I could work at writing articles out of my dissertation research as well (a standard strategy for a new professor). It was not unusual for me to be working on half a dozen projects at the same time; if I came to a stopping point on one project (e.g., waiting for feedback after submission), I would immediately continue work on a different project. The end result was a steady stream of publications, and as I interviewed for subsequent academic positions, research was never a serious issue.
To a certain extent, Obama and the Congressional Dems had their own version of a quick-hit strategy: Gitmo, waterboarding, SCHIP, Ledbetter, etc., but most of these were little more than pent-up legislative priorities that Bush had staved off. However, none of these were critical to why Democrats were elected in 2008. No matter how Obama and progressives try to read the election and claim a mandate, one thing is clear: McCain had taken a lead by early September, but lost the lead as the economic tsunami hit. So the primary issue was THE ECONOMY.
Now, of course, the Democrats will argue that that they did address the economy with relief spending (e.g., extending unemployment benefits) and the so-called stimulus bill, which was promoted on the basis of mitigating the rise of unemployment. A few observations: First, with falling federal revenues, it was important to right-size and properly design the package. Much of the stimulus money went to cover things like new or recurring state operational expenses and a temporary, small increase in disposable income to qualified households (which probably was probably saved or used to pay recurring expenses). In the middle of a recession, you're probably pushing on a string; people aren't going to spend if they're worried about the economy or their jobs, and there's a natural incentive to save. The problem also is that Obama and the Dems wanted to pick winners and losers in the handout of stimulus money. Whether or not education, green energy, and health care are legitimate long-term goals to be pursued by separate programs, you have to deal with the economy as it exists, not as you want it to be. Whereas infrastructure can have a multiplier effect, it depends on the nature and extent of the project; my perception is that a number of these initiatives were not merit-based and market-driven, but politically-favored and make-work.
The bottom line is that the stimulus has not been perceived as effective, e.g., official unemployment has surged to 10% or above (not counting part-time workers looking for full-time or unemployed people whom have given up trying to find work), overshooting a promoted 8% cap justification for the legislation. What's particularly notable is the fact that the Dems really have had no post audits, lessons learned, revised policies, etc.; the general gist is, we'll get back to jobs after we're finished with climate change and health care. To the under- or unemployed, the progressive politicians are basically saying, "Let them eat cake."
What is needed are some changes, in particular, looking through the perspective of job creators (such as permanent tax cuts, a reduced federal footprint (regulations, mandates and paperwork), tax incentives for servicing small business loans and tax-advantaged interstate benefit cooperatives).
When I hear Obama and the Dems continue to drag out their much-feared Bush-bashing weapon (after all, it worked so well in recent statewide elections in Virginia, New Jersey, and Massachusetts), I'm just totally amazed at the fact THEY JUST DON'T GET IT. While families, businesses, and local/state government have to live within a budget and cut back back on expenses, a progressive Democratic Congress and President have been running up the cross-generational credit card: cutbacks? What's a cutback? How in the world, with 10% unemployment, can they justify giving "merit increases" (not to mention step and/or annual increases) to six-figure public servants or increasing retirement pay to retired military, civil servants and retired legislators or executives which EXCEED the wages of the average actively working working household?
Nobody is doubting that Obama and the Congress (which was already controlled by the Democrats, starting in 2007, before the economic tsunami hit) were handed challenging circumstances--circumstances for which they've constantly scapegoated the Republicans and/or the "greed" of Wall Street but for which they've failed to accept ANY responsibility, even though they have had review oversight in Congress for the GSE's Fannie Mae and Freddie Mac, the Federal Reserve, the SEC, etc. Nobody likes a finger-pointing, complaining politician. If you don't want to take responsibility for the hand you've been dealt, resign. What the people want to know is your specific public policy response for resolving the problem. All we've seen is Democrats do is increase federal expenditures to an unsustainable percentage of GDP and to focus on priorities that further entangle the federal government in environment and health care, which are, at best, peripheral concerns of the average household worrying about trying to make ends meet in a difficult economy. What happened to the Democrats of 1992 whom won the Presidency on a slogan, "It's the economy, stupid!"?
Second, Obama and the Dems have been doing a lot of things which simply have increased counterproductive uncertainty and resulted in analysis paralysis: whether we're talking about Obama's irresponsible bashing of the economy after his election, using bleak jargon of staving off a "depression", this week's announcement of so-called bank reform, which immediately sent the stock market into a tailspin (after all, aren't all "good" government reforms punished by the market?)--or we see the Congressional Democrats try to exploit maximum advantage of their super-majorities in both houses by pushing a tax-and-spend agenda on steroids, using the pretext of the uninsured to rationalize government expansion beyond its current 46% market share of roughly 16% of the economy, including threatening small businesses and individuals with fines if they did not subsidize expensive state or federal mandates, or a questionably effective cap-and-trade policy (probably more than offset by increased carbon emissions in the developing world) with sharp energy price increases throughout the economy.
You would think, after the Clintons attempted to nationalize health care in 1993, the progressive Democrats had learned their lesson from meddling with our popular private-sector health care system and simply focused on more achievable goals like strengthening state high risk plans, dealing with a significant cost factor affecting physician costs and availability (i.e., malpractice tort reform) or reinsuring health care insurers for catastrophic costs. (GOP Senator Dole had offered a deal on catastrophic health care coverage to the Clintons, whom decided it wasn't good enough.) As George Santayana said, "Those who cannot remember the past are condemned to repeat it."
The smartest thing that Obama could do is take a page from Clinton's book after the 1994 elections and try to move to the center and get some genuine bipartisan actions. As long as he continues to try to shove partisan measures down the nation's throat, he's building momentum for perhaps the most significant mid-term correction since 1994.
The Obama Administration is Looking at Your Retirement Savings...
You have to admit, it takes chutzpah to be a progressive Democrat, whether we are talking about Democrats with a straight face talking about health care reform, expanding government coverage, and saving costs when there's already an existing $36T unfunded Medicare mandate or discussing retirement security when the reserve is already used as a captive fund to cover progressive Democratic operational overspending in T-bills, not in real assets.
Despite the fact two of their crown jewels (social security and Medicare) are rapidly heading to insolvency, Obama and other progressive Democrats really think the Big Nanny knows better than you do how to manage your retirement savings. The Democrats, who spent a lot of time in 2005 telling Americans that allowing them to take responsibility of a portion over their own "contributions" to social security would be aiding and abetting gambling activity (versus, of course, the return on the Dems' "investment" of the $787B stimulus (and the rest of the $1.8T deficit)), think they should give you the opportunity to convert into an annuity (something, of course, you can already do on your own)--because, heaven knows, you can't be trusted with managing your own retirement... No doubt, after a rough year in the equity market in 2008, they will be steering you towards fixed-income investments. If you had cashed out while Obama was talking down the economy during the first quarter of 2009, you would have missed a nice recovery over the next two quarters (versus anemic returns in CD's and other fixed-income vehicles--and let's not forget the role of T-bills in fixed-income options). In fact, a Fidelity study around 2005 found that ALREADY 1 of every four 401K investors chose a conservative option, like a money market or stable-value fund--which can perform in times of down markets, but hardly keeps up with inflation over the long run. Let us also remember that the US already provides a significant fixed-income portion of retirement income, i.e., social security. Investors should look at diversifying their holdings, maintaining discipline and ensuring they have enough assets in more conservative options to meet living expenses (including social security payments) during occasional stock market down years. I don't mind government making the process more transparent, ensuring existing programs provide a minimal number of investment alternatives and providing some general advice, but I reject any paternalistic interference on individual investment decisions.
Political Cartoon
To understand Mike Luckovich's cartoon, you need to understand that last week's American Idol 2010 clip of 62-year-old General Larry Pratt's performance of his song "Pants on the Ground" has gone viral. (AI has an age limit of 28.)
Musical Interlude: My Favorite Beatles' Movie Song: "Help!"
