By A.B. Thomas
There has been talk that President Obama should be given some slack on his first months as president; that he is in between a rock and a hard place and that should be taken into account rather than with critical harshness. The present reality of the United States is not a conducive situation for an ostentatious hand holding love affair with the President; it is a reality in which a face slap would be more relevant to the future success of both Obama’s presidency and the economic out-look for the United States. There are several points that Obama must address lest his historical term is looked upon with less than favorable memories.
Perception. President Obama is seen not as the Commander in Chief but as a Chairman of the board; in his effort to show that he trusts his appointees, there is the global appearance that he has over delegated the responsibility of running the country. When questioned about the AIG bonus scandal on Jay Leno, instead of stating what he would do, he spent the time reiterating how confident he was in Tim Geithner and what the congress and senate would do. What he should have stated was that the ‘buck stops with him’ and what his actions would be instead of giving the impression of standing at the sidelines. In order to create confidence in the United States for foreign investors and monetary agencies the President has to be seen not as a figure head of America but as America.
The cash flow injection into the domestic auto market. Though Obama’s press release on Monday did state that Ford and the others had six weeks to restructure, this will not be enough. Two of the major stumbling blocks for any success on the part of the auto makers in making their product commercially viable are the current union contracts and the administrative salary structures. The union contracts are not realistic in this economy and with a stead fast refusal to follow the economic trends of the market by rolling back wages, resisting lay offs of redundant jobs, etc, the union is imploding upon the people that it originally sought to protect. The union must be made to step down from its views of standing firm or all will find themselves without a job. Secondly, with the heavy cash flow injection, not only by the American government but Canadian governments as well, the pay structure of the administrative side of the auto makers must reflect the artificial floatability that has been afforded to them; the salaries must be dropped, even on the CEO level, down to reflect the realities of being a current ward of the governments and not based on previous profit margins.
A lesson should have been learned with the AIG bonus scandal of government monies being used for other than the company’s commercial viability. AIG is the largest of the known companies that have received monies from the trillions released, however without transparency all monetary bailouts of financial institutions, though it may not be so, gives people the impression that this is not a rarity but a popular route used with taxpayer’s money. While there are motions for 100% taxability on those monies, the President needed to show that these types of actions were unacceptable immediately rather than have Tim Geithner take the flack, wasting time defending his Treasury Secretary.
To effectively stimulate the economy, investors need to have confidence in the fiscal and insurance institutions they are dealing with. The president’s economic stimulus package does not provide that confidence as investors are unsure which of the institutions are only fiscally salient because of government cash injections. Investors will not risk their personal monies unless they have a reasonable expectation that their returns will be solid. Banks that are no longer stand alone should be publically noted. In the short term the economic slump will dip sharply as these investors in these non-viable institutions fold up because of investor pull outs. However, in the long run the fewer institutions in the market that are fiscally responsible and solid will strengthen investor confidence and cause a gradual increase and stabilize the markets as the willingness to put monies forth in other economic areas isn’t reliant on government artificial stabilization.
The “On Time” bill before the American Senate. This bill legislates an extra import tax on trucks coming from and to Canada and Mexico to be collected at the Border before the trucks enter and leave the United States. Allowing even contemplation of this bill shows a lack of concern for the dependent nature of the United States of goods being purchased and sold in the other two countries. This is an overt protectionist action that will hurt the American economy not only from a manufacturing point of view but from a consumer point of view. If there aren’t the products to be sold, then the store that is supposed to be selling them will not receive their profits or will have to hike the price up because of the increased tax that would be passed along to the consumer. To stimulate an economy the supply must be economical to the consumer to bolster their confidence in the stability of the market.
There needs to be an immediate restructuring of the unemployment and welfare legislation on a nationwide scale. The citizenry of the United States who are collecting the various benefits are turning down minimum wage jobs because of the wage allotment ratio. Minimum wage does not allow a person to pay their bills and the fear that any monies earned by taking a minimum wage job against their welfare or unemployment monies makes people resist those jobs that are still necessary to create a stable job market and spending monies to use in other areas of the economy that stimulate further job growth. By increasing the allowable earnings before the state benefits are cut off or deducted there is there would be more effort into taking jobs that need to be done without people worrying about the damage it will do on their ability to pay their bills by doing so.
These are only a few issues that President Obama needs to deal with if he is to pull the United States out of the recession and instill confidence in the country as a power player once again. Once Obama has proven that he is willing to take responsibility rather than be sate in delegating his presidency then it will be a time for hand holding. For now, Obama needs to step up or step out.
Subversify Staff
This is a very interesting commentary from someone who I surmise is a neighbor to the North of us. There is much here that is truly wise, but it betrays a lack of knowledge as to how the United States Government (for good or bad) is actually run. Because President Obama defers to his Cabinet Members when questioned in such arenas as “The Jay Leno Tonight Show” does not for a moment mean that these Officials are not receiving direction from the President. No person can be expert in all areas, and so must surround himself or herself with the very best people they can find, and work with those people. He is presented options and the best of these options would, in turn, be presented to the public.
I believe that it is unrealistic for anyone to expect either the American President (or the Canadian Prime Minister) to have an immediate answer for every problem presented by a pundit (or a comedian.)
Your perspective is indeed interesting though, and some of your solutions would certainly be beneficial to Canada.
Mr Obama has been hailed by participants in the UK based Economic Summi, but insofar as solving all of the problems he inherited? Let the man at least unpack his suit case.
My opinion is that “The Buck Stops Here.” mindset is part of what got us into this proble. It was never the job of the President to make all these decisions. The president is supposed to be ‘Commander in Chief’ of the military and oversee the citizenry of the United States. That means doing things like making sure infrastructure gets taken care of and…oh, I don’t know…seeing to national disasters like New Orleans (I’m talkin’ to you G.W.) Also in is job description is chief diplomat. He is not a law maker. He is the check and balance of the law makers and his cabinet is an integral part of keeping him in check. I feel like he has done well in choosing people of opposing view points rather than a bunch of ‘Yes’ men/women which is what we have seen in the past couple of decades.
Unions are no longer what they used to be and should be abandoned as far as I’m concerned. I have yet to hear of anyone who is happy with their Union. When people started getting paid to be a Union officer as a full time job, they stopped being effective. My own experience with my professional Union was that they never returned my calls, letters or faxes until after a vote when they could say “too bad, so sad, this is what is going to happen.” Most Union officials are looking to keep their position and income as a Union official. After all, all you have to do is go to meetings and vote. Rolling back wages is deplorable in my opinion. However, if it is a choice between rolling back wages, letting people go or closing up shop what do you do? My own household has this issue at hand. Our wage earner is working for an agency and union who is thinking of rolling back wages across the board. That is quite scary especially when you consider that medical insurance deductions suck up 1/4 of the wages. I am of the opinion that new hires should be let go and wages saves, as most new hires are younger and have time and ability to re-locate and/or re-train.
As for the bonus scandal, that is so convoluted it is hard to find any truth in what occured. What we are being told is those bonuses where in effect before the bail-out. If that were true, someone with middle-ish moral reasoning would have given them back however people are greedy and more concerned for self that the whole. I think it should be written into the bail-out contract (If there is such a thing) what the allowable expenditures are.
Frankly I think we need import/export taxes on all countries across the board, not just Canada and Mexico. The reason being we need to get our own house in order. We have enough to support ourselves here but we have beed free handed with our resources much like a lottery winner who thinks the cash is never going to run out. Also these taxes may help us to manufacture more on our own turf rather than sailing and driving resources to other countries just to bring them back as trinkets, clothing and shoes. More homeland manufacturing means more jobs.
Which leads me to your next point, the welfare/job issue. Welfare has become such a huge beast. It was never intended to be a way of life but rather a stop-gab for widows, fatherless and truly disabled. In fact there used to be a ‘test’ you had to pass. If you could shovel or something like that, you did not need welfare. I am all for a return to that. The problem is where do you shovel? The job market in general is down as small places close their doors and bigger places are run by people willing to work 60 hours a week or more. My feeling is President Obama should put infrastructure at the top of the list and begin filling positions for that work with welfare recipients, rather than bidding contractors. We do need a lot of infrastructure work. Bridges are falling, roads need attention, powerlines need burying and levee’s need repair. If we start doing this we will not need to have as many people on welfare. [The amount of which, varies from state to state and is rarely higher than minimum wage] Some people are going to refuse to work though as we are at a point where we have 3 generations of people who have only ever been on welfare. An interesting social phenomena linked to this is that people who cannot qualify for welfare are replacing it with Social Security benefits. [For those outside the country, these are benefits given either for age or disability and it is higher paying than welfare with no time limits]. What’s the qualifying disability? Mostly Mental Health.
To finish up, I think President Obama has shown that he is willing to “take responsibility rather than be sate in delegating his presidency.” However the downward spiral we have gotten ourselves into here in the U.S. has turned into a whirlpool. It’s hard to swim in one of those. Let’s hope both he and us have the stamina for it.
I believe i’m still sitting with the fence sitters; the wait and see population. My political alliances were jilted at an early age and i remain suspicious and slightly unforgiving. Both our economic and our social problems are staggering, yet my greatest concern isn’t the economic aspects, but the social. An economy can right itself through concentrated social exertion. When the government manipulates an economy to give it a false appearance of prosperity, there is no incentive on the part of the citizens to take an active role in creating a realistic balance. The isolationist view of taking while the taking is good, continues. This is one of my underlying anxieties.
As you’ve adequately pointed out, we can no longer afford this mentality. We are in debt to China. We have a responsibility to our creditors to back the value of our dollar with our ability to generate funds. This, as you implied, demands a concerted effort to put people back to work.
In appraising America’s worth, one thing occurred to me that i wonder if people stop and consider. One of the toppling features of a failed economy is over-manufacturing. America, however, has not been the country over-manufacturing. Many of our companies have been carried overseas. Even the automobile industry has parts manufactured in other countries, than shipped to America for assemblege. This, despite the fact that our quality in steel, cotton fiber, appliances and techology is some of the best in the world. We have caved to the appeal of cheap products while sacrificing our own skills.
Has no one else noticed a rise in the stock market trade? People are responding to the stimulus package, or rather I should say the prospect of what the stimulus package is suppose to do, very favorably. It seems hope is coming back, and who do we give credit for that? Faith, Hope, and expected Happiness is what has kept this country and it’s people running through out history. I support Obama’s appeal to give that hope to the people, whether or not he is fully assured that it will come to fruition. To me, that is what this the stimulus package is: a bringer of something better…of hope.
Honestly I don’t know if we can look to the stock market as a reliable measure of how we are doing. Investors are gamblers and like their blackjack playing cousins they have a hard time quitting the game. They will speculate on nearly anything. I do not mean to downplay ‘Hope’ or Obama’s ideas, but I shudder to think that we are still looking at the stock market at all as a measure of our okay-ness. I am decidedly against stimulus packages of any kind. To me they smack of Politically Correct Welfare. Boosting our economy with a couple hundred dollars per family ‘gift’ is never going to work. My idea is to build from the bottom up. Rather than giving us financial viagra we need financial acupuncture. That is to say, we need to release blockage. Things like cumbersome student loans deserve a look and credit cards and the whole credit system also needs a look. We never had those before WWII and we got along better than now. Also people are going to have to work, so we need to create feasable jobs, plain and simple, then require people to do them to get their ‘stimulation’.
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