Commentary Magazine


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Re: Increasing Uncertainty

This segment on CNBC was linked to by the Drudge Report today, but it represents nothing new. Watch some business news and watch the markets. It isn’t like the economic indicators have been greeting the Obama administration’s moves warmly. To the contrary, stocks have fallen more than 2000 points (now below 7500) since the election, consumer confidence is tanking, inflation is now up and gold has soared. Combining the weak performance of the Treasury Secretary and Obama’s “we’re falling over a cliff” rhetoric, the Obama administration has been freaking us out for quite some time now.

As Abe points out, the Obama-administration geniuses are nowhere to be found. Yesterday was telling: While Obama was back in campaign mode whipping a crowd in Arizona into a frenzy over the prospect that millions of them can get relief from not just default but underwater home mortgages, bank stocks dropped like a stone. Perhaps the prospect of bankruptcy judges writing “cram down” mortgages, and forcing TARP recipients (many of whom took the money under duress from Hank Paulson) to rescue more defaulting borrowers isn’t what the economy needs after all. The current administration is using fear tactics to promote an agenda that itself is scaring the major players of our economy (including consumers).

The result of a never-ending stream of bailouts and an ever-growing federal government (and accompanying deficit) is a reeling private sector. That is not the way to get out of a recession.