Thursday, March 05, 2009
The "Obama-Conned"
During the election, there were a lot of conservative pundits, especially of the big-think types who write for newspapers and magazines in New York and Washington, who decided to plump for Obama. Basically, their arguments were that he was "smart", was surrounding himself with smart people, and he wasn't a wild-eyed radical, despite his associations with Hyde Park 1960s lefties, his history as a "community organizer", and clear radical sympathies as expressed in his books.
I also was hopeful immediately after the election, even though I didn't go so far as to actually vote for him. I figured events would constrain him to find his inner Calvin Coolidge, as they did to Bill Clinton in his first term. But instead of the smart, reasonable guy we were hoping for, we're seeing the Hyde Park "community organizer" radical, channeling his inner Hugo Chavez.
These pundits are now withdrawing their support, and the ranks of the Obama-Conned are growing by leaps and bounds.
I also was hopeful immediately after the election, even though I didn't go so far as to actually vote for him. I figured events would constrain him to find his inner Calvin Coolidge, as they did to Bill Clinton in his first term. But instead of the smart, reasonable guy we were hoping for, we're seeing the Hyde Park "community organizer" radical, channeling his inner Hugo Chavez.
These pundits are now withdrawing their support, and the ranks of the Obama-Conned are growing by leaps and bounds.
The economic problem with consumption...
is that many products we have nowadays are actually quite good. A decently maintained car in a friendly climate can last 15 years or more. A modern PC can be used until it physically fails; unless you're a hard core gamer, you don't need to upgrade a PC every couple of years or so like we did in the 1990s. And many people can get away with cheap, micro-things like netbooks or tiny PC thingies that cost $300 or less.
Clothes are cheap, shoes are high quality, and all this stuff can last quite a long time if it's maintained.
So, many people can easily live "out of inventory" for several years before needing to buy much of anything beyond consumables.
This is why the "stimulus" won't do much; people will just save it. Even trying to loosen up consumer credit won't help much; the last thing any sane person wants to do now is go out and buy a new car on credit or go on a credit-card-powered shopping spree.
The US savings rate is up to 5% and rising, from near-zero in the middle of last year. I suspect most of this is non-savers paying down debt (which looks like economic savings), although many congenital savers are also saving even more.
Anyway, the Great Deleveraging continues, and will likely go on for a long time.
Clothes are cheap, shoes are high quality, and all this stuff can last quite a long time if it's maintained.
So, many people can easily live "out of inventory" for several years before needing to buy much of anything beyond consumables.
This is why the "stimulus" won't do much; people will just save it. Even trying to loosen up consumer credit won't help much; the last thing any sane person wants to do now is go out and buy a new car on credit or go on a credit-card-powered shopping spree.
The US savings rate is up to 5% and rising, from near-zero in the middle of last year. I suspect most of this is non-savers paying down debt (which looks like economic savings), although many congenital savers are also saving even more.
Anyway, the Great Deleveraging continues, and will likely go on for a long time.
