Biden Admits Administration Misread Economy
The Veep sat down with Stephanopoulos recently and shared some sobering news about our economic health and how their projections and predictions were too rosy.
“The truth is, there was a misreading of just how bad an economy we inherited,” said Biden, who is leading the administration’s effort to implement it’s $787 billion economic stimulus plan.“Now, that doesn’t — I’m not — it’s now our responsibility. So the second question becomes, did the economic package we put in place, including the Recovery Act, is it the right package given the circumstances we’re in? And we believe it is the right package given the circumstances we’re in,” he told me.
So what now?
Well, Stephanopoulos brought up a second stimulus, and there’s a good reason this meme is beginning to spread. Because Krugman is talking.
And you know what, he’s probably right. Because the last time we faced a crisis like this, the only thing that pulled us out was WWII, when we went into massive debt.
Here, take a look… (via zfacts)
Do note how the debt exploded under Reagan, and he was facing a similar economic situation. I point this out for two reasons. First, so when you hear folks grousing about exploding debt, point back to this. Second, Cheney was the one who told Paul O’Neill, “Deficits don’t matter.” And Reagan introduced that idea to America, not Dems.
Still, how achievable were Krugman’s numbers the first time around? Not very. Because he wanted double what the Dems got passed, and it was just as unrealistic then as it is now.
Also, with health care and energy reform on the table, a second stimulus package is out of the question. Not only because the vast majority of the money from the first package hasn’t been spent, but because it’s politically impossible. The Blue Dogs won’t back it unless things get really dire, and with unemployment starting to level off and get “less worse,” there will be no convincing the swing state Dems.
And so here you have the Republicans’ opening for 2010 and 2012. If Krugman is right and we are facing a jobless recovery, then the economy will be Obama’s Iraq…and not nearly as easy to demagogue as a war is. And that’s even if we have a technical recovery.
But the bright spots?
Well, the government is finally spending money on our infrastructure again, and that’ll make us more competitive in the future. Then we have energy independence finally becoming a priority, and that should help pocket books down the road as well. Also, data release recently shows that Americans are earning and saving more.
So there’s actually a fair amount of good news in all of this, but in the near term it doesn’t help the unemployment rate and that’s what people will be looking at to gauge whether or not Obama’s strategy is working.
Here’s the question: Are we facing a jobless recovery, and, if so, will Obama be a one-termer?
(Photo: AP via Daylife)
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Seems that Obama will be safe as long as the GOP keeps imploding. WW2 not only forced huge debt but fully employed the work force, no actually went beyond that by hiring woman who were not a great factor in employment in those days. Before the war the economy was improving but slowly, something the Republicans like to point out and employment lagged.
Now I know everyone loves the depression model for examining this crisis but things are quite different and possibly worse. In the thirties banks failed and credit dried up and industries dried up. But there were industries, auto plants, garments, steel, aluminum, oil, tool makers, family farms, so when the war came around, the industries geared up and money started to flow. When soldiers came home they were put to work building infrastructure and making goods for Europe to rebuild.
Now there is no industry no, that’s not right, little industry. The jobs lost may never come back. Currently there is a shortage of skilled labor largely because the new generation is not trained.
We have created an economy that only needs paper pushers.
Well Obama may be looking like Hoover lately but the idea that the GOP is harboring some FDR with a magic bullet for the economy has as much reality and chance as me winning the lottery tomorrow.
A jobless recovery in my opinion is a certainty.
Now I know everyone loves the depression model for examining this crisis but things are quite different and possibly worse.
WW2 not only forced huge debt but fully employed the work force even though the wages were low and the job dangerous. The war even created a new work force by hiring woman. Before the war the economy was improving but ever so slowly, there were government job programs but not enough to move the numbers enough, something the Republicans like to point out. The war changed that.
Yet now we are in two wars but they don’t seem to have had any impact on the economy, no surge in industry or employment in fact, all we have is the debt. About one trillion. I don’t know how that compares to WW2 but it seems significant.
In the thirties banks failed and credit dried up and industries dried up, local industries; American Industry, auto plants, garments, steel, aluminum, oil, tool makers, manufacturing, family farms, so when the war came around and material was needed, the industries geared up and money started to flow.
At the end the government was deeply in debt but the industries adjusted from war commerce back to domestic commerce. When soldiers came home the women went home, houses were built, soldiers went to work or to college on the Government dime. Factories started up making everything from vacuum cleaners to television and radio sets, we were building infrastructure and making goods for Europe to rebuild. And the rest of the world wanted to to sell to us and money came into the Treasury from tariffs.
Now there is little in the way of tariffs and entire industries and jobs went overseas.
We can stimulate the economy but I am not sure what those investments would look like.
We have surrendered whole industries and the jobs with them. Consider the new industries of flat screens televisions, cell phones and computers, they are all made overseas. Congress even refused to protect the little industry we have left from foreign competition. So are we going to build new bridges with Chinese steel using machines made in Japan and South Korea and fueled with Saudi oil?
Can we see the problem here? Without a strong manufacturing base we will forever have underemployment.
The consequence of sending real jobs overseas means we forget how to make things. We only buy. Skilled labor jobs will never come back. Currently there is a shortage of skilled labor largely because the new generation is not interested in skills that built this country and feel those jobs are gone forever. An entire generation is going untrained.
Every person in America is going to need four years of college. This comes from our President.
Does anyone realize how crazy this statement is, sorry not crazy, but completely unrealistic especially considering our underfunded schools. Are we going to be a nation of bankers?
We have been trained to be a nation of consumers and have performed well and spent and spent with unsecured credit cards, right up and over our ears. Told we are entering a new service industry unaware that meant working at cheap burger joints.
Why is China lending us money? Because their jobs depend on it. And without our consumer dollars they can’t finance their own growth.
Krugman may be right we need a massive amount of stimulus but I think we have painted ourselves into a corner with this New World Order and Global Economy. If the world needs our economy we may need a Marshall Plan from them.
[...] talked about this recently when Biden admitted that there might be need for a second stimulus package at some point, but that [...]