Friday, September 3, 2010

Disconnected on the Economy

Dang, do I have to give up this spiffy uniform?
Photo from Pat Dollard's blog.

Since we're on a car theme today, how are your shares of GM doing? Don't own any? Fail. You do, if you are a taxpayer.

Taxpayers likely to face initial loss on GM IPO-sources

The U.S. government is likely to take a loss on General Motors Co [GM.UL] in the first offering of the automaker's stock, six people familiar with preparations for the landmark IPO said.

KT points out that the domestic content of Obama's Iraq speech was disconnected from reality:

Hundreds of billions of dollars had been spent on precisely what he was suggesting and the results were horrible.

I remember sitting at the blackjack tables in Vegas many years ago and watching an obviously inebriated punter double down on a 5,4 hand while the dealer had a King showing. When the dealer inevitably relieved him of his chips, he loudly complained abut not getting his free drinks fast enough. This reminds of nothing so much as Obama's economic strategy.

Meanwhile unemployment is rising and there is little job creation.

Job creation is slow because of a few simple to understand facts.

1. Uncertainty. The unknowns of future regulatory policy and the impact of Obamacare are injecting uncertainty into the economy.

2. Housing slump. Many small businesses are tied to the real estate market. Businesses that serve the homeowner are often smaller ones. Further, small business owners use the equity in their homes as collateral for lending. Trying to prop up home prices only delays the recovery, because home prices need to fall so that new buyers can start fixing up properties and they can be properly valued for small business owners.

3. Future taxes. Expiring tax cuts, aka tax increases, are injecting fear into the economy.

Exit question: How does doubling down on deficit spending fix any of these problems?


  1. Matt Lauer was reporting the unemployment news today as "bad news with some bright spots" I gagged.

  2. Great picture. I want to post it. Any idea who made it?

  3. I updated the post to link to the blog where I got the photo. I don't know if it is original with that blog, Pat Dollard's, but am a little embarrassed that I did not give credit originally, as I had intended.

    'Dawg, agree that the MSM certainly can spin for Obama.