Listening to President Obama's speech last night I was very impressed with his grasp of the vast number of difficult issues that face our nation. I support him in addressing these problems head on -- with optimism, energy and forthrightness. He said, "I get it" -- I believe him.
Now, having laid out a vision for all that ails us, I can't help but think that the president is going to be playing out a fantasy. His epic journey to the White House has reinforced the President's conviction that 'anything' is possible, but the real question this morning is whether 'everything' is possible.
In his speech he discussed his goals to bail out the banks but not the bankers, cut the deficit in half by the end of his "first term" after increasing spending to a level not seen in modern history and putting the Iraq war back on the actual budget instead of pretending its not (bravo), increasing spending on energy, education, health care, becoming more active in resolving middle east conflicts, resolving the social security dilemma and much more -- all in a bi-partisan manner.
On this occasion everybody appeared very civilized as the President enumerated all of his goals and aspirations while admitting these were difficult times, he set the bar very high. The congress was very civilized in standing up and sitting down over and over again in front of the media. It will be a real test to see if they can remain that civilized when they have to actually do some work and merge their differences.
President Obama said his team was reviewing the federal budget line-by-line and after only a preliminary review had uncovered about $2 trillion in savings, mentioning in particular Agra-business subsidies and Medicaid as examples. He pledged on record a tax cut for 95% of Americans and went as far as to state the checks are already in the mail. I think this tax cut may come down to semantics, but that will not be the case for people earning over $250,000 per year. They should expect a tax increase.
Among the issues discussed was the importance of the family in participating in the education of the nations youth. He asked for greater volunteerism as a way to enhance the advancement of the cause and made it clear that education and research would be the major contributors to our nation's future economic growth.
The financial community, banks, and Wall Street leaders alike, can expect to be under the microscope for the next four years, while spending on infrastructure, education, and clean renewable energy will all help science, business, and construction. This does not mean that the financial stocks are going to be bad investments as they rise out of the ashes, or that alternative energy is a sure bet.
Obama covered almost every issue of the day, although not in equal detail, and I am afraid that to be focused on 50 topics is not to be focused at all. I think that if he can accomplish 20% of his mission he would be a success. From my point of view, tax simplification, a reduction of deficit spending, getting liquidity back into the marketplace and raising the education level of the masses would be well received in the business community.
Our new president is to be applauded for his aspirations and conviction. However, his belief that government can legislate improvements may be a fatal flaw. A vibrant economy requires the focus, agility, and resourcefulness of private enterprise. It is the government's lack of oversight that may be the primary reason we are in this mess. Decades of relaxing important business regulations allowed businesses to use their inventiveness to go astray and that they did. If the president wants to get the country back on track he will keep a watchful eye on the Securities and Exchange Commission as much as he does the banks.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.
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Reader Comments (Page 1 of 1)
2-25-2009 @ 5:55PM
dhelton824 said...
I look at Obams track record as a senator and hear his speach and start seeing a lot of smoke .
2-25-2009 @ 7:28PM
therodt said...
I think he actually has a grasp of the situation and obviously Bush and gand didnt or we would not have the situation. He won because of the situation. Plain and simple. No one believes Mc Cain had a clue or really has a clue about it. The fantasy is the fiscal conservitives. They were not screaming and going nuts the past 8 years of deficit spending.
2-25-2009 @ 7:45PM
Rodney said...
Pres. Oboma may try to act like Mr.King BUT HE IS NOT MLK nor will he ever be!I grew up watching MLK and as far as I can see HE was a good man with strong ethics but Pres. Oboma is just a fluke and in 4 yrs we will see who's right or wrong and I don't beleive it will be Oboma or Pelosi!!!
2-25-2009 @ 8:46PM
william lindblad said...
First, it was a good speech. If he gets 20% he will do good, if he gets 40% he will make the top ten of all U.S. Presidents. This man does worry me, but I do think that he is sincere.
Yes, he did cover many subjects and the agenda that he proposes is mighty indeed. He does have one small problem, the same one that FDR had, it's called Congress. You can push just so far or you run into them, or as Franklin did, them and the Supreme Court. We do have checks and balances, and because of this, our basic system still remains intact.
Obama mentioned overhaul of regulation of the marketplace. Since we have a great deal of this already, it becomes a dubious remark. We really don't need more, we simply need what is present to work. This brings me to - WHO, WHY AND HOW. Three little words that ask the question - JUST HOW DID WE GET INTO THIS PICKLE?
The novelist, Arthur C. Clark of 2001 fame said that "Truth is what is commonly held". In our present situation this is a very interesting statement. Just what is the truth? CNBC's David Faber presented what would probably meet Clarks criteria in the TV show House of Cards. It's good, matter of fact, it's damn good, but is it the truth? The blame, according to the show, is spread over many people from Alan Greenspan, through government, to those that bought property, either as investors or as those that were scammed into a false belief. Obviously, all were involved. That seems to answer the questions of the three little words.
Do some deep thought on this and you may find your initial belief a tad murky.
This is my view - the events of 911 brought the country and it's economy to standstill for at least a month. Thereafter, it remained sluggish as everyone was in fear or caution mode. Later Alan lowered rates to get it going and the rest is history. Still later the Bush administration worked to push the "American Dream" of home ownership and Alan opened the door for negative amortization. While we were all participants to greater and lesser degrees in all the boom that followed, the fall out is blamed on greed and stupidity. Certainly true as there was enough to go around.
Since there was a ton of regulation during this period - how will more help.
The regulation failed because of something close to a statement by a Victorian era politician. "Power tends to corrupt - absolute power corrupts absolutely" - Lord Acton. The quote does not fit exactly as we had a derivative. The President of the U.S. is frequently referred to as the most powerful man in the world.
Alan Greenspan became the 2nd. During his tenure on the Fed he became an economic father figure and brought this Country through many tight spots. He became the guru and someone not to be heavily criticized. In the entire world, the only re dissident that this man had was J.C., Trichet, I mean. We were following the advice of Alan, but Alan was not in charge of oversight. It is sort of like:
a.)The boss is always right
b.)The boss is always right
c.)When in doubt-see a. or b.
I think this sums it up. Everyone is waiting for Alan to tell them what to do. Since he was not in charge, he tells the oversight people nothing. Of course, they do nothing - as they see nothing wrong.
C'est la vie. This is why Alan says "this will happen again" at the end of House of Cards. He knows what happened.
There is a way to prevent this in the future but it would probably take a Constitutional amendment/or a political miracle. The establishment of two independent Congressional economic oversight committees. Both comprised of 7 members. 7 Democrats. 7 Republicans.
They meet separate and unite but once a year. In this manner these people would be under pressure to actually watch things as to be the one that does not see a crisis, far in advance, would become a political pariah - to their respective party.
2-25-2009 @ 9:18PM
Beltway Greg said...
I love Obama as a concept and it seems that a concept is all that I'm getting. I don't know why he gave a speech without specifics especially when we are in such a precarious time? Now we're going to stress test the banks and this is going to go on for another six months? Just call "Our Pal Warren" and Charlie Munger and they'll be able to sort through the lot in say 60 minutes. Raise more capital? Are we kidding? Unless there are some I bankers hiding on, to quote Pink Floyd, "the dark side of the moon," just who is going to commit the cash. Shine on you crazy diamonds.
2-26-2009 @ 11:50AM
Iridium said...
The Obama depression will make the 1930's look like a cakewalk.
He's also playing a Clinton. He'll cut the deficit by half but it will be half of the current deficit which is already 3 times larger than last year.
In the end the deficit will still be twice as high as the previous deficit but half the current deficit. SO Obama will have cut the deficit but we will still be spending far more money than we should.
Its what the definition of is is all over again.