Will Obama Own The Economy?

By Big Tent Democrat, Section Economy
Posted on Tue Mar 10, 2009 at 08:00:33 AM EST
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The obvious answer to my question is, of course he will, in 2012 (Dems will probably own it in 2010.) Ezra Klein seems to believe ownership of the economy is escapable for Obama:

The nationalization conversation has, probably rightly, proceeded from the premise of what policy is most likely to work. But in the White House, the principals are also presumably considering the costs of failure. And the failure of a policy of nationalization is a scarier prospect than the failure of a toxic assets strategy. The Obama administration would own nationalization -- and its attendant effects -- in a way that they're unlikely to own a less aggressive intervention.

(Emphasis supplied.) I think the Obama political team might even believe that. I find it incredible. President Obama will own the economy (and the financial crisis) in 2012, irrespective of the policies he chooses. It is wishful thinking to believe that can be escaped. So he should adopt the policies he believes will work - not try to "minimize" ownership of the mess.

Speaking for me only

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Will Obama Own The Economy? | 49 comments (49 topical)

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So this is why (5.00 / 4) (#2)
by Militarytracy on Tue Mar 10, 2009 at 08:33:12 AM EST

Obama is choosing the much less efficient leading the country down the road to 10 year ruin toxic asset strategy verses the much more efficient spawning a much earlier recovery nationalization plan? In the midst of this grave crisis it is still about trying to get reelected when you have only been in office how many days? It's Obama's butt first and the rest of the entire country last? I'm so fried reading this spew!

don't worry (5.00 / 1) (#4)
by lilburro on Tue Mar 10, 2009 at 08:39:56 AM EST

that's Ezra Klein's observation, not necessarily Obama's. Although if the Obama administration is weighing that (economic meetings with Rahmbo, after all), then I'm fried too.


Geithner, is that you? n/t (5.00 / 2) (#39)
by caseyOR on Tue Mar 10, 2009 at 02:41:20 PM EST

If we don't know (5.00 / 2) (#40)
by sj on Tue Mar 10, 2009 at 02:41:43 PM EST

It's because they haven't made a point of telling us. When they don't tell us, I always wonder what's under the covers.

It will be a long time (if ever) before the Bush-inspired cynicism goes away.


Ive thought about it (5.00 / 1) (#43)
by sj on Tue Mar 10, 2009 at 04:50:30 PM EST

And I really think these two statements are in conflict:

If one digs around in the news all types of things are happening and being reported.

and

They have held pressers and issued press releases and it has been reported in the news

If it was something "they" wanted us to hear, it would be trumpeted loud and long. If people here who are, in general, so well informed don't know about these working plans, is because the trumpets are not blaring.

And actually, you are talking about these working plans. Do you have a link? I would like to read them. Or, more accurately in my case (because the details make my head spin), I would like to read analysis about them.


Not trying to blame a soul (none / 0) (#53)
by sj on Wed Mar 11, 2009 at 01:57:38 PM EST

I'm expressing my perception. And I'm saying that some things are trumpeted and some are not. And that, as a citizen, I shouldn't have to do extensive "homework" to find out what is being done. There is plenty out there to read that is being trumpeted.

And speaking of tone... You might want to read your comments as if you weren't the one who wrote them.


: ::shrug:: (none / 0) (#55)
by sj on Wed Mar 11, 2009 at 04:57:19 PM EST

Ever wonder why everyone has tone with you?
Never mind. Since google is my friend, I see no reason to read your comments any longer.
Because I can just google it.

So that would be why Elizabeth Warren... (5.00 / 3) (#44)
by lambert on Tue Mar 10, 2009 at 07:43:36 PM EST

... wrote in her latest review of the bailouts:

Treasury has not explained how its financial stabilization programs fit together to address the problems that caused this crisis. This failure to connect specific programs to a clear strategy aimed at the root causes of the crisis has produced uncertainty and drained your work of public support.

Oh, wait. gtinla has unfathomable and oracular knowledge of the inner workings of the Obama administration. Sorry.


Pretty sure a lot of us realize that private (5.00 / 1) (#46)
by Militarytracy on Tue Mar 10, 2009 at 09:37:18 PM EST

equity firms are getting to buy the most hopeful least toxic of the $h!tp!le, and I think that a lot of us know who is going to get to buy the totally toxic of the $h!tp!le. What was that bit that Stiglitz talks about....... Socialising losses while privatising gains is more worrisome than the consequences of nationalising banks. Yeah, we know whats going on with the WHOLE picture and it ain't pretty unless you are an equity firm. I cannot for the life of me understand those of you who just can't wait to justify Obama chitting on the small people.


Today I had lunch with two friends who (5.00 / 1) (#47)
by oculus on Tue Mar 10, 2009 at 09:40:41 PM EST

appear to have voted for McCain. They are ready to say: hey, you guys voted for Obama. Blame him. Kind of surprised me.


: McCain (5.00 / 1) (#50)
by CST on Wed Mar 11, 2009 at 09:45:47 AM EST

Obama has been a bit disappointing on this.
McCain would've been a complete disaster.
He thought the Stimulus was too big, the budget is too big, and is completely pushing Republican talking points on the economy.
Thank God he lost.
Speaking for me only.

: You Told Them So, No? (none / 0) (#48)
by squeaky on Tue Mar 10, 2009 at 10:16:29 PM EST

At least they are now on board with you.
For different reasons, sort of.

Why is Ezra Klein (5.00 / 4) (#5)
by Dr Molly on Tue Mar 10, 2009 at 08:43:38 AM EST

spending his time analyzing the politics of what Obama might do, rather than pushing for the administration to do what's right to get us out of this crisis?

No kidding! (5.00 / 2) (#6)
by Militarytracy on Tue Mar 10, 2009 at 08:46:22 AM EST

The cost of dithering indeed (5.00 / 3) (#8)
by lilburro on Tue Mar 10, 2009 at 08:54:32 AM EST

It's up to the blogger to cast their own role, I guess, and different strokes for different folks. But um, yeah, Ezra Klein is not soothing my soul right now. Nice to know he's going to a big party though...


Irresponsibly wasting time... (5.00 / 2) (#14)
by Dr Molly on Tue Mar 10, 2009 at 09:07:00 AM EST

and focusing on shallow politics instead of substance. It's reminiscent of the political focus rather than the human focus in the buildup to the Iraq war. Why are these bloggers focusing on the wellbeing of the Democratic Party rather than the wellbeing of people and the planet?


Aaargh! (5.00 / 2) (#15)
by Militarytracy on Tue Mar 10, 2009 at 09:08:58 AM EST

Chucking my coffee cup across the kitchen


because it doesn't matter if the economy recovers (5.00 / 4) (#16)
by lilburro on Tue Mar 10, 2009 at 09:11:28 AM EST

as long as it looks like Obama didn't fail?


Is that who we have become? (none / 0) (#19)
by Militarytracy on Tue Mar 10, 2009 at 09:20:45 AM EST

If this is the case and if this sort of thinking is at the heart of our new President and his "team", then we neither an FDR or a Jimmy Carter in the oval office. We have something much much shorter in the conscience department than either of those two past Presidents.


: Well, I don't know what Obama's thinking (5.00 / 2) (#22)
by Dr Molly on Tue Mar 10, 2009 at 09:29:17 AM EST

And I won't judge him yet for a while. But it seems clear what Ezra Klein and many of his brethren are thinking. This is why I can't stand party politics anymore.

: Take a deep breath, MT (none / 0) (#34)
by gyrfalcon on Tue Mar 10, 2009 at 11:39:14 AM EST

It's the young Ezra speaking, not anybody who actually knows how Obama and his team are proceeding.

That's what I'm afraid of (none / 0) (#21)
by Dr Molly on Tue Mar 10, 2009 at 09:28:09 AM EST

....not just now but in the future too.


Dr Molly, I assume this is a ... (5.00 / 1) (#30)
by Robot Porter on Tue Mar 10, 2009 at 10:48:58 AM EST

rhetorical question.

We all know that the likes of Ezra Klein are more interested in covering the White House Soap Opera, than actual policy concerns.


: I suppose it's rhetorical, RP (none / 0) (#31)
by Dr Molly on Tue Mar 10, 2009 at 11:02:37 AM EST

Although I occasionally have outbreaks of sincere questioning of what I'll never understand.
I can't accept that what most seem to care about are the 'optics'.

Obama's going to own the economy (5.00 / 9) (#13)
by pluege on Tue Mar 10, 2009 at 09:03:16 AM EST

within 2 months, if not already. If he and his minions think they can duck ownership, they are not only wrong, they are irresponsible. Fixing the problem is all Obama's. If its not fixed (and progressing toward a perceived fix very soon) it is Obama's fault - period.

No one is going to care much longer how we got here (if anyone even cares now). People want their problems solved.

Furthermore, if republicans spend all their energy on try to a-fix blame for their mess and offering the same old failed policies, as they have done to-date, and the Obamaminions don't take advantage of the craven republican position, it will be a huge lost political opportunity - that's where the political focus should be: showing how unhelpful republicans are, not acting like republicans.

: Wasn't that why (5.00 / 1) (#24)
by talesoftwokitties on Tue Mar 10, 2009 at 10:11:00 AM EST

he won the primary and was elected?
Because people thought he was the best and smart choice?
He owns the economy now, today. So, he'd better get busy!

: The Dems have owned the economy.... (5.00 / 1) (#45)
by lambert on Tue Mar 10, 2009 at 07:52:18 PM EST

... since they drafted and passed TARP I (I'm talking reality, now, not optics).
In fact, they probably owned it before that -- say, when Hank Paulson knelt before Nancy Pelosi to beg her to pass it?
For reference ...

One way to think through the "logic" (5.00 / 1) (#25)
by Faust on Tue Mar 10, 2009 at 10:12:36 AM EST

Let us say Obama does own the economy, no matter what course he chooses, nationalization or otherwise.

Let us then imagine that the economy continues to tank all the way up through 2004, in other words we get the infamous "L" shaped recession instead of the "U" shaped recession.

Roubini has recently suggested that even assuming a "U" shaped recession we won't start clawing our way out until 2010 best case scenario. So we may not even need to postulate an "L" shaped recession but rather just a very extreme "U" shaped one.

So if I'm looking (as a pol, not a problem solver)at such a grim outlook it may be that no matter what I do, there is a chance that things won't recover in time for my re-election bid. So in that case it is not unreasonable for me to select a cautious path with regard to what I think the "best path to failure" might be.

Now this is not a good way to think. It's not oriented towards solving the problem. It is not free of risks. Nevertheless it is not hard for me to put myself in a "poltical" as opposed to "pragmatic" mindset where something like this makes sense.

BTD is saying this doesn't make sense at all because bold problem solving pragmatism and politics are inextricably linked here. But if one believes that things are going to be hosed no matter what one does then one might be inclined to choose an approach that one percieves as being more palatable politcally.

Now the question becomes is this really true? Is the current course ACTUALLY more palatable politically? I'm not sure that there is good evidence for even that. It seems to me that this impression is the result of the degree to which the collective elite (politicians on both sides, beltway journalists, the deep penetration of the intellectual class with variants of Ayn Randism) have a strong distaste for actually making the wealthy class pay for any of their mistakes. They are, after all, morally superior by virtue of their wealth.

The Minute He Was Elected (5.00 / 10) (#26)
by daring grace on Tue Mar 10, 2009 at 10:15:36 AM EST

He owned it.

Historically--and punditocractically--people will note the gigantic festering mess he inherited from Bush. But they will also note that THAT's what Obama was elected to deal with: the reality on the ground when he took office.

And so much will happen in the next three(no, make that two and a half) years before the next presidential campaign cycle that whether he was bequeathed this vile economy or not will be but a pale memory. It's his if he does well and it will especially be his if he doesn't.

That's appropriate.

Positive (5.00 / 3) (#28)
by koshembos on Tue Mar 10, 2009 at 10:31:20 AM EST

Once Obama has promised 3.5M jobs in 2009 and 2010, he also inherits every increase in unemployment beyond the current one.

Since so far, his economic plan is way under par, a Republican president in 2012 is almost guaranteed.

That's a price you pay for electing a person no one really knows.

: Sooner than 2012 (none / 0) (#49)
by BrassTacks on Wed Mar 11, 2009 at 03:52:34 AM EST

If things are this bad, or worse, a year from now, we risk losing the Senate and the House in 2010. People are angry and looking to place blame somewhere.
How long will it be before we start seeing bumper stickers that say "Don't blame me, I voted for McCain"?

Um (5.00 / 3) (#29)
by TeresaInSnow2 on Tue Mar 10, 2009 at 10:34:42 AM EST

If indeed he really believes that he can refrain from owning this economy if he does only wimpish things to fix it, then he is a fool.

And as they say:

"A fool and his presidency are soon parted"

Of course, if he tries this tactic, he loses and we lose.

I don't think it's a question of (5.00 / 3) (#32)
by Anne on Tue Mar 10, 2009 at 11:04:05 AM EST

"will he" own it, as if he's now only leasing it with an option to buy; regardless of who and what created this mess, it's his, no take-backs.

I would note that the Bush administration was ever so accommodating to the newly-elected, but not-yet-inaugurated president, and included him on much of what transpired between Election Day and Inauguration Day; I could be overly generous and opine that this was primarily in the interest of the country's economic health, but I could also be cynical and suggest that this was also a political move to establish Obama's ownership even before he had any official capacity.

Republicans play this game so much better than Democrats do; they all but handed Obama a bucket and a brush and tried not to snicker as he painted himself into what is sort of starting to look like the paralysis of indecision.

Not only (5.00 / 3) (#33)
by lentinel on Tue Mar 10, 2009 at 11:15:24 AM EST

will Obama and the dems own the economy by 2010, but removing 16 percent of the troops from Iraq and sending them to Afghanistan will give him ownership of two more festering boils on the American countenance.

We'll see (none / 0) (#1)
by jbindc on Tue Mar 10, 2009 at 08:09:01 AM EST

I think it's more likely he'll own the economy if this stimulus and his budgets "work". If they don't, it will be "Hey, I inherited this mess. Not my fault - blame Bush." (We are still hearing about things that are Bill Clinton's fault - regardless of whether they were or not).

This would be nothing new - every president takes credit for the good stuff and blames the bad stuff on his predecessor.

The stimulus is too small to (5.00 / 1) (#3)
by Militarytracy on Tue Mar 10, 2009 at 08:36:54 AM EST

give Obama the success he needs there. He can say this isn't his fault but the Repubs will harp and harp and harp on his welfare tendencies and how Dems have given away the whole bank and all of our country's wealth for NOTHING and hungry broke people will believe them!


Blame Obama when his policies destroy the economy? (5.00 / 2) (#9)
by lousy1 on Tue Mar 10, 2009 at 08:54:33 AM EST

Gee wonder why. Maybe he can deflect some of the blame to Reid and Pelosi.


: Some people aren't even waiting for 2010 :) (5.00 / 1) (#11)
by Militarytracy on Tue Mar 10, 2009 at 08:57:44 AM EST

If you define 'own' (5.00 / 2) (#12)
by ruffian on Tue Mar 10, 2009 at 09:01:05 AM EST

as what he claims as his own, you are right. He will not escape having ownership assigned to him though, for his own policies that do not work.


The difference (5.00 / 1) (#18)
by Democratic Cat on Tue Mar 10, 2009 at 09:19:55 AM EST

is that Democrats didn't fight back hard enough when Bush et al. laid blame on Clinton. Eventually, many Democrats joined in the trashing. The Republicans will allow no such trashing of their own, so any attempt to foist it off as Pres. Obama's inheritance won't work.

At this point I don't give a da** whose fault it is except to the extent that gives us knowledge about how best to fix it and move forward. Pres. Obama and the Democrats should be trying much harder to fix this rather than figuring out how to avoid or shift blame if they don't.


I think it's very clear (5.00 / 1) (#38)
by CST on Tue Mar 10, 2009 at 01:04:39 PM EST

that while the republicans tried to blame bill clinton they were unsuccessfull.

Just look at the 2008 elections.

Obama can try to blame whomever he wants. The people will think for themselves.


There was great news from Citi today (none / 0) (#7)
by samtaylor2 on Tue Mar 10, 2009 at 08:50:40 AM EST

At least that is what the papers are saying.

I call it more creative bookkeeping disinformation (none / 0) (#10)
by Militarytracy on Tue Mar 10, 2009 at 08:55:54 AM EST

In the letter sent Monday, CEO Vikram Pandit said Citi had an operating profit of $8.3 billion before taxes and special items through February. Pandit said the first-quarter performance so far has been the bank's best since the last time it recorded net income for a full quarter -- that was in the July-September period in 2007.
Provisions that could offset all or part of the operating profit include credit losses, write-downs and additions to loan-loss reserves. Pandit did not disclose the size of any potential provisions.

Emphasis is mine


So Citi is cutting a check to... (5.00 / 3) (#17)
by kdog on Tue Mar 10, 2009 at 09:18:27 AM EST

Uncle Sam today for 8.3 billion as partial repayment of the loans/bailouts/handouts they've taken ....right?

I mean we aren't gonna let 'em keep that money are we? They say they're 8 billion in the black for the quarter, I say we hold 'em to that statement.


: I can't wait for my dividend can you? (5.00 / 1) (#20)
by Militarytracy on Tue Mar 10, 2009 at 09:22:29 AM EST

Not just Citi, either (none / 0) (#35)
by gyrfalcon on Tue Mar 10, 2009 at 11:41:08 AM EST

A number of the big banks, and several major non-banking corps. Market certainly believes them.


yes. (none / 0) (#23)
by cpinva on Tue Mar 10, 2009 at 10:07:47 AM EST

a no-brainer if ever there was one. in fact, he owns it now, according to the republicans and their mouthpieces.

unlike bush, who had only a few days in office, following 16 years of bill clinton, obama is deemed the responsible party, since his official nomination last august.

the financial markets knew obama would win in nov., and tanked on that knowledge. if the economy continues to slide, obama will be this century's herbert hoover. if it rebounds, it will be the result of the strong decisions made by bush, in the 4 or 5 days he held office.

you can bet your rush or hannity on it.

: Heck (5.00 / 3) (#27)
by sj on Tue Mar 10, 2009 at 10:17:34 AM EST

He owns it now, according to me.
When I bought my house, anything that was wrong with it and was not dealt with during the buying/selling process became my problem. Didn't matter who installed the plumbing. I just wanted the toilet to flush.

I think (none / 0) (#37)
by connecticut yankee on Tue Mar 10, 2009 at 12:52:52 PM EST

Obama will do both. HE will own the success or failure of the solution but the initial crisis will forever be linked with the Bush legacy.

It's a free shot for the democrats. A generational talking point now.