Robert Reich: A Report Card on Obamanomics, Approaching One Hundred Days

[flpoljunkie]

TUESDAY, APRIL 21, 2009

A Report Card on Obamanomics, Approaching One Hundred Days

The Administration is coming up to that magical 100-day mark, at which point measures are taken of how a new president is doing. As a university professor I'm accustomed to giving grades. So here's my report card on Obamanomics so far:

The 10-year budget gets an A. It's an extraordinary vision of what America can and should become, including universal health insurance and environmental protections against climate change. And the budget takes a little bit more from the rich and gives a little bit more back to the poor and lower middle class, which seems appropriate given that the income gap is wider than it's been since the 1920s. I'd give the budget an A plus except for its far-too-rosy economic projections.

The stimulus package gets a B. Good as far as it goes but doesn't go nearly far enough. $787 billion over two years sounds like a lot of stimulus. But the economy is operating at about a trillion and a half dollars below its capacity this year alone. And considering that the states are cutting services and increasing taxes to the tune of $350 billion over this year and next, the stimulus is even smaller.

The last grade is for the bank bailouts. I give them an F. I'm a big fan of this administration, but I've got to be honest. The bailouts are failing. So far American taxpayers have shoveled out almost $600 billion. Yet the banks are lending less money than they did five months ago. Bank executives are still taking home princely sums, their toxic assets and non-performing loans are growing, and the banks are still cooking their books. And now the Treasury is talking about converting taxpayer dollars into bank equity, which exposes taxpayers to even greater losses.

So that's the report card. An A on the budget, B on the stimulus, and F on the bailout. On the whole (given how I weigh grades) that gives Obamanomics a C-plus. Not bad given the magnitude of the problems Obama inherited. But by the same token, not nearly good enough.

posted by Robert Reich

http://robertreich.blogspot.com/2009/04/report-card-on-obomanomics-approaching.html

[WI_DEM]

1. I think Reich is right--and I'm a big fan of Obama too. Enough bank bailouts.

[PBS Poll-435]

2. The bank bailouts were a September '08 Bush (/Paulson) idea

TRAP!/TARP

Short memories?

[Egnever]

3. Extremely short

[ClarkUSA]

6. Amoeba short

[flpoljunkie]

4. Except Geithner is implementing Paulson's original plan.

[PBS Poll-435]

5. What additional $s have been spent?

And the banks have recovered nicely.

Only one of the "big banks" is in "trouble."

[flpoljunkie]

7. None--yet! Paulson's plan was to purchase the 'toxic assets' which Geither plans to implement.

I would question that there is only one 'big bank' in trouble.

[PBS Poll-435]

11. Oh, come on...

One is in trouble.

One is in danger.

That is it, I believe.

[flpoljunkie]

16. Now that's more than one, isn't it? The latest from Reuters on the 'stress tests.'

SCENARIOS-After stress tests, what next for U.S. banks?

April 20 (Reuters) - U.S. regulators and the nation's largest banks have nearly completed 'stress tests' to determine how well the lenders would fare if the recession proves to be deeper and longer than expected.

Citigroup Inc, Wells Fargo & Co, Bank of America MetLife Inc and GMAC are among the 19 lenders under scrutiny who may get government help to strengthen their balance sheets following the May 4 announcement of the results.

On Friday, officials will release a document explaining the underlying stress testing assumptions and how to interpret the results. Regulators are expected to take care that test results do not put weaker banks into a tailspin, but may set some tough requirements on how the banks should rebuild.

Below are the government's options to help restore the banks to health:

http://www.forbes.com/feeds/afx/2009/04/20/afx6312744.html

[PBS Poll-435]

18. No bank will fail the test

Citi is the only bank that is immediate danger according to my sources.

BoA will recover and Wells Fargo will report results tomorrow.

[flpoljunkie]

21. You may well be right, but some are likely to need more taxpayer money, in any case.

[Egnever]

12. nm misread your post

[depakid]

8. Take responsibility much?

Gaithner and Summers et al. signed onto and own these policies now- they've furthered them and the administration will be held accountable by the public for the for the results.

[PBS Poll-435]

10. I am quite pleased with the results

Short term problems have been resolved, I believe.

[FrenchieCat]

9. I'd say that Reich should be giving an Incomplete on the Bank Bail out

and its results. He simply doesn't really know how it will all turn out,
and that is what he should admit to.

[Nicholas D Wolfwood]

13. You got it right there.

Then again, he probably shouldn't be giving a report card on these issues at all right now. It's way too early.

[cali]

14. um, he's the economist

with a pretty good track record. and economists make predictions based on information all the time. you might say that's a big part of their jobs.

[FrenchieCat]

19. And?

He giving a grade before seeing the outcome of a situation that almost did us in.

An incomplete is reasonable. F stands for failure, and that has not been confirmed
as of yet....to the chagrin of many.

[flpoljunkie]

20. Geithner agreed that 'all options were on the table' in response to Elizabeth Warren's question.

This, at the TARP Congressional Oversight Hearing this morning, chaired by Harvard professor Elizabeth Warren. She seemed pleased with his response. Warren had asked him about the three things that could be done with the banks which are insolvent: liquidation, receivership or reorganization, or subsidization.

http://www.c-span.org/Watch/watch.aspx?MediaId=HP-R-17653

[high density]

15. Need more stimulus

But the idiots in congress and the media will not let that happen.

[flpoljunkie]

17. Yes, that's is a very serious concern for our economic recovery--not enough stimulus.

[grantcart]

22. An F on the bank bailouts???

Yet the banks are lending less money than they did five months ago


Five months ago we were beginning the biggest bank run in the history of mankind. Think panic of "Its a Wonderful Life" times 100.

Washington Mutual, the largest retail banking operation in the country, suffered a withdrawal of $ 50 billion. That is what the comparison should be with, not the amount of lending.

Back from the cliff the system is showing some signs of thaw. In retrospect nobody would have done things the same way but to give it an "F" just shows how selective the memory can be.

[PBS Poll-435]

23. Washington Mutual no longer exists

Sucked up by Chase Manhatten (JPMorgan Chase & Company.)


And things are much better in lending than the media will report.


Look at the ReFis. SBA lending is looking nice in Q2 and Q3.