The beginnings of a track record
President Obama appears to be making some poor choices in his priorities, and perhaps even some worse choices in the execution of those priorities. Last week he concerned himself with remodeling a banker’s office, which he criticized, surely a worthy subject for Presidential micromanagement. Today he has opined on the “shameful” paying of bonuses to bankers, all while sitting next to the once-controversial, Turbo-Tax blaming Treasury Secretary Tim Geithner. Bloomberg:
President Barack Obama fed a swelling populist revolt against Wall Street bonuses, calling it “shameful” that banks doled out $18.4 billion as taxpayers bail out companies and the U.S. remains mired in a recession. The bonuses are “the height of irresponsibility,” Obama said
[Questions: (a) who in government should be in charge of approving bank office remodeling? (b) who in government should be in charge of bonuses for businesses so they are not "irresponsible"? (c) doesn't the IRS already do a pretty good job in cutting bonuses down to size and turning large portions of them into government revenue?]
It’s not just bankers’ bonuses that are revelatory of the President’s way of thinking. The dreadful $819 billion “stimulus” bill is not only unpopular and threatens to set off a trade war, but it is mostly pork and very little actual stimulus, certainly not in the near term. It does contain, however, goodies to governments at all levels and several favored interest groups, which appears to be its principal merit.
Inclusive rhetoric is one thing, but we are beginning to see a track record of President Obama, and on some matters domestic and foreign, including certain intractable hot spots, Obama’s judgement appears highly questionable at present.
January 31st, 2009 at 3:52 am
[...] Dinocrat notes, this is looking like a track record of do as I say, not as I do. Possibly related posts: (automatically generated)The Economyeconomic stimulus packageNo [...]
January 31st, 2009 at 8:38 am
“doesn’t the IRS already do a pretty good job in cutting bonuses down to size and turning large portions of them into government revenue?”
Funny you should mention that, on the heels of a report from NT state estimating a tax revenue loss of $1B due to smaller Wall Street bonuses.
January 31st, 2009 at 8:40 am
That is NY state. I guess NT is what you get after Nebraska and Montana join to create a new super-state.
January 31st, 2009 at 9:13 am
It’s important that Obama not get steamrolled by Congress or his Administration could be crippled before it gets underway.
Something has gone seriously askew with the US financial system. Major remedies are needed. The remedies are and will be disruptive to business as usual. The point is not to devise remedies, e.g. a resurrection of Smoot-Hawley, that do more harm than good. Unfortunately, harmful remedies are likely to appeal to Congress.
For example:
So the corrupt, meddling, grandstanding buffoons who brought us ethanol subsidies are now trying to dictate to the entire financial system. (I haven’t thought through whether there are merits to the proposal. Even a stopped clock…)
A sense that adults are in charge is indispensable to restoration of confidence. Restoring confidence is not sufficient to fix the economy, but it is necessary.
Hopefully Obama will quickly veto some pet Congressional projects while Rahm Emanuel knocks heads together. Enabling the Republican Congress to run amok was one of Bush’s very biggest blunders.
The stakes are rising for February’s “State of the Union” speech.
January 31st, 2009 at 10:21 am
“Obama’s judgement appears highly questionable at present.” I must disagree.
Obama’s judgement has always been questionable. From his days as a “community organizer”, his friendships and personal associations, his choice of a church and pastor (whom Obama allowed to baptize his children), …. The list is endless; his entire life has been characterized by questionable judgement.
January 31st, 2009 at 10:50 am
Obama is looking more and more like our next Jimmy Carter.
Carter’s focus on sweaters, thermostats, and our malise, while the economy tanked, sounds way too much like tire pressures, bathroom remodels and CEO’s transportation.
January 31st, 2009 at 12:38 pm
[...] As Dinocrat notes, this is looking like a track record of do as I say, not as I do. [...]
February 2nd, 2009 at 12:05 am
Loss of fortune and destruction of wealth being seen all around is a fact fêted by some and grieved by others; celebrated by those who never made it in the first place and mourned by those who have lost it. The news of ‘The Wall Street bonuses’ create a differing responses, the bonuses once considered a sacred ritual, now may become the industry’s biggest casualty as governments worldwide bail out financial institutions. The idea that money should be returned when they lose is it is gathering new momentum. ‘The current system of “asymmetric compensation,” in which people are remunerated when they do well and aren’t required to return the rewards when they lose money, is damaging to society and needs to change,’ said Nassim Taleb, a professor at New York University and author of “The Black Swan: “These people make excuses, after the fact, saying that nobody saw it coming and that you couldn’t predict it,” A regrettable system has emerged “where profits are privatized and losses are nationalized.”
Last night on the table the response on the above ‘regrettable system’ was made adequately by an investment banker as sour grapes ‘this crisis has been a god send to the underprivileged they don’t want things to get better, all they want is things to be miserable for everyone… ask them negative GDP next year and no bonus for the bankers, or everything back to normal… they will vote the former all day… what do they know about the joys of fusion cuisine, star bucks, foreign cars, working in a hedge fund overlooking Hyde park and ostrich skin wallets…
Everyone sympathises with the poor of the world, I think it is the war between ‘Monday morning quarter backers’ and those who are in the front line. Mike Milken Junk bonds kind of investment banks securitisation that is behind this meltdown help create market capitalisation all over the world that has led to a new structures for professionals all around, the benefits of what these bankers do and the kind of work they do to create capital help build HIV drug plants in Uganda, cancer hospitals all over, take these securitisations out and you would have had a lower consumer base where have and have not’s would be disproportionate. In last 20 years 1.5 billion people have moved on from lowest wrung of poverty to middle classes all over that is what this last Bull Run in banking had achieved. Capital formation help build houses and help build lives, sometime in course of human history great delusions help form a bubble but you cannot take the beneficial and valuable aspects of what Adam Smith called the invisible hand of greed from the equation.
There is definitely a perverse pleasure as investment business the way the world knew it has dismantled, this tug of war is going on at different echelon, this is a war between those who could not make it within investment banking and those who still are clinging on, the sort of viciousness being displayed is incredible, the one who had sent the email to which the response was written was also an ex investment banker now finding all faults in the system.
People take great pride in where they work and one should definitely do that, in education they receive and the quality of life they yearn to live, in my opinion it is within those circles where a super class and yet to be or ‘wannabees’ super class exist that these kind of debates go on.