Thursday, January 08, 2009

Obama likes to hear himself talk

I didn't hear much substantial (and even less new) in Obama's supposedly major press conference on the economy. It was mostly a re-hash of his old material, just with added filler.

Part of me is glad he didn't introduce any significant new plans that would introduce further economic uncertainty, but this also reinforces my perception that Obama has no idea what he's talking about.

I'll repeat something I said before, to the limited extent that Obama has given us anything specific, some of those things are worth doing to some degree. Improving the electrical grid is probably a good idea, improving federal facilities for efficiency is probably a good idea in a very generic sense, etc. But most of it can't rightly be considered particularly stimulative to the labor market or the economy generally.

One of the few new things is just stupid:
To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.

Ok, there's a reason so few wanted to install these things, even when oil was a hundred dollars a barrel more expensive than it is now. For the most part, solar and wind aren't economical. To make matters worse, subsidizing the manufacture and installation of the not-quite-there technologies is an unwarranted diversion from the business of making the right stuff possible.

"Alternative" energy is a pretty vague term. To say we'll double production is at best meaningless, and at worst colossally stupid. Ethanol anybody? Remember, Tom Vilsack will be the Ag. Sec.

Jobs to make fuel efficient cars... that nobody wants to buy? Translation - The Big Three will become permanent wards of the Federal Government, because these mandates will guarantee their failure in the free market.

There's a lot of hyperbolic crap in the speech, but I have to call this one out:
I understand that some might be skeptical of this plan. Our government has already spent a good deal of money, but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy. That’s why the American Recovery and Reinvestment Plan won’t just throw money at our problems – we’ll invest in what works. The true test of the policies we’ll pursue won’t be whether they’re Democratic or Republican ideas, but whether they create jobs, grow our economy, and put the American Dream within reach of the American people.

Difficult though it may be to believe, there are signs that the TARP has had a meaningful effect on confidence in the financial sector. And the $250bn bank capital program should, though fractional reserve banking, support about $2 trillion in bank loan assets. Why do I get the feeling that Obama's $750 bn - $1 tn plan won't give us the same economic multiple?

In my mind a "success" would be a multiple of one -- just enough extra stimulus to offset the inefficiencies of debt and future taxation. So the best I'm hoping for is that the plan has little to no lasting effect. And there's actually a decent possibility that could happen, so I won't go as far as to say we should just light the money on fire.

"We'll invest in what works"? Actually, you're poo-pooing the one thing that sorta kinda worked, and you're going to be engaged in a lot of stuff that has never worked before in the past.

And while I'm at it, all of this bi-partisan non-ideological pragmatic talk is still just code for saying what Obama says is right, and if you disagree with him you're being ideological.

Others have said this too, so I'm not expressing a novel idea here, but ideology is just another way of saying "a model for how the world works". There's no such thing as non-ideological. So-called pragmatism is itself an ideological position that assumes the Agent has an accurate model of the world. Some of what Obama says will be right, some wrong, but to disagree with him "ideologically" will not necessarily be an assault on reason itself.

No comments: