Sunday, August 31, 2014

An Era of Lost Confidence

Speaking on The McLaughlin Report, Mort Zuckerman offered yet another trenchant critique of the Obama presidency. We know well that Obama has lost the confidence of world leaders. Now, Zuckerman says, he has also lost the confidence of American business leaders.

The result, they are cutting back on new investment.

Initially an Obama supporter, Zuckerman saw the light very early on in the Obama presidency.

His views today, as summarized by Breitbart News:

“[The economy] has...grown by about 2%, 2.1%, for the last five years, which is the lowest rate of growth coming out of a recession we have had ever, since the Great Depression. And what’s more, that only took place, not because of the fact that the economic environment was that good, it's because we have a hugely stimulating monetary policy and fiscal policy. We have run up huge national debt and we have undermined the value of the dollar, and this is in my judgment not representing a good economic policy” he argued. And “he [Obama] has lost the confidence of the business community and the business world in terms of where it counts, which is investment, and new plant[s] and equipment.”

Zuckerman concluded that the national debt would “restrict what we are going to be able to do as a country for decades,” adding that “we have a situation where we are losing the competitive edge that we had, not totally, but in many, many areas.”

Something worth thinking about.


Ares Olympus said...

Zuckerman doesn't mention that the ENTIRE FREAKEN' WORLD is creating debt as fast or faster than we are (including China), at all levels, not just federal government debt, which is SOVEREIGN debt, which can be erased at any time by magical money printing, or defaulting if we're really in a bad mood.

There's plenty of problems, and NONE of them have anything to do with what president Obama HAS DONE or CAN DO, but what the Federal reserve is doing, and don't know how to stop doing without letting the economy stall.

Perhaps if we're in an era of "lost confidence" it means there's valid reasons that confidence should be lost, and those who have their own opinions on those reasons should stop trying to maximize profits, and start betting when the next crash is going to happen, and where they want their wealth invested when that happens.

Its speculations for everyone, and whining about low economic growth (There are much worse things than low growth), so this shows me he has no answers.

Let the billionaires have their rants, but remember pretty much everything the government is already doing is for their benefit.

Ares Olympus said...

Here's a more detailed article by Zuckerman from March, calling for more education spending to solve the jobs problem:

He directs his ire to the entire political system, with honest begging, but I admit I'm not sure I agree high-tech education is the answer to all our jobs woes. Plus he never mentions student debt as a growing problem, or the fact business leaders can experiment and fail and move on but if a student picks a bad major on debt, he's stuck with that debt for LIFE, no bankrupsy for students who actually want to start a family before they are 50.

The political system is failing us. Washington doesn't seem to be listening, as our political parties are focused more on ideological conflict than the good of the country. Their inability to respond forcefully and practically to America's needs is no longer tolerable. Our national leadership must respond before more lives are ruined.

Ignatius Acton Chesterton OCD said...

Ares Olympus @August 31, 2014 at 7:03 AM:

There's no political system failing us! What is it you would like Washington to "do?"

Our system is functioning as it should. It is slow, by design. When we have divided government, things don't move through except through engagement and compromise. Obama doesn't engage with Congress, he's not interested in getting anything done, and he couldn't spell compromise if you spotted him all 10 letters. He plays the part of being above everything legislative (which is how our political system works) because he frames his arguments in all-or-nothing terms. Ever remember "How a Bill becomes Law" from high school? It seems Obama missed that lesson.

Attack Zuckerman all you like. The truth is that Obama, Pelosi and Reid spent all their political capital in the first two years passing the Democrat goody-bag (most notably healthcare) instead of working on a robust, sustainable jobs strategy coming out of the '08 financial mess (brought to you by Fannie Mae and Freddie Mac). Now the Democratic Party is focused on immigration. When will the middle class citizens of this country matter to this Administration? All we hear is a lot of hot air about who is "standing for" the middle class, but the results don't help the middle class.

Zuckerman is another uber-wealthy guy who originally supported Obama, just like everyone else with money (also known as "the rich"). But Zuckerman has also been vocal and consistent in his dismay with Obama's lackluster domestic economic policy. I'm not sure what you want Obama or other Washington power players to do... circumvent our political system? That's a Pandora's box. Good luck getting the executive orders jini back in the bottle. Sounds like you'll be sorry when a Republican president comes to power and settles that score.

We don't need Washington to "listen" to us. Our dependence on Washington is the crux of the problem. What we're out here requesting is for Washington to get out of the way with all this regulatory policy and taper down the spending so there's opportunity in the future. In the end, it doesn't matter what the rest of the world is doing with sovereign debt backed by petrodollars. It's our choices that matter, and Washington has too much power over the lives of Americans. Didn't we get the memo after the Soviet Union collapsed? Central planning is no way to run a national economy.

Stuart Schneiderman said...

Thank you, IAC for a great comment.

Sam L. said...

Well, if Obama would propose lower tax rates and reducing regulatory overkill and stop wasting our money on "renewable" energy...but he won't because he can't imagine doing any of those things.

n.n said...

Obama's strategy was to borrow from tomorrow's capacity in order to preserve an illusion of prosperity and stability today. An unfortunate consequence of maintaining extremely large and persistent deficits, is that they devalue capital and labor through dilution of purchase power. This policy only works in the short-term when there is a reasonably expectation of a return which exceeds the rate of "investment". Maintaining progressive inflation in the medical industry, and conflating contributory and non-contributory entitlements, only served to exacerbate the consequences of an unsound fiscal policy.

Ares Olympus said...

IAC, the quote "There's no political system failing us!" is from Zuckerman's conclusion.

Re: "Our system is functioning as it should. It is slow, by design. When we have divided government, things don't move through except through engagement and compromise."

That's a great crock, or at least it pretends a level of maturity that does not seem to exist in reality. The ideal of divided government is like a husband and wife playing ultimatums on whose spending too much money while the roof leaks, and each side saying the other side is at fault for not giving up anything, each side planning their own best future while admitting it has nothing to do with a future together.

The loyal opposition guarantees no accountability for anyone. It means all actions can be judged based on whether is strengths your party's strangle hold on your opposition, or weakens it.

It means you can reject the opposition's effort at compromise for something you'd otherwise support, because if you can block meaningful action now, you have a chance to gain more power after the next election.

Its inaction by party design, with no concern for the needs of the whole.

Our founding fathers despised political parties for this reason. So it looks like the only honest position now in politics is surrender and let the opposition have its way, and start preparing to clean up the messes after the unopposed opposition gives up too.

Ares Olympus said...

p.s. I mean't this was Zuckerman's concluding quote:
"The political system is failing us. Washington doesn't seem to be listening, as our political parties are focused more on ideological conflict than the good of the country. Their inability to respond forcefully and practically to America's needs is no longer tolerable. Our national leadership must respond before more lives are ruined."

So I think he means political parties are now only loyal to the needs of their own power.

Ignatius Acton Chesterton OCD said...

Ares Olympus,

What would you have the "loyal opposition" do?

The "needs of the whole" no doubt match your own desires. This is normal, of course, which is why we have elections... it's a time for "the whole" to be heard. It would seem "the whole" you speak of isn't quite as bullish on the Democratic Party agenda as perhaps you are. I'm sorry the resounding outcome of the 2010 House elections disappointed you, which the 2012 redux did not get the gavel back in Ms. Pelosi's hand. Result: divided government. And I suspect a bit more divided government in store after November's Senate elections. Alas, that's the will of the people.

Every time I hear our President say it's time to put politics aside, I chuckle. Politics is his business! He's a politician. And not a very good one, not least because he doesn't seem to like engaging with people very much. Yet that's the central part of the job description he signed up for when he chose his livelihood. Politics is the business of power, and the Founding Fathers set up a diffuse system in a constitutionally-limited federal republic (divided government, checks and balances, enumerated powers). We have progressively turned this inheritance into a semi-dysfunctional mousetrap over time, mostly by altering the Constitution or ignoring the Founders' wisdom. Obama's affinity for executive orders en lieu of the legislative process is but the latest example. It's central planning through executive fiat, which is even more inefficient and dangerous than doing it through the normal legislative process, which gave us the Affordable Care Act.

I love divided government. I like it when these power-hungry, narcissistic, type-A "public servants" can't get anything done. That goes for both parties. My freedom and liberty are safer.