Conrad Black: The State of Obama
[Conrad Black is the author of Franklin Delano Roosevelt: Champion of Freedom and Richard M. Nixon: A Life in Full. He can be reached at cbletters@gmail.com.]
An observer is entitled to wonder if this administration has taken leave of its senses. I have often written here that it might do better at some point, but it has been in office for 26 months and its policy record is a shambles. It has given precisely no indication of what it proposes to do about the trillion-dollar-plus deficits it is serenely racking up and projecting. The latest budget, in lockstep with its precedents, is a farcical mockery of prudent management: It forecasts no improvements, and such forecasts as there are are based on pie-in-the-sky euphoric assumptions that Treasury officials cannot render with a straight face. Habitués of this column would be aware that I consider these deficits to be effectively increases in the money supply, since the money has been spent and infused into the economy, even though most of the bonds that backed the deficits of the last three years were acquired by the Federal Reserve. I don’t believe that this alters the eventual nature of the impact of the spending on the economy.
There is nothing to indicate that the administration has any will to pay the debt down, rather than just devalue the currency in which it is denominated, which it can do now that the Europeans and Japanese are essentially doing the same, after putting up a smokescreen of austerity, given that the three currencies have no value yardstick except in relationship to each other. This is not responsible policy, and it is not consistent with retention of the U.S. dollar as the world’s principal currency. The dollar is likely to remain so only because of the similar European and Japanese conduct, and the fact that no one can believe a word the Chinese say about their currency or economy. The only hard currencies in the world by traditional standards — the Canadian, Australian, and Singapore dollars, the Swiss franc, and the Norwegian Krone — have a combined money supply of only about a quarter of what the U.S.’s M1 was before this administration and Federal Reserve discovered the joys of vertiginous “quantitative easing.” None of the Deficit Commission’s suggestions has resonated much with the administration that set it up and fobbed off queries about its own policies for almost two years by silently referring to its upcoming recommendations, like Richard Nixon campaigning in 1968 and saying on the subject of Vietnam, as he patted his breast pocket, “I have a plan.”...
Read entire article at National Review
An observer is entitled to wonder if this administration has taken leave of its senses. I have often written here that it might do better at some point, but it has been in office for 26 months and its policy record is a shambles. It has given precisely no indication of what it proposes to do about the trillion-dollar-plus deficits it is serenely racking up and projecting. The latest budget, in lockstep with its precedents, is a farcical mockery of prudent management: It forecasts no improvements, and such forecasts as there are are based on pie-in-the-sky euphoric assumptions that Treasury officials cannot render with a straight face. Habitués of this column would be aware that I consider these deficits to be effectively increases in the money supply, since the money has been spent and infused into the economy, even though most of the bonds that backed the deficits of the last three years were acquired by the Federal Reserve. I don’t believe that this alters the eventual nature of the impact of the spending on the economy.
There is nothing to indicate that the administration has any will to pay the debt down, rather than just devalue the currency in which it is denominated, which it can do now that the Europeans and Japanese are essentially doing the same, after putting up a smokescreen of austerity, given that the three currencies have no value yardstick except in relationship to each other. This is not responsible policy, and it is not consistent with retention of the U.S. dollar as the world’s principal currency. The dollar is likely to remain so only because of the similar European and Japanese conduct, and the fact that no one can believe a word the Chinese say about their currency or economy. The only hard currencies in the world by traditional standards — the Canadian, Australian, and Singapore dollars, the Swiss franc, and the Norwegian Krone — have a combined money supply of only about a quarter of what the U.S.’s M1 was before this administration and Federal Reserve discovered the joys of vertiginous “quantitative easing.” None of the Deficit Commission’s suggestions has resonated much with the administration that set it up and fobbed off queries about its own policies for almost two years by silently referring to its upcoming recommendations, like Richard Nixon campaigning in 1968 and saying on the subject of Vietnam, as he patted his breast pocket, “I have a plan.”...