This is Ilargi's intro from today's Automatic Earth:
Dear Mr. President,
A funny thing happened to me today. I saw this headline in the Wall Street Journal: "Obama Creates Faith-Based Office", and I thought: you can say that again, and in fact I often have said it. Then, of course, I read the article, and noted that it wasn‘t talking about the Oval Office once again following faiths based policy and the 'Change You Can Believe In' slogan, but that you had created an actual institution that is supposed to address faith-based initiatives, the White House Office on Faith-Based and Neighborhood Partnerships.
In this context, I was amused to read these words from your July 1 ‘08 speech in Ohio:
"I believe deeply in separation of church and state, but I don't believe this partnership will endanger that idea, so long as we follow a few basic principles."
Sounds a bit as if you believe [sic] that faith-based policy initiatives, and that's what we're talking about here, don't violate that separation. A sliding scale built in grey territory, I'm afraid. But then, I realize that in the US people risk being demonized for strictly applying this part of the constitution. The influence of religious leaders on American policies has been so strong for so long that the only options you have are to either change the constitution to have it accurately reflect reality, or to change your perception of reality in order to have it reflect the constitution.
Still, that's not the reason why my initial reaction was: you can say that again. I thought that because I had read your op-ed piece in the Washington post earlier in the morning, which addresses the urgency you say there is about your recovery plan before Congress:
"Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes."
I’m confident you are fully aware that people will lose jobs, savings and homes regardless of your plan, even, that is, if it does work. But let's focus on another point: What exactly do you mean when you talk about turning our economy around? Am I right to assume you mean getting back onto the same track it was on before? When everyone was borrowing money for cars, homes and toys? The economy that led to negative savings and enormous debts across the land? Or were you thinking of turning around back further in time? The past 8 years? Guess not, right? Nixon years: No. Bush 41: Nah. So Carter or Clinton? Eisenhower? Maybe not. What I mean to say is I suggest you stop using that "turnaround" phrase, it make little sense once you think about it. The country has to go forward, not turn around. And what lies ahead doesn't seem to look like what was before, unless you want to look at the 1930's.
"And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse."
This recession "might" linger for years no matter what you do. And you know that, sir. If you seek for people to believe in you, saying believable things would be a good place to start from. 5 million jobs lost? There were 589.000 in December, and that number has yet to be revised, which will undoubtedly be upward. At the current rate, 5 million more jobs will be lost by about the end of summer, and 14.5 million over the next two years. And the rate is in all likelihood accelerating. While your plan would create just 3 million. If it works, that is. Jobless claims in January rose to 626.000.
Unemployment has already reached double digits, just look at U6 numbers. Another important point for that believability: get rid of all the cooked government numbers that keep on being showered upon the nation. It's sort of surprising to see you write that the crisis at one point may no longer be reversible. There's that idea of the turnaround again. You need to define these things much better, it's all way too opaque, and you're not helping yourself. It's just feel good stuff. For you sir, from now on in, it all comes down to being believable. You're not. Not if people pay attention.
Then I saw this comment on your article, from AP:
".... economic stimulus legislation is growing larger by the day in the Senate, where the addition of a new tax break for homebuyers sent the price tag well past $900 billion. "It is time to fix housing first," Sen. Johnny Isakson, R-Ga., said Wednesday night as the Senate agreed without controversy to add the new tax break to the stimulus measure, at an estimated cost of nearly $19 billion.
Isakson said the new tax break for homebuyers was intended to help revive the housing industry, which has virtually collapsed in the wake of a credit crisis that began last fall. The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers. Isakson's office said the proposal would cost the government an estimated $19 billion."
Is this what you mean by turning around the economy? Is it a good idea to push people into mortgages for homes that are quickly losing value, so they can get underwater later this year or in 2010? Are we going to try to save the mortgage, banking and building industries by luring gullible Americans into debts they will not be able to repay? How would you define the lawful role of government in that process? Isn't it true most independent analysts agree that average US home prices have much further to fall? That just about the only homes that sell are foreclosed ones? That many of the new homeowners this legislation seeks to create will lose their jobs in the near future? That it's real bad government to willingly create debt traps for one's own citizens?
Back to your letter:
"This plan is more than a prescription for short-term spending -- it's a strategy for America's long-term growth and opportunity in areas such as renewable energy, health care and education."
It's time to let go of the fallacy of perpetual long term growth. It's nothing but a harmful mirage which has visited deep and unlimited misery upon peoples and their habitats around the planet. It's where faith-based systems do real harm.
"And it's a strategy that will be implemented with unprecedented transparency and accountability, so Americans know where their tax dollars are going and how they are being spent."
That one I'll have to see to believe. So far, I find that impossible. Harry Markopolos yesterday in his testimony on the Securities and Exchange Commission and the Financial Industry Regulatory Authority stated he would give FINRA an "A+ for corruption", for being in bed with the industry it's supposed to regulate. He based that conclusion on the time when FINRA was headed by Mary Shapiro, your pick to now chair the SEC, an organization Markopolos accused of gross incompetence. This sort of thing is no longer an incident. Bill Richardson, Tim Geithner (what on earth is he still doing in your administration?), Tom Daschle, the list is growing. Paul Volcker being elbowed aside doesn't look too good either. You have assembled quite a few clowns around you, and people have seen little accountability. It is already rubbing off on you.
Appointing Harry Markopolos to lead the SEC, as a bright voice today suggests, would be a good first step towards (re-)building the credibility that you are fast losing. He knows the material better than the SEC folks themselves and than teh Congressmen who invited him. Throwing out the Rubin, Summers and Geithner cabal is a good second step. Better explaining $900 billion plans to the public follows on its heels. Explaining what lies in the people's future, in non-ideological or faith-based terms, is a no-brainer.
There is no doubt that London's bookies have a booming business in wagers on how much longer Gordon Clown will be in office in Britain. Your people are losing patience and faith too, Mr. President. What'll it be, king or clown?