If you never heard of Larry, Moe, and Curly – then you have had a deprived childhood. Those lovable clowns could do no right regardless of the situation, yet always avoided major catastrophes. The Modern Day Obama Economic Stooges follow a similar theme of not being able to get economic policy right for Barry O. Unfortunately, their goof ups have placed the world economy in the proverbial dog house.
When Barry O came riding into the White House showing his Alfred E Neumann smile, he brought the executive knowledge and skills of a stable boy. Obama had never run a company or had any related executive experience to grace the White House lawn. As such, when important decisions came about as putting together an Economic Team to help the nation, Barry O was clueless.
So what is a liberal Democrat to do? Why recycle former Clinton advisors for starters, you silly wabbit! Bring in former Clinton advisors Larry Summers, Peter Orzag, and Tim Geithner to get the pot simmering. All three had the advantage of having a conservative (somewhat) Congress reign in their idiocy during the Clinton years, so they had images of success bouncing around in their heads coming into the Barry O Administration. Then enter another liberal econ wonk in Christina Romer and you have the foundation for what has become the worst economic policy team in American history that has ushered in the worst recession since the Great Depression.
On the surface they all appear to be intelligent, well-educated folks in various fields of economics. They all attended only the finest in Harvard, Princeton, MIT, Dartmouth, etc.; so it was presumed that they had some intellect into their jobs. However, when you delve into their history, it is apparent from the start that this group all subscribed to large government growth and more taxes as some basis for their economic policy. This is the current recipe for disaster we all taste in our mouths.
Geithner has a fairly impressive financial resume being head of the Fed in NY before taking his current gig and he worked for Summers during the Clinton years in the Treasury. He also spent considerable time in Japan and China and served in the US Embassy in Japan in the 90’s. During that time, Japan went through one of its worst recessions every and showed why big government did not work. Apparently Geithner paid no heed to that lesson – he helped usher in TARP, Obama’s tax policy, and the Auto Industry fiasco. While his head is not yet on a platter, I predict this tax cheat to be gone before April 15, 2011.
Romer is a classic monetary policy know-nothing. Some of her great work was why US monetary policy accidentally got the US out of the Great Depression. Forget about that little incident called World War II that pulled the US manufacturing sector out of the toilet. She theorizes on “exogenous” tax increases to reduce “inherited” budget deficits. She is gone from the Council of Economic Advisors but landed on the Presidents Economic Recovery Advisory Board. Try to guess what she will preach.
Orzag, one of the Clinton re-treads, headed the Office of Management & Budget until July. He also was at the Congressional Budget Office in 07 & 08 and came to the OMB with ties to get “favorable” ratings on Congressional Budgets. You know, those trillion-dollar ones. He co-authored a paper titled “Implications of the New Fannie Mae and Freddie Mac Risk-Based Capital Standard” with Nobel Prize winning economist Joseph Stiglitz in 2002 in which they inferred that “on the basis of historical experience, the risk to the government from a potential default on GSE debt is effectively zero”. Wow, he missed that one by a tad!
Summers is the one that really makes you wonder what in the hell was Barry O was thinking. Summers is not the typical liberal Dem of big government and big taxes. As a matter of fact, Summers has been a proponent of lower corporate taxes and capital gains taxes. However, Summers is one of the guys that can go too far in the other direction of risk versus reward and really muck things up. In 1998, Summers was Deputy Secretary of the Treasury under Clinton. He gave testimony to the Commodity Futures Trading Commission before Congress back then on a new concept called “derivatives trading”. You remember this term – it is what AIG and other financial institutions were playing when they all crashed the world economy. Summers testimony before Congress was “…the parties to these kinds of contract are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves from fraud and counterparty insolvencies”. In other words, this guy had a key role in forming the policy that allowed the worlds monetary goliaths to play financial Russian Roulette. Then Barry O comes in and puts him at the head of the economic table by making him the Director of the National Economic Council. Thank God he is gone at the end of the year.
So what does all this mean? Well, if the Mid Terms go as thought, the big budgets and spending will hopefully tone down in Congress. However, Barry O is going to be looking for a new Economic Advisory Board to rely on to get him out of this financial nightmare he created. With his current track record, God only knows who he will tap on the shoulder.