[Edit this paragraph] Obama's New Deal is troubled
(China news agency, new york, February 3rd) On February 3rd, US President Barack Obama's "New Deal" was exactly two weeks old. On the same day, Obama announced at the White House that he had nominated Judd Gregg, a veteran and Republican, as the Commerce Secretary, completing the final step of his cabinet formation. However, on the same day, Nancy killefer and Tom Daschle, who were nominated for the Obama cabinet, announced that they would give up their posts in the new cabinet because of "tax issues".
Some political commentators said that this was the first "defeat" that Obama had eaten since he took office. Daschle, a former leader of the Democratic Party in the Senate, was originally one of Obama's most important roles in his blueprint for internal affairs reform. On February 2nd, Obama was still defending his good friend Daschle, saying that he would firmly support Daschle as the health minister of the new government and try to help him pass the Senate.
It is widely believed that it is only a matter of time before Daschle's nomination is approved by the Senate, because before that, Treasury Secretary Geithner, who was revealed to have missed paying tens of thousands of dollars in taxes, was still "narrowly missed" and was approved by the Senate. Unexpectedly, Daschle couldn't stop the offensive of criticism and "unloaded his armor" first.
Daschle explained that the main reason for giving up the nomination was "unwilling to be a drag". Nancy killefer, the candidate for the White House Chief Performance Officer, who "retired" three hours earlier, also said that she didn't want her tax returns to affect the process of Obama's cabinet formation.
So far, three of the 20 ministerial cabinet members nominated by Obama have "retired", including former nominee of Commerce Minister and New Mexico Governor Richardson, who was investigated by a federal grand jury for alleged campaign fund violations.
Analysts say that the reason why Obama formed a cabinet is mainly because he has high expectations. The American people are examining his new cabinet with a magnifying glass, but there is always a big gap between ideal and reality.
How to meet the high standards of the people is a thorny problem facing Obama. After Richardson, Geithner, Daschle and killefer, who can guarantee that the remaining 16 cabinet members are "flawless"? For example, Attorney General Holder, who was appointed and approved by the Senate just a day ago, was accused by Republicans and Republicans of playing a role in President Clinton's decision to exempt financial fraudster mark rich.
Obama's cabinet troubles are not limited to this. How to lead and control the luxurious team composed of political veterans is another difficult problem that Obama will face.
The 61-year-old former first lady, the 65-year-old remaining Secretary of Defense and the 60-year-old Nobel Prize winner ... Obama's new cabinet was described by the media as an "all-star team"; Obama's "generosity" has also been widely praised because he dares to use a large number of former "opponents" and talents with better experience and qualifications than himself. But after the applause, Obama still left many question marks: Can Hillary Clinton, who has different diplomatic ideas, obey his command? How much influence will the experienced Gates exert in the formulation of the new national defense strategy of the United States? How much change will Steven Chu, known as the "smartest cabinet minister", bring to the energy structure of the United States?
Among these question marks, the people are most concerned about how Obama will lead this team to fulfill his promise of "change" in the campaign.
(Source: China News Network, China News Service reporter Li Jing Qiu Jiangbo, February 4, 2009, 06:49)
[Edit this paragraph] Obama's New Deal has a long way to go
With the US Senate passing the procedural vote of the new economic stimulus package sought by President Obama, the speculation about the bottom of the US economy when Obama's New Deal has a long way to go has once again become hot. This is not surprising. After all, in the past year, people who have been suffering from the subprime mortgage crisis and financial crisis, and from financial crisis to economic crisis, constantly alternating hope-disappointment-new hope have also been caught in it.
It must be noted that although the American economy is undoubtedly in recession, it is hard to say that it has bottomed out. The first is unemployment. In the past 1 month, the number of non-agricultural employees in the United States decreased by 598,000, the largest decline since 1974. Since the recession in1February, 2007, the total number of unemployed people in the United States has risen to 3.6 million, and the unemployment rate has rapidly risen to the highest point in 16 years. About half of the unemployment occurred in the past quarter, indicating that the general trend is worsening rather than stabilizing. The second is the decline in private consumption caused by unemployment. In 20081February, the nominal domestic consumption in the United States dropped by 1%, which made more people worry about what the American economy would be supported by after the shrinking investment. In addition, in the manufacturing sector with the largest number of employees, the ISM (institute for supply management) index of manufacturing and non-manufacturing has not improved at all, and has been hovering at a low level for many years.
Perhaps it is because the situation is critical enough that people have high hopes for Obama's new economic stimulus plan. After comprehensively considering the consistent ideas of the Democratic Party, Obama's ideas before and after the election campaign and the composition of the cabinet administrative team, we find that the "Obama New Deal" really prefers direct operation or intervention in macroeconomic operation. Theoretically, the stimulus effect of the rescue measures under this paradigm on the economy will probably be significantly stronger than that of the Bush administration. The author notes that the obvious differences between the new version of the economic stimulus plan and the previous government's rescue plan at least include: the scale of fiscal expenditure continues to expand, and the focus of assistance shifts to the real economy; There has been structural adjustment in tax reduction, and the scale of debt issuance has continued to increase greatly; Increasing employment has become a policy focus, and trade and financial policies tend to be conservative.
However, it should also be noted that although Obama's new plan seems to be "very good and powerful", it still belongs to the "emergency prescription" that treats the symptoms rather than the root cause. It is not only unrelated to the extensive demands of peripheral countries for "internal adjustment" of the American economy as soon as possible, but also brings considerable ill feelings to the peripheral countries full of expectations. For example, the controversial "Buy American" clause in the economic stimulus package, although softened in the Senate game stage, still left a deep negative impression on peripheral observers. Many people may think that, although the Obama administration is making a diplomatic gesture that it is about to abandon the New Deal of Obama and the unilateralism of Republicans, today's Democrats are more isolated than the traditional Democrats in economic policy. For this administrative team that advocates "change" and takes it as its main selling point, the failure in the debut stage is not serious.
In addition, the "new plan", which was widely expected, has been voted by the Senate and the House of Representatives, but it has not only become a plan with a reduced amount, but also a plan that has not been fully discussed because of the critical situation. This may directly bring two subsequent troubles. First, it may be because of the discount of investment and tax reduction, which makes it difficult for the rescue plan to play its due role; Second, it may encounter constraints from * * * and Party members when Congress examines specific expenditure items. Therefore, although the efficiency of Obama's new plan is acceptable, the effect of its future implementation should not be expected too much for the time being.
What is more troublesome is that in Europe and Japan outside the United States, in the BRIC countries and other emerging market countries, the dilemma of growth or recovery is becoming more and more obvious, and the signs of recession and even depression are becoming more and more obvious. Many people have believed that this economic crisis stems from the unreasonable rules of the world economic game. Then, in a game time when players are widely hurt and rule makers are too busy, premature optimism is irrelevant to rationality.
All in all, although Obama handed over the first "strategy" answer sheet as scheduled, it is unrealistic to expect this "simplified" economic stimulus plan to be immediate, given that the internal economic situation it faces is still thorny and the external economic environment is still shaky. Needless to say, the whole world may still grope for a long time in the recession.
For most of us, nowadays, it may not be valuable and meaningful to argue about which country in the world will get out of the trough first. Perhaps the most important thing is to prepare for the "second half of the bear market" as soon as possible.
(This article Source: "Obama's New Deal" is hard to say. Author: Shen Hongpu is a researcher at the Risk Research Center of China Cinda Asset Management Company February 2009 1 1 07:09)
[Edit this paragraph] Obama's New Deal missed another good opportunity in Britain
The Obama administration ushered in a moment of truth yesterday, when Tim Geithner, the Treasury Secretary, unveiled a plan to rescue the financial system of the Obama administration's "lightning" New Deal. The current global crisis originated from the American financial system. President Barack Barack Obama and Geithner have only one chance to show that this time is different, after their predecessors made many false starts. Unfortunately, this plan with unclear lines still failed to stand out.
The government will try to reactivate securitization lending by absorbing toxic assets through a new public-private investment fund and expanding the existing consumer lending arrangements of the Federal Reserve. This may save the non-bank credit market, regardless of whether the bank itself can be put back on a solid foundation.
However, banks cannot remain in their current state of failure. Nowadays, some banks have solvency, while others don't, but no one knows exactly which banks have problems. Banks must confess their losses immediately, and then get sufficient capital reorganization, lest all banks be regarded as insolvent. Otherwise, inter-bank lending will not be unfrozen, and capital injection will not increase the lending of banks.
Geithner understands this. Another aspect of his plan is to require banks to undergo "stress tests" to make "their balance sheets cleaner and stronger". However, any transfer of funds from the public treasury to the bank must be accompanied by necessary conditions to achieve its public purpose. Taxpayers' investment must be fairly compensated, because taking over the loss-making assets on the bank's balance sheet on terms more generous than the market price is tantamount to providing improper gifts to the bank.
So, how to evaluate the bad assets of banks? Geithner's plan may be to rely on investors' judgment to get the asset price: private investors will not pay the price of subsidizing failed banks. This is clever, but it ignores two fundamental problems. First of all, how will the government attract co-financing from partners in the private sector, so as to actually subsidize these partners if the government does not bear excessive downside risks?
Secondly, if a bank whose assets are priced at market value cannot sell these assets at a price that is fair to taxpayers or attractive to private investors, then the bank is insolvent. Obama and Geithner still have not reached the logical conclusion that banks must be forced to write down their losses immediately. If they do this, many banks will expose the truth that they are insolvent, and the government must take over these banks and recapitalize them. The amount of money needed to save the financial system and the degree of public ownership are more than the level that the US government is willing to admit now.
(Translator of Financial Times editorial/Hefeng 2009-02- 1 1)
[Edit this paragraph] On Obama's New Deal
First of all, I don't think Obama will focus on the economy, which is very bad for him.
People's support for Obama comes from their trust in his ability to solve the financial crisis. People often compare it with President Roosevelt, who worked hard in the new Obama administration in the last century, which puts him under great pressure. If he can't completely change the American economy before the end of his four-year term, he will lose the chance of re-election. But it's hard, it's hard. He is different from Roosevelt, who is behind a terrible political and banking family. These are many of his policies that can be easily adopted and implemented. So his 100-day New Deal could change the American economy that was on the verge of collapse at that time.
Obviously, Obama doesn't have these conditions, so his $70 million stimulus plan focuses on infrastructure rather than saving the market. This move of Obama shows that the people, not speculators, have decided the future road in his heart. He built a large number of schools to leave an excellent image of ordinary people among the people, instead of aggravating the gap between the rich and the poor like Bush.
The advantage of doing so is that people will have a chance to wake up from the crazy profits in 2007 and realize that real and down-to-earth work is the only way out, otherwise, not only will the deficit not shrink, but the economy will get worse. It is these infrastructures that are needed to solve the frivolity in people's minds and win votes. Obama will not be the greatest president in American history, but he will be the most pragmatic president.
He took a completely different road from Roosevelt, who paid attention to investment rather than deficit. This was a great measure at that time, but it does not mean that it is suitable for the current economic situation. The wrong investment in the Greenspan era can be seen. This is how the technological bubble at the beginning of this century came into being.
It is obviously impossible for Obama to pay attention to people's livelihood and ignore the group of investment wolves in the market. So Obama's current policy is hard for us to figure out, because a group of huge banking families and speculative tycoons put pressure on him.
So for Obama, don't worry too much, why there is a rising trend of American protectionism now, which is the result of the media. The media controlled by those financial tycoons are just to create contradictions between China and the United States and make them profitable. Otherwise, in Obama's view, tycoons should not continue to influence the American economy, and they should return their wealth to the people. This is a nightmare for tycoons.
Therefore, on the one hand, they put pressure on the government, on the other hand, they use the media to create contradictions. And our government should distinguish the truth from the truth, and don't be confused by the illusion and attack blindly, which will lead to the real deterioration of relations between the two countries.