January 11, 2009

Obama Economic Plan Faces Prolong Recession

The Blue Chip Economic Indicators poll of 52 economists, concludes that we are in a bona fide “recession.” Half of these experts believe we will recover somewhat in the third quarter of this year. The others contend that unemployment will not peak until 2010.

Merrill Lynch was the most pessimistic – predicting a 2.8 percent decline.

FedEx Corp. was the most optimistic -- forecasting just a 0.2 percent dip.

What ever. The economic road ahead will be rocky for an all-Democrat control of the White House and both houses of Congress.

OBAMA’S VIEW

Mr. Obama brushed off the forecasts. His economic team predicts his program of tax cuts and spending would create up to 4.1 million jobs – far more than the 3 million he believes are needed to lift the country from recession.

Congressional Republicans assert his predictions are faulty, and Obama says all predictions are "subject to significant margins of error because it is not known what Congress will do – even with control of all committees."

Spoken like a true “mug wump” – with his mug on one side of the fence, and his wump on the other.

Obama asserted:

“If nothing is done, economists from across the spectrum tell us that this recession could linger for years and the unemployment rate could reach double digits. They warn that our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world.”

CHICAGO DOUBLE SPEAK

The president-elect proposes a $775 billion (political short-hand for a trillion dollars) make-work program of roads and bridges.

Obama alludes to “tax cuts, state aid, and public works.” However, he provides no details – saying he didn’t want to limit negotiations with congressional leaders by outlining their limits in public.

In tried and trusty South Chicago double-speak, Obama insists:

"I want to be realistic here. Not everything that we talked about during the campaign are we going to be able to do at the pace we had hoped."

Republican members of Congress are insisting that any aid -- or politically popular tax cut – include relief for middle class wage earners as well as loans to states.

PLACE YOUR BET

The Bush administration appears to support Obama’s spending plan. Both men suggest that Treasury Secretary Henry Paulson ask Congress for access to the $350 billion remaining in the Wall Street and banking rescue fund.

Now it will be interesting to see the money sharks fighting for the last tidbits of political largess.

Bet on Wall Street.

By Lindsey Wilger Williams, retired newspaper publisher and syndicated columnist