Submitted By Todd on November 23rd at 8:54pm
President-elect Barack Obama has signaled that he will pursue a far more ambitious plan of spending and tax cuts than anything he outlined on the campaign trail — a plan "big enough to deal with the huge problem we face,” a top adviser said Sunday — setting the tone for a recovery effort that could absorb and define much of his term.Barack's challenge will be to thread the needle on a huge economic recovery plan that will save the economy, while not destroying the country.
There were hints Sunday that a stimulus package might be extraordinarily large. Austan Goolsbee, a senior Obama economic adviser, charged that the Bush administration had “dithered” as the economy turned down and suggested that the incoming administration would take dramatic action. In the Democrats’ weekly radio address, Mr. Obama said that he would direct his economic team to craft a two-year stimulus plan with the goal of saving or creating 2.5 million jobs.That's a fairly conservative goal - one that doesn't sound very aggressive considering that Barack said in his radio address yesterday that...
"If we don't act swiftly and boldly, most experts now believe that we could lose millions of jobs next year," Obama said in prepared remarks for the weekly Democratic radio and video address.Which provides support for Obama's desire to do things like bailout the auto industry. But will he and Congressional leaders have the resolve to push for union concessions so that the car guys can move forward with the legacy costs that have them crippled? Barney Frank warned a few days ago that bailout doesn't mean union busting. If that's the case, what's the point in a bailout. Will the car guys be forced into bankruptcy so that new companies can be formed, with new capital, new management, and new technologies so they can move forward leading an auto revolution, rather than to continue its way toward extinction?
"We now risk falling into a deflationary spiral that could increase our massive debt even further," he said.
"This is not a bailout of the auto industry. The U.S. auto industry is doing just fine. It is a bailout of the United Auto Workers (union), and regardless of what happens to the bailout, it will simply prolong a period of poor performance," said Michael Hicks, an economist at Ball State University's Center for Business and Economic Research.Democrats will have to face the fact that their support of artificially high wages have led to the destruction of Detroit, just as artificially accessible mortgages led to the meltdown on Wall Street. How do they tell their partners, the unions, that now that they've climbed into power together, the unions going to have to take a hit? It seems unlikely to happen.
A trio of crises — housing, credit and financial — have badly damaged the economy, and financial analysts have projected the country's economic hardships will continue through much of 2009.Obama acknowledged Saturday that evidence is growing the country is "facing an economic crisis of historic proportions."These are the challenges to doing the right thing. We'll see what Barack is made of pretty fast.