NOTHING THAT THIS GOVERNMENT IS DOING, IS WORKING. This applies to other countries in the G20 as well.
Let's be clear here. I don't begrudge Obama and his team the efforts that they have exerted, but it seems to me that enough time has passed to allow a realistic assessment, broken down by current initiatives.
Finance and Banking
TARP appropriated $700 billion of which, roughly, $600 billion has already been spent. What has this produced? Easier credit? A stabilized residential real estate environment? A diminution in the number of "toxic assets" in the market? Unless you are a very poor test taker, you will already have guessed that the answer is e.) None of the above.
What has been accomplished is to spend $600 billion with absolutely no transparency, in a system whose own special inspector, Neil Barofsky maintains is especially vulnerable to fraud (http://online.wsj.com/article/SB123549501648160845.html). There are a handful of banks that have recorded a small (relatively speaking) profit for the 1st quarter but there is no disputing that these profits are artificially assisted by some pretty fancy accounting adjustments. And even the unprofitable Wall Street firms are getting ready to return to business as usual by larding up the bonus plans for 2009. If you don't believe me, chase the following link from the New York Times:
and just this morning, Monday the 27th:
It seems inevitable that the President will ask for more bailout money for the banks and it remains to be seen what Congress will say about that. Maybe 1000 crooks catalyzed (but were not solely responsible for) the present mess and I hate to think that there are 1000 more thieves who are lurking (or operating) to line their pockets further. The bank scorecards that will be released next week are likely to be ambiguous and we really won't know the financial system's true state for months to come.
That $$$ flushing sound just won't stop. Fiat wants to buy Chrysler, put in no cash, and use billions in American taxpayer money to support this...give me a break!? The senior debt holders are right; they are better off selling the company in pieces. GM is in even worse shape...I think we may end up naming May and June, "National Bankruptcy Months." The reality is that people who lose their jobs or think they might do so just won't buy new cars. The IMF projects that all major economies except for India and China will, in absolute terms, contract in 2009 and probably in 2010. India and China will show nominal growth but you have to consider that they are both way off their prior torrid paces. I suspect that we have only begun to see the beginning of job losses worldwide, and this does not bode well for car companies, Fiat, GM, Honda or otherwise. Without further ado let's just wait to see what happens in the next 8 weeks.
What could be worse than the Taliban taking over a country that possesses nuclear weapons? I wouldn't let their temporary retrenchment lull me to sleep and I believe that the President, senior military officials, Hillary Clinton, et al are scared stiff about this possibility, and well they should be. One potential solution here is to move troops stationed in Afghanistan to Pakistan since if we lose Pakistan, then we won't be able to support Afghanistan anyway. Those nukes really bother me. Here's a NY Times editorial on the subject from Monday the 27th:
I am in no position to judge what is torture and what isn't or whether this treatment is appropriate given the circumstances. When I first heard the term "waterboarding" I thought that the CIA had come up with an ingenious method to lash a terrorist to a surfboard and drive him around a lake or something. In other, calmer times we could perhaps afford to engage in the inquiries that certain congressional members are itching for. But right now we have too many simultaneous initiatives underway to deal with far too many problems. If there is any risk that these so-called torture inquiries will distract from the other work being done and/or could cause national/international furor, then I think we need to find another way to deal with it.
Other Efforts Underway
Health care, student loans, the Middle East wars...the list seems to grow each week. I won't go into all this here but I strongly believe that you have to prioritize activities and that the Pakistan situation is priority #1. After that, the economy and getting people back to work again is #2. The rest can wait. And the answer certainly isn't always to just run the $$$ printing presses in Washington.
What Other (shoes) Will Drop in the Near Future?
Commercial real estate is in turmoil and billions (to put it mildly) are at risk. Transportation and lodging (airlines, hotels, rental cars) are getting killed. The print media is in trouble. Unemployment is poised to continue to climb dangerously.
As a rule, Americans are resilient and optimistic, and today's favorable polls reflect that spirit. I fear that if we continue to let these problems pile up, without making substantial progress quickly on a few, things might turn very sour, very quickly.