Clinton to the Rescue? Yikes.

President Obama, apparently having emptied his bag of economic tricks with the stimulus package and now bereft of ideas for what to try next, is soliciting advice from former President Bill Clinton who, according to the above-linked article:

… presided over the 1990s economic boom …

and was the last president to turn a budget surplus since Richard Nixon had a miniscule surplus ($3 billion) in 1969.  Never mind the fact that a chimp could have done the same thing in the late ’90s, in light of the stock market bubble, the dot com bubble and the explosion in PC, internet and cell phone technology and manufacturing (all of which has since been out-sourced to China and others).  Clinton was too busy enjoying a fine cigar with his intern to have even known what was going on. 

So what’s Clinton likely to advise Obama to do? Provide more stimulus money for alternative energy?  Give more tax breaks to industry?  Implement more free trade deals?  Yeah, granting China MFN (most-favored-nation) status worked out real well, didn’t it, Bill? 

What’s worrisome here is that this is a thinly-veiled admission by the Obama administration that their economic strategy, having run its course, leaves the economy heading back into a slump, and they’ve got nothing left.  The stimulus halted the slide temporarily, but stimulated nothing.  Now we’re back in the same boat. 

No, actually, it’s worse.  At least before the financial melt-down, we had a housing bubble and easy credit to make us think things were OK.  Now we don’t even have that.  Nothing’s been done about our broken trade policy.  No manufacturing jobs have come back home and global trade imbalances are returning to their pre-crisis levels.  And deficit spending is about as popular as a turd in a punch bowl.

I’m sure we’ll soon see a shake-up in Obama’s economic team.  Summers and Romer will probably be replaced by a couple of other ivy-league economists serving up the same platitudes about economic growth and free trade.  Not that it will make any difference.

I suppose we should be thankful for one thing:  if Clinton weren’t here, Obama would have to turn to Jimmy Carter for advice.

14 Responses to Clinton to the Rescue? Yikes.

  1. hungry4food says:

    WE the PEOPLE of these lands all over the world where we see this Trade Policy causing such Great Inequalities to arise need to demand that the Immigration Reform in the USA Include the renegotiation of the WTO FREE Trade agreement .

    I think the way Our Free Trade agreement Favors Governments that manipulate their Currency Value to suck away JOBS and Our Governments let it happen is Racist !
    Governments need to Consider people Over trade Policy so Economic disadvantage does not act as a racist divide between social and economic inequalities . To do this Governments must have some understanding in what will allow some self reliance to evolve in the trend of equality evolution through international trade and the current WTO Trade Policy has fallen Short on this fact .

    Mexico and Countries that are now suffering from the manipulation of currency values that today should be valued equally because of such increases in Job and income relocation over the past 16 years of this current trade policy should now be renegotiated to allow some new reforms to balancing equities against deficits to sustain economic and social functions so deflation depression does not result in mass relocation of populations that then ends in further inequality due to lack of infrastructures , Like we see the USA now facing with the Infiltration of Immigration due to Inequality in homelands that then forces people to find or try to find better living standards else ware . This is a Failure of our Governments Lack of understanding to the fullest measure of Trade Policy , and WE the PEOPLE of these lands all over the world where we see this Trade Policy causing such Great Inequalities to arise need to demand that the Immigration Reform in the USA Include the renegotiation of the WTO FREE Trade agreement to allow more work in Mexico or anywhere that People are being forced from their homes for lack of Inequality from a Currency manipulation by a trade partner that is Economically and Environmentally unjustified for that region because of the lack of sustainable Jobs that then lends to the problems we see . Its racist when we see Nations negotiate Trade that only favors Governments interests over peoples welfare and equality , and when Politics starts to alter and force people to relocate to try and find sustainable living means and needs should tell Governments that their actions are not Properly representing peoples Best Interests First .

    The balance between Economics and Social and Environmental welfare are whats most important and the studies below show that Political / Central banking and Corporate Business advantage in relocating labor costs has not ended in favorable balance among world societies and the Free Trade agreement of the past 20 years has evolved into a unbalanced economic tribulation thats causing struggle of societies

    Your articles here are evident of the needed reforms in both Economics and immigration .

    The High cost of the China-WTO Deal: Administration’s own analysis suggests spiraling deficits, job losses
    By Robert E. Scott,
    February 1, 2000 &

    Its also taken Mexico’s Jobs away over the years too . Europe’s Jobs too , just because of a Simple Currency manipulation thats does nothing to promote quality in our products .

    Please demand change to the Trade Policy with Immigration Reform , its vital to the future of the Human equality debate because Economy has to be a part of equality from a fundamental stand point not just a Government influenced by special interests , this is fascist and racist and we must demand this be changed . If you can please forward this expression to a legal person that might have a sense of how to go forward with getting involved in the process of changing the trade policy to include immigration as a part of the concepts
    Thanks for your time .

    • Pete Murphy says:

      Hungry (and all commenters), please be aware that comments that contain more than one link cause the comment to be held for approval. (It’s an anti-spam feature.) That’s why such comments as this one may take some time to appear if I’m not immediately available to see and act on the new comment.

      Hungry, regarding your last paragraph, I think the best approach is for all of us to write our elected officials and express concern about our harmful trade policy and our crazy rate of immigration. Beyond that, letters to the editors of publications and comments on articles on-line can also help convey the extent to which such policies are out of line with the views of the majority.

  2. ClydeB says:

    The response I get from my legislators (and they do respond) is that it is simply a matter of our not competing and that were we only to re-educate our work force, we can regain our competetive advantage.

    • Pete Murphy says:

      Me too, Clyde. But we can’t stop trying. If these guys hear it enough, they may start to come around.

    • FedUp says:

      Compete with chinese factory workers making $300 a month? No thanks. The problem is financial illiteracy.

    • Fedup says:

      Warren Mosler on the trade deficit freely available on his website:

      Deadly Innocent Fraud #5:
      The trade defcit is an unsustainable imbalance
      that takes away jobs and output.
      Imports are real benefts and exports are real
      costs. Trade defcits directly improve our standard of
      living. Jobs are lost because taxes are too high for a
      given level of government spending, not because of
      By now you might suspect that, once again, the mainstream
      has it all backwards, including the trade issue. To get on track
      with the trade issue, always remember this: In economics, it’s
      better to receive than to give. Therefore, as taught in 1st
      economics classes:
      Imports are real benefts. Exports are real costs.
      In other words, going to work to produce real goods and
      services to export for someone else to consume does you no
      economic good at all, unless you get to import and consume
      the real goods and services others produce in return. Put more
      succinctly: The real wealth of a nation is all it produces and
      keeps for itself, plus all it imports, minus what it must export.
      A trade defcit, in fact, increases our real standard of living.
      How can it be any other way? So, the higher the trade defcit
      the better. The mainstream economists, politicians, and media
      all have the trade issue completely backwards. Sad but true

      Same with China – they think that they are winning because
      they keep our stores full of their products and get nothing in
      return, apart from that bank statement from the Fed. And our
      leaders agree and think we are losing. This is madness on a
      grand scale
      Now take a fresh look at the headlines and commentary we
      see and hear daily:
      – The U.S. is “suffering” from a trade defcit.
      – The trade defcit is an unsustainable “imbalance.”
      – The U.S. is losing jobs to China.
      – Like a drunken sailor, the U.S. is borrowing from
      abroad to fund its spending habits, leaving the bill to
      our children, as we deplete our national savings.
      I’ve heard it all, and it’s all total nonsense. We are
      benefting IMMENSELY from the trade defcit. The rest of
      the world has been sending us hundreds of billions of dollars
      worth of real goods and services in excess of what we send to
      them. They get to produce and export, and we get to import
      and consume. Is this an unsustainable imbalance that we need
      to fx? Why would we want to end it? As long as they want to
      send us goods and services without demanding any goods and
      services in return, why should we not be able to take them?

  3. ClydeB says:

    This last post from FedUP may very well be the most, how shall I put it, “unusual” that I’ve ever encountered.
    Pete, I hope you have the time for “real” econonomics 101. There is fertile ground here.

  4. MikeF says:

    Good Morning Pete,

    Unemployment under our current arrangement cannot be arrested and will come to represent the most critical symptom of our failed economic underpinnings which are dependent on the exponential expansion of growth-based-debt-capitalism.

    Delusional economists (cornucopians) such as FED UP focus on single minded abstract facts that are devoid of any separation between our false fiat capital system and that of the real world which consists of matter and energy. The imbalance that currently exists between the two systems coupled with the incurable desire to make money without actually performing any actual work has led us to the point of no return.

    It is certainly my opinion that a “best case” for the United States is 10 to 15 years of high unemployment and diminishing living standards while those is FED UP’s camp bask in the successful overthrow of the American way of life.

    • Pete Murphy says:

      I doubt that “fed up” has any real background in economics. My guess is that he/she is someone who profits from our current trade policy, perhaps a Chinese national.

      I agree with your assessment and also see rising unemployment globally, perhaps reaching critical, destabilizing levels in some places. Japan is one we should watch. They’re in a real pickle, with China muscling in on their export business.

  5. ClydeB says:

    It is really discouraging to have the relatively minor issue of currency valuation to cloud the much larger problems of excessive population and the subsequent subsidization of foreign workforces by our lack of a cogent trade policy and the disasterous expectations of exponential growth.
    Somehow we must get the ‘deciders’ to focus on the real issue and quit furnishing them an out by talking about currency valuation.
    Mike and Pete, what is the answer?

  6. Pete Murphy says:

    Randy, is that you? Bye, Fed Up.

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