Brooks: this time next year, Obama will either be a great President or a broken one

Rhoda Klapp

Or maybe somewhere in between great and broken. The great thing about journalism is that nobody ever expects to have their predictions reviewed in retrospect. However, that raises the question of whether there will be a New York Times in a year to read his apology in.

Cut & Paste - the juice.

Fin de siecle:

Market Ticker - 3/1/09:

We are in this mess because we created too much debt for the balance of the system. That is, too many people bought houses with too much leverage (that is, too much debt was being taken on compared to actual production represented by salary), companies were purchased with too much leverage (the "M&A" game) and so on. Mortgage-backed securities, credit-default swaps, all of these are forms of debt and their issuance was deregulated to the point that people's "animal spirits" drove prices much higher, as leverage was employed at higher and higher levels.

It is obvious that you can't do this forever; ultimately someone asks to be paid with actual production (instead of more shuffling of paper) and oops - there's not enough production to pay with!

You get BOOM!

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James Quinn - 5/1/08:

The Gross Domestic Product of the United States is $14.4 trillion. Consumer spending makes up $10.2 trillion or 71% of GDP. Government spending makes up $2.9 trillion, or 20% of GDP. Domestic investment makes up $2.0 trillion, or 14% of GDP. The trade deficit of $700 billion reduces GDP by 5%. President Obama has quite a dilemma in trying to revive this economy. The American consumer has borrowed from their homes and credit cards to fuel a colossal spending spree in the last twenty years.

The dilemma is that the U.S. economic growth during the entire Bush administration was a debt induced fraud. From 1953 through 1983, consumption as a percentage of GDP ranged between 61% and 64%. Consumers rarely, if ever, borrowed against their houses. Paying off your mortgage was a goal of all families. A normalized level of consumer spending at 65% of GDP will require consumers to spend at least $1 trillion less per year. Less consumer spending will also contribute to reducing the trade deficit. The Federal Reserve and politicians running our country see a $1 trillion reduction in consumer spending as a disaster. Their positions of power would be in jeopardy.

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I am afraid that Obama inherits a 25yr boom that has finally turned to bust. We are going Japanese.

RMH

"He is asking Congress to behave and submit in a way it never has."

You mean like more subservient than during the Iraq war with fake evidence and false doctrines, and during the original stimulus bill, where oversight is still not in place......

Verity

My main concern is that the domestic agenda is so all consuming that the White House will miss one of the world’s many crises coming to the boil.

James, "the world" doesn't have a vote. If he concentrated on domestic issues and succeeded, I'd be impressed. Charity, and solutions, begin at home. Tony Blair had his sticky fingers in every problem in the world, and the ridiculous Gordon Brown also sees himself as an global financial problem solver.

Rhoda K asks: "whether there will be a New York Times in a year to read his apology in." Not if it continues to diminish at its current rate of loss of advertising revenues. It couldn't happen to a more deserving paper, except, The Guardian.

RMH - Y-a-a-a-w-w-n

BrianSJ

Ref Rhoda's remark. Could this question be turned into something that pb could bet on? Perhaps Paddy Power would like to define great and broken and start a market?
My money goes on 'broken' at almost any odds, based on his appointments.

Dean

I don't see why Obama should have only a year to prove himself. What will happen once the year is up and the economy is still on the doldrums? Will the Republicans remove him from power and install their own man? Is he on probation or something? I think not.

Given that George Bush made a mess of virtually everything he touched over what felt like an interminable eight year period, I suspect Obama will still have plenty of life left in him four years from now!

porkbelly

What will be interesting to see in a year or so, when the consequences of this vast half-baked stimulus plan begin to reveal themselves in an avalanche of corruption, waste and bloat, how the Obama inner circle will react. I have a funny hunch that the essential ruthlessness of people like Podesta, Emmanuel and the like (and Dear Leader too?) will reveal themselves just as with Brown, Mandelson & Co. I'm going to be first in line for a front row seat at the Hillary show trial. I'll help Madame DeFarge with her knitting...

Verity

I love George Bush! He didn't do everything right - who does - but he is a stand-up dude and we should not misunderestimate him.

Conservative Cabbie

Dean

"don't see why Obama should have only a year to prove himself. What will happen once the year is up and the economy is still on the doldrums? Will the Republicans remove him from power and install their own man?"

No, he still has his four years, but there are congressional elections in 2010. If the perception is that the stimulus package has failed and that the vast sums of money have been spent for little gain, then the voters may choose to give the Democrats a kicking. Whilst Obama has a longer grace period than a year, Democrats in congress don't, their approval ratings are already at a record low. Unfortunately for Obama, bad midterms will badly handicap his future plans.

Conservative Cabbie

Verity

Re New York Times

I saw a report that the NYT could be filing for bankruptcy at around May time. Apparently it has a large number of debts due to be paid around that time which it can't handle.

Maybe the obsequious fawning of th media towards Obama during the election (particularly the NYT) was their attempt to put themselves front and central for a piece of the bailout pie.

Conservative Cabbie

Verity

http://obamaclock.org/

What is it they say about a watched clock?

Verity

I don't know, Conservative Cabbie. What is it they say about a watched clock. I know they say a watched kettle never boils ...

Good news about the monstrous NY Times, though!