Sunday’s Talking Heads on Economy

August 2nd, 2010

Lazy Sunday, so I caught a lot of talking heads.

Very good discussions about the economy in general and the slow recovery specifically.

Fareed Zakaria, as he often does, proposed a great fiscal plan that has no chance of happening: let all the Bush tax cuts expire, but provide additional stimulus (such as extended unemployment and aid to states) in the short term  to make up for the loss of income. This will cut over $300 billion off of the yearly structural deficit right away. Unlike tax cuts (much of which will be saved by beneficiaries and won’t go back into the economy), aid to states and unemployment is money that is virtually guaranteed to go back into the economy.

Under this plan, tax rates would then go back to Clinton era levels when tax burdens were so onerous that we had the strongest growth in 3 decades and the budget was balanced.  Of course, since the Republicans have consistently filibustered any additional deficit spending and Democrats won’t repeal the middle class tax cuts, this is nice to discuss, but it isn’t going to happen.

Meet the Press had a great discussion of the economy with Michael Bloomberg, Ed Rendell and Alan Greenspan.

I am particularly struck by this “Wall Street and big business hate the Obama Administration” argument. It came up on both Meet the Press and on GPS  and the language with which they discussed it was particularly dramatic. Alan Greenspan said that he’d “never seen anything like it” and Chrystia Freeland said that many people on Wall Street regularly speak with “venom” and have a “feeling of betrayal” towards Obama.

This is a strange dichotomy.  On the one hand, the American people (myself included) feel like Obama and the Congress have been in hock to Wall Street, the banks, and big corporations, and want(ed) him to be tougher on them. On the other hand, many in the business community feel picked on and, despite higher earnings and about $1.8 trillion in the bank, aren’t  using that extra money to hire new employees.

This is a big topic and I’ll have more comments in the future, but just wanted to put it out for discussion while it’s timely.

Comments welcome as always…

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