Hopium Dream Analysis

Just say No! to hopium


Michael Medved smokes some hopium and dreams that BHO turned into FDR:

At the end of December 2011, the unemployment rate seemed stuck near 9 percent and the Obama administration faced increasingly gloomy political prospects. By more than 2 to 1, Americans disapproved of the president’s handling of the economy and polls indicated a tough race against any one of the flawed Republican candidates vying for the nomination. But no one expected the chief executive’s dramatic break with the past in the State of the Union address.

“I know it’s become customary for speeches on these occasions to cover all the big issues facing the country,” the president began. “They’re often described as laundry lists and, yes, we’ve got plenty of dirty laundry that we still have to clean up. But instead of a list of all the good things we know we should do, I want to focus on the one big thing we know we must do. And that is putting America back to work, finding jobs for all those unemployed Americans who want to take care of themselves and contribute to their country but continue to lose ground and lose hope.

“It’s a national tragedy when 14 million people want to work, and the rest of us see important work that needs to be done, but the big corporations that run our economy won’t match the willing people to the necessary tasks. Big companies have benefited greatly from our economic recovery, and they’re right now sitting on mountains of cash. But they apparently prefer to hoard these resources or, even worse, to use them to build new plants in Asia or Latin America, taking millions of American jobs even further away from the people who need them.

“We’ve waited three long years for bankers and CEOs to step up and do their part but when it comes to offering new jobs to their fellow Americans, these pampered plutocrats say ‘we can’t’ or ‘we won’t.’ America deserves a better answer than this smug selfishness. The long wait for a corporate turnaround is now officially over. On the crucial challenge of providing a meaningful job to every single American who wants one, we say tonight, ‘we can’ and ‘we will.’”


Back in 2007 I used to fantasize that the 2008 Democratic Presidential nominee would run on a platform similar to the one above – a “New New Deal.” The time was right for a sea-change election like 1932 because of widespread unhappiness with George Bush and the policies of movement conservatism.

That was what candidate Obama was supposed to be – that was the carefully crafted image his campaign presented. Oh, he never made any grand promises like that, but he convinced his followers that he represented a major change as opposed to “McSame.” We tried to convince them otherwise but they were too high on hopium to listen.

As it turned out we were right – Obama was not FDR II, he was Bush III.

But what I found interesting about Medved’s dream is that he doesn’t discuss the positive effects this imaginary New New Deal would have on our nation’s economy, he instead looks at the political aspects and how such a proposal could be used to help Obama win reelection:

“Yes, we tried to do something about the awful unemployment numbers,” Democrats could say, “but the Republicans refused to ask their rich friends to pay more so we could hire millions.” If nothing else, the president’s ballyhooed bit of political theater could help shift responsibility for the pain of unemployment: instead of blaming him, angry voters might well turn on the heartless Republicans who blocked the instantaneous hiring of most of the unemployed.

Of course if Obama really did make such a sweeping proposal his disaffected followers would ecstatically come running back to their veal pens only to discover too late that it was just another booty call promise.



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35 Responses to Hopium Dream Analysis

  1. myiq2xu says:

    Kevin Drum:

    But the reason I voted for Obama in 2008 is because I trust his judgment. And not in any merely abstract way, either: I mean that if he and I were in a room and disagreed about some issue on which I had any doubt at all, I’d literally trust his judgment over my own. I think he’s smarter than me, better informed, better able to understand the consequences of his actions, and more farsighted. I voted for him because I trust his judgment, and I still do.

    Appropriately, he wrote that on April Fools Day. Unfortunately he wasn’t joking.

    • crawdad says:

      If Obama told me the sun set in the west I’d get a second opinion.

    • Mary says:

      Now I remember why I quit reading Kevin Drum.

      Jaysus.

    • ralphb says:

      Kevin Drum, 07-08-2011

      We are ruled by charlatans and cowards. Our economy is in the tank, we know what to do about it, and we’re just not going to do it. The charlatans prefer instead to stand by and let people suffer because that’s politically useful, while the cowards let them get away with it because it’s politically risky to fight back. Ugh indeed

      Bwahahahaha The dumbass may wise up … no he won’t.

    • WMCB says:

      Wow. And the progs are worried about Michelle Bachmann checking her brain at the door and being mindlessly submissive?

      Drum just announced to the world that he is a brainless lemming. An emotional and intellectual child who longs for daddy to tell him what to do, not a functioning member of a self-governing republic.

      • DandyTiger says:

        That’s the real problem with a percentage of each party. They’re following a daddy figure mindlessly.

        Maybe there’s an authority gene that causes some percentage to follow so easily and some of us to be more cynical and see the truth.

    • yttik says:

      That’s a real misconception, a huge fallacy, to believe that politicians are smarter than you. Somehow it becomes ingrained in us, this idea that they got the job because they are so smart.

    • 1539days says:

      So he can’t trust his own judgement. I guess we shouldn’t trust his judgement of Obama being smart either.

  2. WMCB says:

    “We’ve waited three long years for bankers and CEOs to step up and do their part but when it comes to offering new jobs to their fellow Americans, these pampered plutocrats say ‘we can’t’ or ‘we won’t.’ America deserves a better answer than this smug selfishness.

    I’m really sick of this line that businesses are just sitting on their cash and hoarding it….. just because. Because they are all evil heartless bastards who won’t do their civic duty in providing jobs.

    What a fucking crock. Businesses are terrified of what this lunatic may do next, and just how badly he is going to further trash the economy, and how badly the dollar is going to continue to devalue. They “hoard” because they are hunkering down and staying in cash so that if the shit really hits the fan they have some slim chance of surviving it. That is perfectly predictable and reasonable behavior for a company.

    But you know what? Even if it were true that they are all selfish greedy bastards what difference would it make? Short of nationalizing every business in the country and replaying the Soviet fiasco, you cannot MAKE companies do squat, including providing jobs. The only thing you can do is enact policies that help make it worth their while, i.e. profitable in the long term, to hire and expand here in the US..

    Raise taxes on them in the midst of all this uncertainty? Punish them for not providing jobs? Got news for ya Skippy – it might make some of you feel better for about 5 minutes, but it ain’t gonna make any jobs appear.

    Reality is reality. I don’t care about feeling vindicated, or cheering that we did what was “fair”. I want some fucking JOBS.

    • Three Wickets says:

      High unemployment and low wages favor corporate earnings and tame inflation for investors. That the private sector has been bailed out by $6 trillion from the Fed and Treasury is a fact. That they are mostly sitting on $2.5 trillion in cash and not investing in our people is a fact. We are currently experiencing what may be the greatest wealth disparity in the nation’s history. It’s not good enough to say the fault is entirely with government. Our private sector leaders, including the ones sitting on the Jobs and Competitiveness Council, could care less about the 25 million unemployed or underemployed. As Plouffe has basically said the admin doesn’t need those people to win the next election, many of those votes can be taken for granted, and all Obama cares about right now is getting reelected with help from his friends in banking and the corporate sector. There is no economic policy, leadership, or plan. If we leave it up to the elite class, the rich will keep earning, working people will keep getting poorer, middle class will keep disappearing. Nothing there to cheer about.

      • WMCB says:

        That the private sector has been bailed out by $6 trillion from the Fed and Treasury is a fact.

        Not a fact. Select banks with political connections got bailed out, and also GM. Not “the private sector” as a whole. And I opposed those bailouts. The banks are a different animal than businesses as a whole. And offshoring is a whole ‘nother kettle of fish, but still doesn’t explain the lack of hiring for MOST companies, including small to medium sized businesses.

        My point is that people who think that companies “sitting on all that money” when they have “made record profits” is merely an expression of callousness, do not have a good understanding of how business works.

        The record profits, if you look at the numbers, have mostly come from downsizing and “pulling in”, not from increased sales or increased production. That is entirely normal in an economic shitstorm. Companies make themselves smaller, pull out of anything long term or even remotely speculative or investing in the future, liquidate what they can, amass as much cash as they can, and hunker down to wait it out.

        It’s what they do. It’s what they have always done. It is completely normal business behavior for anyone who knows a goddamn thing about how business functions. It’s not “selfish hoarding”, a stubborn refusal to provide the jobs they are “supposed” to provide, or any of the other crap that is being bandied around.

        Reality is reality. Viewing everything the private sector does solely through the lens of class warfare is an exercise in both futility and stupidity. Because as I said above, you cannot MAKE the laws of profit and loss, and the drivers that dictate what businesses do, go away because they are icky and unfair and have consequences that we don’t like. You have to find economic policies that make it to their advantage to grow, and invest, and hire. Merely saying “You are sitting on a pile of cash, so we’re gonna take it” is a little bit of short term revenue, but a long-term mistake.

        I agree with you that we need an economic policy, leadership, and plan. Hell, even a fucking budget would be nice – since the Dems and Obama have refused to produce one for 2.5 years. And in planning that economic policy, it would be nice if he had some people around who actually understand how business works, what drives their decisions, and what induces them to hire.

        • 1539days says:

          Hoarding tax! We need a hoarding tax.

        • ralphb says:

          closely followed by a hiding tax, I’m sure, if you can find the money 😉

          Kind of amazing how many people confuse “finance” with “business” as if it were all that counted.

        • Three Wickets says:

          The Treasury has essentially become just one receptacle for Federal Reserve monetary policy. Through its purchases, target interest rates, short term repos to banks, the Fed sends money to banks who in turn buy both short and long treasuries. The Fed’s tangible balance sheet has grown to around 2.0 trillion plus in long term paper. That does not include the daily repos at the NY Fed, nor does it include additional trillions in backstops and guarantees provided through its dozen other loan facilities. The Fed basically also financed 700b Tarp and the first 800b stimulus and the second 850b stimulus last December. There is a reason why the national debt is roughly 6 trillion plus higher than it was in 2008, and that additional debt will have to be paid off by taxpayers and workers in various forms for a generation to come at least. The money all comes from the same place ultimately. Just a question of who is willing to put it to work, and gambling with the excess cash in the captial markets casinos is not necessarily putting it to work for the general economy. It’s mostly idle gambling by people who have money to spare.

          Wish I could believe that the invisible hand of Austrian free markets would fix the mess. But then I’d also have to believe that without the ridiculously huge private sector bailouts from the Fed/Treasury over the past three and half years, we would be better off today. Maybe. I know bankers and the S&P wouldn’t be celebrating the way they are today, so that’s an indicator. And to those unemployed or broke today anyway, what frickin difference would it make.

        • Three Wickets says:

          Ralph, management and investors in finance and big business are all mixed in together, and for better or worse they drive the big turbines in the economy that make everything else run.

        • ralphb says:

          TW. They are not the same. I can assure you that IBM, for example, is not hoarding cash because of anything Goldman-Sachs does. They had about $7 billion cash before the economic mess and have more now but it’s not related to their damned banker.

        • WMCB says:

          I agree that the financial sector has caused the most problems, and needs reform. But they are not evil – merely amoral. They went where the profit was. And it’s the govt, the repeal of Glass Steagall, and the captured regulatory environment that set up the playing field that made it more profitable to play in the casino and blow asset bubbles than to produce or invest in anything of value.

          Businesses will do what is most profitable. Always. Always, always, always. A smart president realizes that, and instead of running around railing against the fact that businesses do what is profitable (the HORROR!), he figures out ways to make it profitable for them to do the “right” thing. I’m not talking about total laissez faire, I’m talking about working with reality, instead of futilely moralizing about reality. That’s what a good president does.

          We had one of those once. His name was Bill Clinton.

        • ralphb says:

          Yep. all corporations are amoral creatures of money. To expect them to act “morally” is kind of silly and childish. That’s why we need regulations.

        • Three Wickets says:

          Profits drive our economic system. I have no argument with that. But when you look only to short term quarterly profits, you are going to squeeze out labor and capital investments to show positive earnings. What we have imho is a failure in our leadership, both in the private and public sectors, to demonstrate vision in long term investment and growth. We rely too much on domestic consumption, 70% of our GDP, the highest in the world among developed economies. Our competitors overseas are planning with longer term vision, and right now they’re whipping our butts, and we’re letting them.

        • 1539days says:

          It’s crazy to believe that businesses are evil and immoral and at the same time think that they will gladly pay increased taxes because they are good people. It’s not a matter of force, some people will spend more to avoid taxes than the taxes themselves just to show the government who’s boss. It’s not a matter of morality either. If you get more revenue by taxing the rich 40% instead of 50%, counterintuitive as it may be, isn’t that the better solution?

        • WMCB says:

          Yep, ralph. And honestly, the Dems in the last 10 years are stupid as fuck. Every time business reacts to new govt. conditions in ways that are entirely logical given the profit motive, the Dems run around like chickens braying how shocked, SHOCKED they are that business responded the way it did!!

          Morons. Anyone with half a brain could have predicted how they would react. It’s like building a small obstacle on a downhill slope, and being APPALLED that the water just diverted and ran around it!!! Who could have predicted? I mean, WTF????

          Water runs downhill. Money runs toward profit. If you accept that reality you can to some degree channel it.

        • ralphb says:

          TW, you will not change the short term planning and profit picture of management until you change the people in the boardrooms. Or you give them a profit motive to change it.

          I never said corporations were evil or immoral. They are amoral.

        • Three Wickets says:

          70% of our GDP is domestic consumption. The rest of the economy is made up of private sector investment (need much more of that), government spending (makes up for what the private sector can’t or won’t invest in), and net trade (we continue to run a significant trade deficit, need to become competitive producers again). By comparison, domestic consumption is around 35% of China’s economy, they invest and produce more…though consumption and inflation has been rising in the past year.

    • ralphb says:

      Policies which would make it more profitable to hire and do your business in the US would be very nice.

  3. The only thing Kevin Drum was good for was Friday Cat Blogging. When all the blogger boyz said they were voting for Dick, I stopped reading them, too. They lost all credibility to discuss anything of importance. Asshats!

  4. yttik says:

    “But what I found interesting about Medved’s dream is that he doesn’t discuss the positive effects this imaginary New New Deal would have on our nation’s economy, he instead looks at the political aspects and how such a proposal could be used to help Obama win reelection”

    That’s really a big part of my disillusionment with politics, with Dems specifically, (because that’s where I’ve been for the last 30 years.) They hardly even consider the impact of their policies on real people’s lives anymore. Everything they do and say is done in the name of “helping the little guy,” but what it really is, is simply some technique we can use to make Republicans look bad and Dems look good.

    I got frustrated working on poverty issues, because they would want to do something like increase people’s food stamps by 8 bucks a month. We’d try to point out that that would actually increase people’s subsidized housing rent, decrease their medical benefit, in the end leave them with 70 dollars less of benefits. Rather then helping the little guy, you’d be hurting them. Didn’t matter, the mantra and march was always, Republicans are mean and greedy people because we care so much we increased food stamps! We’ve saved the poor! You can see this same attitude with Obamacare, we’ve provided universal healthcare for everyone and beaten the mean Republicans! Yeah, but on the ground all you’ve really done is left the uninsured struggling to figure out how to pay the lack of insurance fines you’ve just approved. After a while of being somebody on the ground you’re begging Dems to just stop “helping.”

    • WMCB says:

      ytikk, I’ve been saying for some time that many social programs have become only secondarily about helping the poor. The primary focus has become perpetuating Democratic power. Any discussion of whether they are working, whether changes need to be made, whether some programs need to be scrapped and replaced with another method….. it’s all judged and weighed through the prism of Democratic power bases and votes, not helping the poor themselves in real ways.

      • Mary says:

        So true. Witness Fannie and Freddie: any examination for improvement, for better management meant to help the poor, was met with accusations of raycism, to maintain Democratic power through them.

        And here we all are.

  5. Three Wickets says:

    Somehow, the Unemployed Became Invisible And this comment on my facebook.

    We are in this situation ourselves, me and my husband. The emotional, financial and psychological toll is immense. Without help from my family we wouldn’t have made it this far. If you don’t mind, I will agree with Reagan when he said : “The best social program is a JOB.”

    • 1539days says:

      The White House basically said that the only people who care about unemployment are the unemployed. Well, there are now as many people unemployed under Dick as the margin of victory of Dick over McCain. Those people care and so do their friends and familes.

      • ralphb says:

        The 14 million is the official number I believe. When taking into account the real unemployment rate, it’s closer to 25 million. That’s a hefty number of votes there, if we could get them to the polls.

  6. ralphb says:

    Yes to endless campaigning

    Of late there’s been no end of criticism of the president for leaving his desk and his oval office to campaign. In so doing, it is said, he leaves a lot of the “important and pressing” business of the nation unaccomplished. Such criticism is, to my mind, not only unwarranted but counterproductive at best and disastrous at worst.

    Wise Americans of all persuasions want to keep this president as far away from the “important and pressing” business of the nation as possible, for as long as possible. Every second, every minute, every hour, and every day Obama is kept out of his office is a net positive for the nation as a whole. Every moment he’s out there on a smile and shoeshine selling his next four years of nostrums to whatever liberal and progressive suckers he can cornhole is one less moment he can spend actively cornholing the nation at large.

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