- It will be interesting to observe how President Obama walks the fine line between addressing reality while simultaneously promoting hope during his first speech in front of a joint session of congress tomorrow night.
- Even as I remain critical of President Obama’s centrist direction, there is no denying he dwarfs everyone else on the political scene. Today’s bipartisan fiscal responsibility summit with members of congress, business, leaders and academics, was brilliant stagecraft. Furthermore, granting Arizona Senator John McCain the honor of asking the first question further enhances Obama’s image as a self-assured transformational figure while diminishing his political adversaries. It also serves to address one of Democrats longstanding perceived vulnerabilities, that they are the party of wasteful spending, even though Republicans have a far worse track record as fiscal stewards.
- Nonetheless, I fear President Obama's stated objective of halving the nation’s deficit by the end of his first term will do severe harm. Franklin Roosevelt made the disastrous mistake of listening to deficit hawks in 1936 and cut spending while the economy was just getting off the ground. A far better course would be to re-direct savings from reducing our troop presence in Iraq and the expiring Bush tax cuts to pumping more stimulus into the economy. Also, one wonders how much more nation building America could have at home with genuine procurement reform of the Pentagon. Alas, that is not likely as long as Defense Secretary Robert Gates is allowed to ignore the administration’s new lobbying restrictions with his appointments.
- With respect to the metastasizing banking crisis, the unfolding narrative is a horrific kabuki dance. We’re gradually being prepared for inevitable nationalization as a temporary step until privatization is restored. What good is it however to restore privatization of these feculent mega-sized financial institutions, even if they’re subject to more regulation? The end result is analogous to rescuing a pyromaniac from burning himself just so he can drop a lit cigarette on a gas leak. I can accept the necessity of preventing these mega-sized institutions from collapsing as an emergency stopgap measure. But rescuing them should merely serve as a transition to ending their monopoly on the banking industry and restoring the prominence of independent community sized banks. America doesn’t need smaller government; it needs smaller banks instead of these global financial institutions that are too far removed from local communities to identify credit worthy risks or have a stake in the well being of localities. Citigroup, Bank of America and so forth represent exhibit A of globalization's destructive power and they can't be reformed.
- NYBRI over at the Albany Project, provides a link to a joint letter by New York Senators Charles Schumer and Kirsten Gillibrand to President Obama. The senators advise that our struggling state will happily accept any stimulus money Republican governors refuse:
"New York receives 78 cents from the federal government for every dollar we send to Washington. If other states are willingly refusing federal support in this time of economic crisis, New York should benefit given our 'donor state' status."Reading their letter, I can’t help but reminisce how Republican governors in states such as Wyoming, happily accepted wasteful money on dubious homeland security projects while New York City was shortchanged after 9/11.