The Great Financial Meltdown of '08

[smc]

Originally Posted by ila

And yet after having watched several elections in the US (as an interested bystander) each person running for the US presidency has said that he is the one that will fix the economy.

Making promises that are IMPOSSIBLE or nearly impossible for a candidate to fulfill are part and parcel of every presidential campaign, regardless of candidate and regardless of party. For instance, during the Republican presidential primaries this year Michele Bachmann promised to return gasoline prices to the $2/gallon level. However, a president has nearly zero power to affect gasoline prices beyond getting a repeal of the 18.4 cent/gallon federal gas tax. OPEC and the market "set" gas prices through their control of the price of oil. Newt Gingrich promised to build a thriving human colony on the moon.

[ila]

Originally Posted by smc

Making promises that are IMPOSSIBLE or nearly impossible for a candidate to fulfill are part and parcel of every presidential campaign, regardless of candidate and regardless of party. For instance, during the Republican presidential primaries this year Michele Bachmann promised to return gasoline prices to the $2/gallon level. However, a president has nearly zero power to affect gasoline prices beyond getting a repeal of the 18.4 cent/gallon federal gas tax. OPEC and the market "set" gas prices through their control of the price of oil. Newt Gingrich promised to build a thriving human colony on the moon.

I stand corrected on my pronouns. I had forgotten about Michele Bachmann (although technically she was running for her party's nomination and never made it as far as running for president).

[GRH]

SMC makes a valid point about the overall impotence of any president (regarding economic momentum), and I would extend such impotence to more than just the presidency. There are a concert of factors at play that affect the economy, and only some of them are directly influenced by the government.

Even among the governmental players, there is often gridlock and dysfunction that prevent more coordinated action. The president may propose an economic vision, but it is ultimately up to Congress to pass laws. The Fed may loosen or tighten monetary policy, but the actions taken on behalf of monetary policy should ideally be coordinated with fiscal policy (a responsibility of Congress). You have the regulators, the lawmakers, the Fed, and then a host of factors outside of our control-- i.e. the actions of the ECB and other foreign central banks, trade policy, etc. Arguably, a huge amount of economic uncertainty, slowed domestic growth, and stalled out unemployment figures are being driven by the European debt crisis-- something that American politicians are unable to directly influence.

I've LONG maintained this view, and am not suddenly espousing it as a defense of the Obama administration. I've felt that Presidents-- both Republican and Democrat-- take more than their fair share of credit and blame when the economy is both good and bad. Granted, the President is the most visible symbol of our government, and perhaps such a figurehead makes a more convenient scapegoat than say, the Federal Reserve Chairman, etc. I realize the purpose of the opening post wasn't to provoke educated discussion (or to talk about how deleveraging recessions have historically been long and required many years to reach full recovery)-- but I figured that I would reply with a more nuanced response than simply pointing out that the aforementioned economic facts exist all the while the Bush tax cuts for the wealthiest 1% have been preserved. 8% unemployment while the wealthy have historically low tax rates...Evidence that the "job creators" are hard at work reinvesting their tax savings in building America!

[TracyCoxx]

Originally Posted by GRH

SMC makes a valid point about the overall impotence of any president (regarding economic momentum),

A president could increase the debt by several trillion at such a rate that it causes a downgrade of the US credit rating.

A president could add 106 major new federal regulations which end up costing businesses $46 billion overall.

A president could, through the National Labor Relations board, halt the opening of a brand new $2 billion Boeing facility that would have created 1000 jobs in South Carolina.

A president could direct his labor department to restrict how companies hire interns, cutting the link between students and employers.

A president could block construction of the Keystone Pipline that would have given jobs to thousands of Americans.

A president could restrict drilling in the Gulf.

A president could render immigration laws impotent, taking jobs away from Americans and giving them to illegal aliens.

A president could push for passage of card check legislation legislation that would infrinch upon the rights of workers and make the US less competitive.

A president can't do things all by himself, but he can propose them and he can put pressure on congress to pass his policies. With the power of veto, he does have a huge influence on what gets passed and what doesn't.

The list goes on and on.

A president not only could do these things but Obama actually did.

[smc]

Don't you just love it when TracyCoxx starts a thread and then is so easily made to reveal its true purpose? As GRH wrote:

Originally Posted by GRH

I realize the purpose of the opening post wasn't to provoke educated discussion (or to talk about how deleveraging recessions have historically been long and required many years to reach full recovery)-- ...

Is anyone who has followed the TracyCoxx trajectory on this site willing to admit that she or he didn't know that the opening post was but a setup to publish a list of the sort posted just above by TracyCoxx? The questions TracyCoxx posed in the opening post were clearly rhetorical; TracyCoxx already had the "answers" but didn't post them. No, the provocation of the rhetorical question was just too alluring.

I think this may well be the clearest example yet of the true purpose behind these threads, and of the verity of the characterization I and others have made of the OP. This time it was done with a bit more panache than usual, but nevertheless ...

Now, does anyone want to have a real discussion?