Obama's Climate of Fear
TOWNHALL: Recently I had a long lunch with an old friend. He sits on the board of one of the largest and most successful publicly traded regional banks in America. He got his seat when that regional bank acquired the very successful community bank he built from the ground up. I will not name him or this bank, but I will pass on a few things he said to me.

He said, “Our bank’s leadership team and others I know at the local or regional level feel paralyzed and intimidated by the climate of fear created by the Obama administration. We believe we are targets of a very deliberate conspiracy.

“The new and proposed regulations will remove every competitive advantage of the community bank, and make every bank identical, forced to operate exactly as does Bank of America,” he explained. “Then, absent competitive opportunity, all of the independent banks will be greatly de-valued and handicapped. They’ll be vulnerable and easily rolled up into the handful of remaining giants … the small bank’s wealth made into fresh food for the insatiable hunger of the big banks’ deficits and losses. This is, I and others believe, the next step in Obama’s plan to take total control of the financial system and money supply, a requirement of dictatorship.“

What is most significant about these statements is the person making them. This is not some freak like the fellow Mel Gibson portrayed in the movie “Conspiracy Theory.”. He’s not somebody stockpiling food in a cabin hidden away in the woods, to escape to when anarchy erupts. Not anybody you would expect to hear express such thoughts. And he’s not a lone voice.

Another friend is the CEO of a mid-sized company that had been on an impressive trajectory of growth for the past three years but is now stalled. He and his advisers have reversed their viewpoint in the last few months. They are eager to sell the company if possible now rather than later. Why? They believe Obama is deliberately, systematically destroying the economy as a whole and is specifically targeting small business for extinction – because it’s too difficult to exercise dictatorial control over millions of small enterprises. >>> Dan Kennedy | Friday, July 10, 2009

The Obama Economy
THE WALL STREET JOURNAL: As the Dow keeps dropping, the President is running out of people to blame.

As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama's policies have become part of the economy's problem.

Americans have welcomed the Obama era in the same spirit of hope the President campaigned on. But after five weeks in office, it's become clear that Mr. Obama's policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence -- and thus a longer period of recession or subpar growth.

The Democrats who now run Washington don't want to hear this, because they benefit from blaming all bad economic news on President Bush. And Mr. Obama has inherited an unusual recession deepened by credit problems, both of which will take time to climb out of. But it's also true that the economy has fallen far enough, and long enough, that much of the excess that led to recession is being worked off. Already 15 months old, the current recession will soon match the average length -- and average job loss -- of the last three postwar downturns. What goes down will come up -- unless destructive policies interfere with the sources of potential recovery.

And those sources have been forming for some time. The price of oil and other commodities have fallen by two-thirds since their 2008 summer peak, which has the effect of a major tax cut. The world is awash in liquidity, thanks to monetary ease by the Federal Reserve and other central banks. Monetary policy operates with a lag, but last year's easing will eventually stir economic activity.

Housing prices have fallen 27% from their Case-Shiller peak, or some two-thirds of the way back to their historical trend. While still high, credit spreads are far from their peaks during the panic, and corporate borrowers are again able to tap the credit markets. As equities were signaling with their late 2008 rally and January top, growth should under normal circumstances begin to appear in the second half of this year.

So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year's fourth quarter.

What is new is the unveiling of Mr. Obama's agenda and his approach to governance. Every new President has a finite stock of capital -- financial and political -- to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his "stimulus" spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest. >>> | Tuesday, March 3, 2009

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Speech Lifts Obama But Stocks Fall Yet Again
TIMES ONLINE: The voters loved it. The pundits gushed. Even the pollsters were impressed.

But economic reality soon intruded to burst the bubble around Barack Obama's address to Congress last night in which he promised America that it would emerge "stronger than before" from the economic slump.

Wall Street stocks plunged again at the opening bell this morning, the Dow Jones Industrial Average losing almost 2 per cent in value as investors ignored Mr Obama's soaring rhetoric and lamented a lack of detail in his economic recover plans. Official data showing an unexpected drop in the number of home sales did nothing to reassure them. >>> Philippe Naughton, and Tim Reid in Washington | Wednesday, February 25, 2009

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Obama Predicts More Bank Failures
BBC: US President Barack Obama has warned that more US banks are likely to fail, as the full extent of their losses in the economic crisis becomes clear.

Speaking to NBC News, Mr Obama said "some banks won't make it" but stressed that people's deposits would be safe.

He has asked Treasury Secretary Timothy Geithner to draw up guidelines for banks receiving taxpayers' money.

Meanwhile, he warned of a "difficult next few days" as the Senate begins to debate his $800bn (£567bn) rescue plan. >>> | Monday, February 2, 2009

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