Despite what the critics say, 'Obamanomics' is working
http://www.thestar.com/business/art...t-the-critics-say-obamanomics-is-working?bn=1
At the moment, it's plain to most American pundits that the United States is an economic train wreck, with 9.7 per cent unemployment, soaring federal deficits and state governments flirting with insolvency.
The free-floating anxiety stateside finds expression not just in the upstart "Tea Party" movement that is dismayed with both Democrats and Republicans. One still hears smug assessments in Europe, Asia and, yes, Canada, that it was a Wall Street zoo with the bars down that led the planet to the edge of the abyss.
The Atlantic devoted its January/February cover story to America's dysfunctional governance, while The New York Times recently front-paged a story headlined "Party gridlock feeds new fear of a debt crisis."
As goes Greece, so apparently goes the U.S.
The declinism theme finds its most pronounced expression in disappointment with U.S. President Barack Obama, herald of hope and change, who, according to the punditocracy consensus, has delivered neither.
The water walker's public-approval ratings have plunged from 69 per cent on Inauguration Day to a current 47 per cent — proof enough for many in the U.S. and elsewhere that Obama is already a failed president.
You'd never guess from the hectoring Economist editorials about America losing its way and the hand-wringing of fiscal hawks at the U.S. Club of Growth that Europe's largest bank is on government life support, and that London's City financial district was no less a cesspool of greedhead capitalism than New York.
Or that the prospects of a Greek default have triggered fears about unmanageable debt in Ireland, Spain, Portugal and even Britain. And that two decades after the implosion of Japan's stock market and real estate bubbles, the world's second-largest economy has yet to emerge from recession.
Only rarely these days is the U.S. still described as the world's "sole superpower." Instead, observers are fixated on India and China, where bureaucracy and corruption command less attention in the West than a detainee population at Guantanamo Bay.
Still less attention is paid to China's backward statistics-keeping, so unreliable that the nation's official, wildly impressive GDP growth rate of close to 10 per cent is actually closer to 2 per cent. And that when Wal-Mart shoppers in America closed their wallets, riots followed among laid-off factory hands in China's industrial coastal cities. Which explains why Beijing was first out of the gate with government stimulus programs, soon followed by furious pump-priming not only by Obama but his counterparts in Britain, France, Japan and Canada, among others.
But thanks to the Obama stimulus, the U.S. is quietly experiencing the biggest negative-to-positive GDP swing in modern history, from "negative growth" of more than 5 per cent when Obama took office to a stunning 5.9 per cent gain in 2009's fourth quarter. Canada's productivity growth has stagnated while America's surged by 6.9 per cent in that same quarter — setting the stage for sustained robust economic growth in years to come. U.S. joblessness is at a lower rate than during Ronald Reagan's first two years in office. U.S. forecasters now project net new job creation of 300,000 this month, compared with stomach-turning monthly job losses of more than 700,000 in the winter of 2008-09.
America obviously has its problems, including projected record federal deficits of $2.8 trillion (U.S.) this year and next. And the national jobless rate obscures unemployment closer to 20 per cent among African Americans and Hispanics.
But America is on the mend. The stock market has rebounded by 68 per cent since its March 2009 nadir. Corporate profits surged 180 per cent in the most recent quarter. Inflation is quiescent and money is cheap: The spread on investment-grade corporate bonds has dropped to a current 1.63 per cent from 5.13 per cent when Obama became president just 14 months ago. Meanwhile, the vaunted euro has lost more than 25 per cent of its value against the U.S. dollar as the stability of the entire eurozone has come into question.
"Obamanomics" is working. Dan Greenhaus, chief economic strategist at New York-based Miller Tabek & Co., recently told Bloomberg News: "If [Obama] was a Republican, we would hear a never-ending drumbeat of news stories about markets voting in favour of the president."
International investors have taken the measure of Americas burgeoning deficits and largely turned sanguine. The bailed-out Wall Street banks have already paid back most of their government loans, with interest. General Motors vows to do the same this year. And as the ranks of the employed swell, income-tax receipts will grow and jobless claims will drop.
A bet against the U.S. has always been a bad wager. That's especially true as its nascent recovery gains strength.
_______________________________________________________________
Alleged good news for the country
though maybe not for some
http://www.thestar.com/business/art...t-the-critics-say-obamanomics-is-working?bn=1
At the moment, it's plain to most American pundits that the United States is an economic train wreck, with 9.7 per cent unemployment, soaring federal deficits and state governments flirting with insolvency.
The free-floating anxiety stateside finds expression not just in the upstart "Tea Party" movement that is dismayed with both Democrats and Republicans. One still hears smug assessments in Europe, Asia and, yes, Canada, that it was a Wall Street zoo with the bars down that led the planet to the edge of the abyss.
The Atlantic devoted its January/February cover story to America's dysfunctional governance, while The New York Times recently front-paged a story headlined "Party gridlock feeds new fear of a debt crisis."
As goes Greece, so apparently goes the U.S.
The declinism theme finds its most pronounced expression in disappointment with U.S. President Barack Obama, herald of hope and change, who, according to the punditocracy consensus, has delivered neither.
The water walker's public-approval ratings have plunged from 69 per cent on Inauguration Day to a current 47 per cent — proof enough for many in the U.S. and elsewhere that Obama is already a failed president.
You'd never guess from the hectoring Economist editorials about America losing its way and the hand-wringing of fiscal hawks at the U.S. Club of Growth that Europe's largest bank is on government life support, and that London's City financial district was no less a cesspool of greedhead capitalism than New York.
Or that the prospects of a Greek default have triggered fears about unmanageable debt in Ireland, Spain, Portugal and even Britain. And that two decades after the implosion of Japan's stock market and real estate bubbles, the world's second-largest economy has yet to emerge from recession.
Only rarely these days is the U.S. still described as the world's "sole superpower." Instead, observers are fixated on India and China, where bureaucracy and corruption command less attention in the West than a detainee population at Guantanamo Bay.
Still less attention is paid to China's backward statistics-keeping, so unreliable that the nation's official, wildly impressive GDP growth rate of close to 10 per cent is actually closer to 2 per cent. And that when Wal-Mart shoppers in America closed their wallets, riots followed among laid-off factory hands in China's industrial coastal cities. Which explains why Beijing was first out of the gate with government stimulus programs, soon followed by furious pump-priming not only by Obama but his counterparts in Britain, France, Japan and Canada, among others.
But thanks to the Obama stimulus, the U.S. is quietly experiencing the biggest negative-to-positive GDP swing in modern history, from "negative growth" of more than 5 per cent when Obama took office to a stunning 5.9 per cent gain in 2009's fourth quarter. Canada's productivity growth has stagnated while America's surged by 6.9 per cent in that same quarter — setting the stage for sustained robust economic growth in years to come. U.S. joblessness is at a lower rate than during Ronald Reagan's first two years in office. U.S. forecasters now project net new job creation of 300,000 this month, compared with stomach-turning monthly job losses of more than 700,000 in the winter of 2008-09.
America obviously has its problems, including projected record federal deficits of $2.8 trillion (U.S.) this year and next. And the national jobless rate obscures unemployment closer to 20 per cent among African Americans and Hispanics.
But America is on the mend. The stock market has rebounded by 68 per cent since its March 2009 nadir. Corporate profits surged 180 per cent in the most recent quarter. Inflation is quiescent and money is cheap: The spread on investment-grade corporate bonds has dropped to a current 1.63 per cent from 5.13 per cent when Obama became president just 14 months ago. Meanwhile, the vaunted euro has lost more than 25 per cent of its value against the U.S. dollar as the stability of the entire eurozone has come into question.
"Obamanomics" is working. Dan Greenhaus, chief economic strategist at New York-based Miller Tabek & Co., recently told Bloomberg News: "If [Obama] was a Republican, we would hear a never-ending drumbeat of news stories about markets voting in favour of the president."
International investors have taken the measure of Americas burgeoning deficits and largely turned sanguine. The bailed-out Wall Street banks have already paid back most of their government loans, with interest. General Motors vows to do the same this year. And as the ranks of the employed swell, income-tax receipts will grow and jobless claims will drop.
A bet against the U.S. has always been a bad wager. That's especially true as its nascent recovery gains strength.
_______________________________________________________________
Alleged good news for the country
though maybe not for some
