Moving 180 degrees away from progress, and at warp speed
The administration has made many rapid and counterproductive decisions on the economy, from its micromanagement of TARP recipients, to the budget and the stimulus boondoggle. The most important failure by far is its disastrous policy towards the banks. Some details:
Our associate in New York informs us that there is a foot race among JP Morgan, Goldman and the other Morgan to see who can pay back the TARP funds the fastest, in part so that they can prey on the less fortunate among them. The dead ducks like Citibank and other wards of the state (who will no longer be able to pay competitive bonuses or entertain clients) are being stripped of their top talent. So much for the government’s so-called “bailout plan” that has Citi trading at $1.50, and has the shorts licking their chops and figuring out who’s next. The administration has chosen a version of the of the worst possible policy for the banks; it has pushed recovery of the banking sector even further into the future.
Meanwhile, the administration has other ideas both grandiose and nutty. We’re not quite sure which gem of foolishness is our favorite. It might be the idea of further limiting mortgage deductions when real estate is one root of our current problems. It might be the proposal to create “automatic pensions” in American business — what an absurdity it is to increase the costs of jobs at such a time.
This is now an even more serious situation than it was six months ago. In our view, from the so-called stimulus bill, to the absurdly bloated budget and trillion dollar tax increase, to the mishandling of the financial sector, just about every step so far has been counterproductive to the necessity of getting the economy moving again. (Let’s not even discuss foreign policy matters.) We could have made progress towards recovery with an infrastructure-focused stimulus bill, one of the sensible approaches to buttressing the financial system, and a conventional recession-oriented budget, but instead we’ve gone in the opposite direction — and at warp speed. We feel like we are living in a science fiction novel. If this is Ender’s Game, we are the buggers.