March 22, 2009

Obama, the Economy, and Overreaction…the Saga Continues

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While Liz continues on her analysis of international woes from a European perspective, I’ve decided the time is ripe to pipe up with some American vision about recent events.

Let’s begin with an anecdote. Last Thursday, as many began to celebrate the start of spring break a bit early, I was holed up in my room writing papers (yes, plural) . As I typed, my roommate barged into my room to decry Obama’s economic policy solutions. Claiming that they were destroying the banking system, he explained that there was a clause in the recovery plan (hire-American) that mandated all companies receiving government support hire only American employees. This has been at the cost of the jobs of many foreigners in the United States.

Roomie, a proud Canadian, was despondent because hire-American extended to the internship programs of the banks he’d applied to, namely Citibank. As the government funds Citibank, they had to rescind any offers they’d made to interns that were international students. According to Roomie this is a terrible decision as it harms the trend towards globalization.

Now, Roomie is far more knowledgeable in economics than I can possibly hope to be. But, as he flailed about, muttering about how stupid Treasury Secretary Timothy Geithner is, I began to wonder about how people might be overreacting to every action Obama is taking with the economy.

Roomie is not alone in his worry. While his is generated by fading hopes of a hedonistic lifestyle of fast money, sleepless nights and dramatic misadventure (basically the movie Boiler Room extended over twenty years), there are pundits out there that genuinely mistrust Obama’s grasp of the situation. And then there are malicious fools like Rush Limbaugh, who have somehow rationalized the idea that it’s good if Obama fails. But let’s ignore stupidity like that.

Whatever your political affiliation, and whatever your view of economics (be you a Friedman or Keynes acolyte) it seems a bit rash to be reacting so quickly to every action Obama takes. The man hasn’t been in office for 100 days yet, and he’s got the stock market hanging, literally, on every word he says. Every time he says something about government control in the American economy, the Dow drops a thousand points (I’m exaggerating…sort of). Mind you, he’s not saying anything truly gloomy; if anything, he’s being quite audacious in his ambitions–proposing to halve the deficit while bailing out whatever bank comes his way. Concurrently, every time Geithner (who really isn’t the most smooth of people) puts his foot in his mouth, people like Roomie clutch their hearts and grow faint.

In the modern world, which is characterized by the speed of the Internet, its natural to expect things to just kind of improve with little delay. If it takes more than 15 seconds for a web-page to load, I think my Internet has crashed and I fall into a panic. I’ve forgotten that it was only a few years ago that dial-up was the norm and that loading speed was measured in minutes, not seconds.

We’re the same way about the economy; we keep expecting a quick fix. But, it’s just not going to happen that quickly. We need time to internalize the changes, we need time to let them take root and generate any genuine effects.

It’s right that we second-guess Obama’s actions, and that we consider any and all potential outcomes. But it is both wrong and stupid to assume he’s messing things up so quickly.

Give him a chance, and stop freaking out about everything. Paranoia leads to a mob mentality, and weakens the resolve of every attempt made at fixing things. Chill out Roomies of the world.

Otherwise, Rush will get what he wants: Obama will fail, and we’ll be more screwed.