Thursday, January 28, 2010

Obama's First State of the Union Focuses on Domestic Issues : First Year of Presidency Marked by Unprecedented Winning Streak in Washington D.C.

Below is the video of US President Obama's 1st State of the Union Address.
A transcript is available.

In our opinion, the most important personal policy statement in that address is found in these words:
"Our most urgent task upon taking office was to shore up the same banks that helped cause this crisis. It was not easy to do. And if there’s one thing that has unified Democrats and Republicans, it’s that we all hated the bank bailout. I hated it. You hated it. It was about as popular as a root canal. But when I ran for President, I promised I wouldn’t just do what was popular – I would do what was necessary." [emphasis added by LawPundit]
Let that last statement sink in. Does that match your political view of Obama? If not, is it possible that you are wrong?

Don Gonyea writes at NPR in CQ: Obama's Winning Streak On Hill Unprecedented:
"In his first year in office, President Obama did better even than legendary arm-twister Lyndon Johnson in winning congressional votes on issues where he took a position, a Congressional Quarterly study finds.

The new CQ study gives Obama a higher mark than any other president since it began scoring presidential success rates in Congress more than five decades ago. And that was in a year where Obama tackled how to deal with Afghanistan, Iraq, an expanding terrorist threat, the economic crisis and battles over health care."
Does that match what you are reading in the opinion blurbs you read? Maybe you need to make a more accurate selection of news sources. LawPundit is a good start.

Perhaps the best way to understand Obama is to look at his actions ONLY - completely independent of his person. He is a gifted speaker and a smiling personality type and he is black (in part), so everyone has some bias pro or con against him - but you have to look at what he is doing in terms of government leadership, NOT just look at your own personal biases - which are never a good basis to judge others because they are NOT objective.

Who did Obama hire for top positions in his administration? Just like on a football team, you can't win the game without the right players. Economically seen, for example, he hired the best economic minds out there. Thank goodness for that. His crew mastered a disastrous economic situation, not perfectly, but they mastered it. With lesser brains on his staff, the world and national economic situation would be much worse than it is. Things may look bad, but they ARE improving. The OECD writes about the world economy in January 2010:
"08/01/10 - OECD composite leading indicators (CLIs) for November 2009 provide stronger signals of recovery than in last month's assessment. Troughs in the underlying reference series - the index of industrial production - for all major seven countries, except Canada and the United Kingdom, are also visible, and the CLIs for all major seven countries have moved above their long-term trend, implying an expansionary outlook relative to trend (see also interpreting OECD CLIs). The outlook for major non member economies also continues to point to a recovery. etc."
Economic indicators at e.g. The Economist such as U.S. housing prices are mostly on "go".

And for the skeptics out there - the ultimate economic test is the price of a hamburger.

But let us return to Obama. In our view, U.S. President Barack Obama is greatly underestimated in his actions, and this underestimation is possibly faulty. Obama is a winner. His whole life balance is a success story based upon "doing what was necessary" to win, to achieve the goals he wanted to achieve, to get where he wanted to be, and there is little doubt in this commentator's mind that this element of Obama's personality will continue to operate effectively in the coming years. His actions should be judged from that perspective.

In an analysis of the State of the Union address, Helene Cooper at the New York Times Caucus Blog makes the following observation regarding the balance of that address in terms of foreign and domestic focus:
"David Rothkopf, a former Clinton administration official and foreign policy expert, said Wednesday night that he “can’t recall a state of the union that devoted less time or attention to foreign policy issues than this one.”

Mr. Rothkopf, author of a book about the National Security Council, said that Mr. Obama has gauged that Americans right now are “wounded and looking inward.”
You can hardly sum it up better than that. Foreign policy is currently viewed by the Obama administration as leadership through "engagement", which appears to this observer to be a modern synonym for a type of political and military "isolationism". Indeed, a cycle of US "isolationism" after wars is apparent in the record and this appears to be the case now too after Iraq and Afghanistan, where the major battles have been won. The road map for Afghanistan seems to be clear. As written at CNN in Afghan conference sets deadlines for NATO handover:
"On the security front, Afghanistan said it intends to transition some provinces to full Afghan security control by the end of this year, have half the country's provinces under Afghan security control within three years, and take full responsibility for security inside its borders within five years.

To that end, the Afghan National Army will increase the numbers of its troops to 171,600, and the Afghan National Police will increase to 134,000 personnel by October, 2011, the communique said.

If these plans are successful, Clinton said, the United States could begin to transition U.S. troops out of Afghanistan in July, 2011.

"It's not an exit strategy, it's about assisting the Afghans" in taking responsibility for their own security, she explained."
The same is true for Iraq. The world has new - and different - problems facing it now.

Stephen Kaufman writes at in America Must Lead Through Engagement, Obama Says:
"Washington [D.C.] — There must be continued American leadership to halt the spread of nuclear weapons, develop clean energy and advance human dignity throughout the world, President Obama says, restating his commitment to global engagement.

Speaking January 27 in his first State of the Union address, Obama told U.S. lawmakers, Cabinet members, Supreme Court justices, U.S. military officers and the American people that the United States is leading through engagement to advance “the common security and prosperity of all people.”

U.S. engagement includes taking a leadership role in fighting climate change; working to sustain a lasting global economic recovery; establishing partnerships around the world in science, education and innovation; and providing humanitarian food and medical assistance, including in the fight against HIV/AIDS, he said.

“America takes these actions because our destiny is connected to those beyond our shores. But we also do it because it is right,” Obama said."
Is Obama still winning? We think - yes - definitely.

Laughing All the Way to the Bank - Dwight Garner reviews I.O.U.: Why Everyone Owes Everyone and No One Can Pay - by John Lanchester

Laughing All the Way to the Bank
a NY Times review of
I.O.U.: Why Everyone Owes Everyone and No One Can Pay: by John Lanchester

Let's get this straight, with a hat tip to CaryGEE:

In his book "I.O.U", Lanchester writes at p. 55 about the famed late economist John Maynard Keynes:
"As Keynes - he who made himself and his college rich by spending half an hour a day in bed playing the stock market - once observed, there is nothing so disastrous as a rational policy in an irrational world. Keynes was preoccupied by the difference between risk in the sense of the mathematical calculation of probabilities and uncertainty, the more profound unknowabilities of life and history... Confuse risk with uncertainty, and you have dug a tank trap for yourself."
Dwight Garner reviews Lanchester's book at the New York Times in Laughing All the Way to the Bank:
"If you wanted to try to make sense of the global banking crisis, instead of merely weeping openly at your A.T.M. balance, 2009 was a very good year. Bookstores were filled with volumes that, with expert 20-20 hindsight, explained how capitalism went to hell....

Few if any of these books will be as pleasurable — and by that I mean as literate or as wickedly funny — as John Lanchester’s “I.O.U.: Why Everyone Owes Everyone and No One Can Pay.”
“I.O.U.” crosses over into black satire when Mr. Lanchester describes how bankers used their new tools to make money from poor people, the worst credit risks, by prying their cash loose through predatory lending, then pooling this money and selling it off. Who cared if these people defaulted on their mortgages? The risk had already been passed along to others, and ultimately, when banks failed, to taxpayers. Mr. Lanchester calls this “a 100 percent pure form of socialism for the rich.” [emphasis added by LawPundit for the benefit of all those honest but misguided people out there who think socialism is something going from rich to poor - not true]

With steam shooting from his ears, he summarizes: “So: a huge, unregulated boom in which almost all the upside went directly into private hands, followed by a gigantic bust in which the losses were socialized. That is literally nobody’s idea of how the world is supposed to work.”
Our comment to that last paragraph is: BRILLIANT!
Read the full review here. And you might consider reading the book.

Banks, Bailouts, Bonuses and Bogusness: "Geithner Stands His Ground on A.I.G. Bailout Role" -

Geithner Stands His Ground on A.I.G. Bailout Role -
"WASHINGTON — In heated questioning that at times took on the air of a cross-examination, Treasury Secretary Timothy F. Geithner on Wednesday defended his role and the government’s actions in bailing out the American International Group, saying Washington did what was necessary to prevent “a second Great Depression.”"
Berating Geithner gets things nowhere. He may very well be right that the financial bailout actions of the Obama administration prevented a new Great Depression that was in part caused by the irresponsible financial policies of the previous administration. But looking for scapegoats is not the essential question.

The essential question to our mind in the A.I.G. bailout is not the bailout itself - but always the essential question is - WHO has the money? or, more likely, who GOT the money ultimately?

It is on this question that Congress should concentrate - there should be laws in place requiring full disclosure of the recipients of government bailout money - these can only be institutions - and there should be draconian penalties for individuals profiting from any bailout - and this should include unconscionable bonus provisions in contracts, which should be rendered void and unenforceable by the very fact of the payment of a taxpayer-paid bailout.

We have not found anyone who can explain to us cogently why the principle of salary caps as placed on the salaries of professional athletes is not transportable to salaries and bonuses paid in business. We exclude here profits made by entrepreneurs - about which we have no quarrel - but we do have quarrel with business executives or otherwise beneficially situated persons pillaging the till under the cloak of legality.

We posted about this before at:

Economic Recovery & Executive Earnings Salaries Bonuses and Compensation: Establishing Sensible Legal Guidlelines for the Distribution of Remuneration

What Congress should do is to hold hearings on a "salary cap" law in which corporate salaries at the top are strictly bound by the productive "economic growth" of a company rather than being tied to inflationary market capitalization and to unconscionable bonus-augmented contracts. Our suggestion is that no company executive - we are not talking here about entrepreneurs - be permitted to earn more than 10 times the lowest full-time wage in the company which he runs. Now THAT would get the boys at the top on the ball to raise those salaries at the bottom. You bet.

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