The Need for the Ancient Wisdom and Values [Victor Davis Hanson]
I think after a month the main challenge for Obama's team is the disappearance of trust and the need to reassure this generation that ancient American values still hold and will see us through. At tax time, no one feels that our elites — even caring, sensitive DC liberals — pay their taxes. Instead, the sentiment is that a Geithner, Daschle, or Rangel are the tips of the proverbial icebergs, who come clean only in matters of career survival or advancement.
After Madoff, Fuld, Rubin, Raines, etc., no one believes either that the statement they get in the mail on their mutual funds, or 401(ks), or even bank saving accounts is necessarily accurate or truthful.
They do sense that if one collapses — can't pay taxes, can't pay credit cards, can't pay mortgage, can't pay the monthly health care premium, can't pay college tuition — the Obama administration will have some sort of new program for the can'ts. But they suspect there won't be a bailout for them, the cans, and they will inevitably end up paying in increased taxes, fees, or inflated dollars for these spread-the-wealth efforts.
So far there is only murmuring, since the the 24/7 mantra of "Bush did it" has a few more weeks of shelf-life, and everyone wishes to give a new President the benefit of the doubt. But again, Obama's challenge will be to assure the millions of Americans who pay all their bills, and who scrimped, and passed on gratuitous expenditures, that their capital is safe from the greed of Wall Street, the tentacles of government, and the redistributive demands of their fellow citizens.
In such a climate, one must tread carefully and speak about uplifting the American people. Yet, so far we've heard the opposite. Serial citations of the Great Depression, fiscal meltdown, and catastrophe coupled with finger-wagging lectures about cowards, the new California dust bowl, and the wrongs the U.S. committed abroad now seem to come daily from the new cabinet.
Perhaps there is no discipline about sticking to the theme and message in this adminstration. Or, maybe, it is a reflection of an entrenched anti-establishment culture suddenly given the reins of power that has not adjusted to the idea that trashing incumbent conservatives is not the same as the responsibility of governance. Or it could be that we are in perpetual us/they and "we are on the brink of disaster" campaign mode, deemed necessary to alter radically American government, the economy, and culture — or all three combined.
02/23 10:56 AM
Krauthammer's Take [NRO Staff]
From Friday's All Stars:
On the market reaction to the Obama administration's economic plans:
The markets are responding remarkably, exquisitely, sensitively to political events, much more in than in the past.
And the reason is for the last year we have had huge intervention of the government in the markets and the banks, in autos. So it is not just a reaction to economic news, but to what's happening in Washington.
As a result of that, we saw, for example, last year, that tremendous swing when the House rejected the first TARP, a drop of 700 points happening overnight.
What's happening here is that you've got a negative reaction to the team. When you had Geithner rolling out the plan for TARP two, it deeply disappointed the markets because the promise had been it would be specific.
So, a, it introduced uncertainty, but, b, you had the impression of a new team that would take over, very smart people, a lot of experience, and you got a sense that they weren't sure what to do after a month or two or three of deliberation.
And that's what I think is spooking the markets. We may be in such unknown territory historically and economically, that no one knows. And the idea of nobody knowing at the helm, I think, is what is scaring the markets and dropping the market.
Only Making Jindal More Sure of Himself [Kathryn Jean Lopez]
Joe Biden will be stimulus-implementation czar.
The Economy — Worst-Case Scenarios [Jerry Taylor]
In The New York Times today, we learn that the "stress test" that the Obama administration will apply to banks assumes:
Depression-like conditions, with unemployment surging to 10 or 12 percent, for example, or home prices dropping 20 percent further, Treasury and Federal Reserve officials said. Fed officials emphasized that these hypothetical events were "highly unlikely" to occur.
Well, my crystal ball works no better than anyone else's, but a recent examination of U.S. financial sector collapses past by Carmen Reinhart (U. of Maryland) and Ken Rogoff (Harvard) suggests that what is being characterized as "highly unlikely" by the Fed is probably the most likely outcome . . . if past is prologue, anyway.
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