Charlie Rose

tartufe  07/27/2009 04:29 PM Report

DavidD - Nice program. Esp. like 4. 50 cent gas tax.

Also agree with Winter. Obama also has lost me on letting the scumbags a la Citigroup, AIG, Paulson et al get away with decimating the world economy with serious Madoff-type jail time.

His (Obama's) not stading up to the MI Oigarchs re Af-Pak also contributed to my defection. Alas, Sarah Palin will be no better in either regard however. The toilet is what we deserve.

REMant  07/27/2009 01:46 PM Report

My fear is that the run up in the stock mkt this past week is due to ppl trying to buy the dividends of those cos whose profits have largely been due to cost-cutting, including layoffs and terminations, or, just as bad, assuming that this past performance will be reflected in the future, but, of course, a lot of investors, esp the big ones, are merely trend-riding. Cos have been fairly aggressive in shedding jobs, indicating that the jobs could not have been essential in the first place, which explains why unemployment has risen more than in downturns past. The jump to stocks has been no doubt also due to few opportunities in either bonds or real estate, which must be causing a certain desperation at this juncture. Stocks historically go up and down quite violently in situations like this until I believe all of the inflation has been wrung out. Stock prices track inflation almost perfectly, back at least to 1966. As the mkt price has risen the country has declined in the same proportion, because the way to measure inflation can only be in real productivity increase or decrease. As I've remarked several times before when the stock mkt goes up the country as a whole MUST be poorer. I see no reason not to consider this a bear mkt or sucker's rally and indeed I hope it is because without structural change and significant deflation to bring it about, we are not going to be really turning this economy around. In other words, this is like insurance cos making money by denying claims and cutting participants. As in the past, if you hold the inflated assets you may consider yourself richer or the recession over, but you are in an ever decreasing pool of ppl in a position to be thinking that. To consider employment a lagging indicator is to consider it a superfluous factor, when it is anything but.

Yet Orzag is avoiding the question of structural change, and talking like a Keynesian. Okun, BTW, was a Yale prof, economic adviser, and a Keynesian. The additional GDP growth will not presumably be private sector activity. What else could they have done? Nothing is what they could have done, and they might well have saved ordinary ppl a lot of money, in the process, because every $ that they used in relief so far at least appears to be wasted in terms of economic effect - AP reports a poll that 58 percent of Americans now believe it will end up that way, a 100% reversal from Jan - and it WILL end up in the pockets of the wealthy.

There are, of course, some good signs in the economy, but these all relate to lowered prices, which is also the most effective way to see to it that those most deserving of bearing the costs of all this do bear them. One should keep in mind that the Depression had several phases, and altho it could be said to have been over fairly quickly, the economy remained in the doldrums for the better part of a decade.

DavidD  07/27/2009 12:05 AM Report

Mr. Orszag made some damaging rookie errors with the 2010 budget, which have steepened the climb for President Obama to turn this country around. These are primarily the wildly optimistic growth assumptions and lack of any plan for reducing the deficit to a sustainable level at some date certain in the future. Even the NY Times reported that President Obama "...does not have a realistic plan for reducing the deficit." China started running around worrying about the dollar. The President looked like a fool and job one for this man is to make him look good.

Well, that is unacceptable. We need such a plan. Mr. Orszag has a wonderful opportunity for a "mulligan" in the mid-year release. Some key things he should do, with the general caveat that he will work with Congress to take equally meaningful action if these proposals are not accepted:

1) Set a date certain for a balanced budget (say 2017).

2) Remove the Social Security deficit through tax increases and spend reductions. Assume we will raise the payroll tax cap to infinity, instead of limiting it at 106,800. Further, assume we will implement some form of progressive indexing, such that the wealthy receive lower Social Security benefits. This will take a Social Security Commission.

3) Assume the Bush 43 tax cuts will be reversed across the board in 2012. Bush 41 had the courage to raise taxes, even though it meant he violated a campaign promise. It was the right thing to do.

4) Levy a $0.50 tax per gallon of gas (or equivalent revenue from the cap and trade bill), which folks who make less than $50,000 per year can take as a tax credit.

5) Implement a graduated corporate tax rate. Corporate income over $100 million per year would pay 45% instead of 35%; income over $1 billion would pay 50%.

6) Cut the DOD budget down to about $300 billion per year over the next 7 years. We must also reduce our Iraq and Afghanistan commitments to a bare minimum.

7) Eliminate the Department of Education. Let the states handle it.

8) Assume that comprehensive health care reform will be implemented that bends the curve significantly. This will require a Healthcare Commission. This will mean a mechanism to implement the best practices of other developed nations. Lay out those practices, whether they involve rationing of care in the last year of life or restricting people’s ability to choose more expensive options when a cheaper one is just as effective. Consider taxing say 50% of corporate healthcare benefits as income.

This next major budget release may be the most important document released by this President. It has to set us on the right path to a balanced budget, laying out specific revenue increases and cost cuts through discrete, easy to explain actions, which Congress can then choose to change. It should be accompanied by a series of common-sense charts, like those in the link that follows; this should be e-mailed to everyone Obama can possibly send it to.

http://www.gao.gov/cghome/d08446cg.pdf

Sir_T  07/25/2009 08:26 PM Report

Thanks Winter, I'll check out the Bloomberg link. And you're right. The 'Publicans woulda done the same thing.

This interview would have been better if there had been an independant economist at the table as well. I mean it's not like Orszag was going to say..

"Boy we sure blew it with the stimulus package".

winter  07/24/2009 11:57 AM Report

http://www.bloomberg.com/apps/news?pid=20601087&sid=aUAkdBKH9tJk

The Bloomberg news item above is the reason I personally am no longer in the Presidents corner. He let the crooks get away. Raising salaries and still including bonuses with taxpayers bailouts intended to increase lending to small businesses just boggles the mind as to its audacity. This is like giving your brother-in-law a few months mortgage while he's in need and he goes out and buys a motorcycle with it. ( ...true story, right Neal F.!!) I just may be turning into a republican ...nah, they would have done the same thing.