Category Archives: Obama

Obama for or against unions?

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Didn’t we just hear a speech from our President about the need to strengthen unions?

White House to set GM, Chrysler deadlines: report

Mar 27 (Reuters) — The Obama administration will set a strict deadline for General Motors Corp and Chrysler LLC to reach cost-cutting deals with creditors and their major union even as it extends more aid to the struggling automakers, the New York Times reported on Friday.

The New York Times reported that the White House autos task force was likely to set a deadline of weeks rather than months for GM and Chrysler to reach a deal with creditors and the United Auto Workers. Under the terms of the $17.4 billion in emergency loans approved for the Detroit automakers by the Bush administration in late December, GM and Chrysler need to win concessionary agreements to reduce the amount owed to the United Auto Workers and other creditors. GM and Chrysler have reached agreements in principle to change provisions of their contract with the UAW that would reduce the average hourly cost for production workers, another provision of the loan deal.


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Obama on a new world currency

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This is what you get from a president who doesn’t understand the monetary system. The strength of the dollar is off point:

Obama Defends Spending Plan, Tempers Criticism of Wall Street

by Julianna Goldman and Kim Chipman

Mar 25 (Bloomberg) — “I don’t believe that there’s a need for a global currency,” Obama, 47, said. “As far as confidence in the U.S. economy or the dollar, I would just point out that the dollar is extraordinarily strong right now.”

The main difficulty with a world currency is how the budget deficit (the only source of net savings of financial assets for that new currency) in that currency is managed. And with a world of leaders who don’t understand how currencies work, the odds of getting that anywhere near right are very long.


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Mosler to Obama- be careful what you wish for!

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The last thing we need to do is encourage policies that empower billions of foreign consumers to compete with us for scarce real resources and diminish our real terms of trade.

But that’s what happens with an administration that does not understand the monetary system.

Obama seeks ‘Sustained’ Fiscal Stimulus in G-20 Summit Appeal

by Tony Czuczka

Mar 24 (Bloomberg) — President Barack Obama urged fellow Group of 20 leaders to provide a “robust and sustained” fiscal stimulus, saying that “much more” action is needed to fight the global recession.

In an article published today in newspapers including Germany’s Die Welt and the Paris-based International Herald Tribune, Obama also urged increased funding for international lenders and a “common framework” of steps to restore the world economy’s flow of credit.

“Our efforts must begin with swift action to stimulate growth,” Obama said in the article laying out U.S. goals for the G-20 summit in London on April 2. “Other members of the G- 20 have pursued fiscal stimulus as well, and these efforts should be robust and sustained until demand is restored.”


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Obama on fiscal limits

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This says it all.

And only days after Bernanke explained how government spends by changing numbers in accounts.

Obama is either ignorant or subversive:

From 60 minutes last night:

Obama on 60 minutes

Mar 22 (CBS) —

KROFT: Is there some limit to the amount of money we can spend?

OBAMA: Yes.

KROFT: Or print trying to solve this crisis?

OBAMA: There is.

KROFT: And are we getting close to it?

OBAMA: The limit is our ability to finance these expenditures through borrowing. And the United States is fortunate that it has the largest, most stable economic and political system around. And so the dollar is still strong because people are still buying treasury bills. They still think that’s the safest investment out there. If we don’t get a handle on this, and also start looking at our long-term deficit projections, at a certain point, people will stop buying those treasury bills.


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Obama taxing health care benefits?

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>   
>   On Sun, Mar 15, 2009 at 11:40 AM, MAuer wrote:
>   
>   How about adopting the Mosler health care proposals?
>   

Yes!

This is what happens with an administration that does not understand taxes are about managing aggregate demand and distribution, not raising revenue per se.

Someday we may have a president who knows how the monetary system works.

And what about all the economists who know or should know health care should not be a marginal cost of production?

Administration Is Open to Taxing Health Benefits

by Jackie Calmes and Robert Pear

Mar 15 (NYT) — The Obama administration is signaling to Congress that the president could support taxing some employee health benefits, as several influential lawmakers and many economists favor, to help pay for overhauling the health care system.


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Obama on quality of US securities

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Obama Says Investors Can Be Fully Confident in US

by Kim Chipman and Alan Bjerga

Mar 14 (Bloomberg) — President Barack Obama said investors can have “absolute confidence” in Treasury bills as he sought to assuage China’s concern about the safety of its holdings of U.S. debt.

“Not just the Chinese government, but every investor can have absolute confidence in the soundness of investments in the U.S.,” Obama said today at a press conference in Washington after meeting Brazilian President Luiz Inacio Lula da Silva.

Sounds a lot like all the other CEOs just before they defaulted.

This is embarrassing. Maybe some day we will have a president who can give the right answer-

The US government makes payment in dollars by crediting accounts at its Federal Reserve Bank.

This process is not inherently constrained by revenues.

The notion of solvency is inapplicable.

Chinese Premier Wen Jiabao, whose country is the single largest overseas owner of U.S. government debt, said two days ago that he was “worried” about holdings of Treasuries and wanted assurances that the investment is safe.

Take him to the Fed and show him how the debits and credits work.

The U.S. is counting on overseas purchases of its debt to finance Obama’s $787 billion package intended to help pull the world’s biggest economy out of a recession.

Federal spending is in no case inherently revenue constrained.

This kind of unanswered rhetoric perpetuates the myths that diminish our real standard of living.

Obama noted today that investment flows into the U.S. are rising. Total net purchases of long-term equities, notes and bonds increased to $34.8 billion in December, compared with net selling of $25.6 billion in November, according to a Treasury Department report last month.

This has nothing to do with solvency. Maybe some day we’ll get a president who understands that.

“I think it’s a recognition that the stability not only of our economic system but also our political system is extraordinary,” Obama said.

The main reason foreign governments accumulate USD financial assets is to keep their own real wages and standard of living down to drive exports to the US.

That’s a ‘good thing’ for us that Obama also doesn’t understand.

He said the private sector has helped make the country the world’s “most dynamic economy.”

OK, whatever ‘dynamic’ means in this context.

Lula, who presides over the world’s 10th-biggest economy, said he’s concerned that investor “flight” toward the relative safety of U.S. securities will mean there’s less money to invest in emerging economies.

He’s just ignorant about how the monetary system works.


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Obama budget to force more savings

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Just what we need- one more subtraction from aggregate demand and yet more tax advantaged funds for managers to play with.

Clearly he believes that “we need savings to have funds for investment” and has at best forgotten the implications of the paradox of thrift:

Obama seeks ‘Automatic Pensions’, Labor Enforcement

by Holly Rosenkrantz

Feb 26 (Bloomberg) — The budget “lays the groundwork for future establishment of a system of automatic workplace pensions, to operate alongside Social Security, that is expected to dramatically increase” retirement and personal savings, Obama’s Office of Management and Budget said in its outline, without giving details on the costs.

The plan would force employers that don’t offer retirement plans to enroll employees in a “direct-deposit IRA account,” with the option for workers themselves to opt out. Currently, 75 million working Americans, or about half the workforce, lacks employer-based retirement plans, according to the administration.


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Obama: “We can’t generate sustained growth without getting our deficits under control”

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I was hoping not to be reading this:

Obama aims to halve deficit by 2013

by Ross Colvin

Feb 22 (Reuters) — Obama wants to slash the ballooning deficit in half by 2013, U.S. officials said Saturday, after massively increasing public spending to stem the worst economic crisis in decades.

The president will outline his ambitious goal when he hosts a summit at the White House Monday on fiscal responsibility and later in the week when his administration presents a summary of its first budget, for the 2010 fiscal year.

“We can’t generate sustained growth without getting our deficits under control,” Obama said in his weekly radio address in which he also announced immediate implementation of tax cuts for 95 percent of Americans as part of the effort to stimulate the economy.

And he may succeed by letting the top tax rates rise in 2010. This would raise taxes for people with relatively low propensities to consume, until the strong economy again drives the budget into surplus and thereby causes the next crash.

If he first allows the budget deficit to get large enough to add the savings that will support the subsequent Obamaboom that brings the deficit down.


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