Thursday, November 6, 2008

The fine economic mess that Obama has stepped into

Now Obama Can Look Forward to Fixing the Horrible Economy!

Dan Amira in the "Daily Intel" column/ blog of "New York" magazine yesterday (11/5/08) offered a valuable compilation of article leads on the challenges that President-elect Barack Obama faces in dealing with the economy.

Lead examples from the column:
• Matt Cooper [in Capital/ Portfolio] expects Obama's transition to be "unlike any other since 1932, when that economic crisis dominated the transfer of power." There are many uncertainties, since "we don't really know what direction the Obama economic plan will take given the realities of the market crash." But he's most likely to "move at his briskest pace" on bringing "America's financial architecture" under federal supervision.

"Obama Sweeps to Historic Victory: Nation Elects Its First African-American President Amid Record Turnout; Turmoil in Economy Dominates Voters' Concerns": • Jonathan Weisman and Laura Meckler [in "The Wall Street Journal"] expect Obama to "start fast, with a large economic-stimulus package, legislation to fund embryonic stem-cell research and an expansion of the State Children's Health Insurance Program, a government insurance program which will be financed with a rise in the tobacco tax." But "Democrats are divided over how to proceed" after that.

James Politi [in "The Financial Times" of London] notes the nervousness over Obama's protectionist trade rhetoric during the primaries, but says that "in Washington trade policy circles, few believe these fears are entirely justified."

If the following is true, then this would be cause for government-driven jobs programs. Obama's proposal to increase spending on infrastructure would address part of this job decline (but this is only in the construction sector). • Chris Isidore [in CNN Money] predicts that "another half-million jobs likely will be lost between now and Inauguration Day," and many economists think "there's little Obama can do to stop more job losses in the short-term, even if he's able to get a new economic stimulus package passed by the lame-duck Congress and signed into law by President Bush."
Speaking of stimulating the economy: • James Pethokoukis ["How President Obama Will Deal With the Economy in 2009" in "U.S. News and World Report"] says Obama has to "kick-start" the economy "as quickly as possible." He'd definitely be willing to sign in a $200 billion government-aid package despite "a budget deficit of $1 trillion or more next year." Why? "A rotting economy can be poison to any new administration, sapping it of public support."

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