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Tuesday, July 7, 2009

The Administration is Turning into Financial Keystone Cops

This weekend Joe Biden had an infamous interview with George Stephnopolis. In the interview, Biden said what is now the subject of hyper analysis and mockery.

The truth is, there was a misreading of just how bad an economy we inherited. Now, that doesn't -- I'm not -- it's now our responsibility. So the second question becomes, did the economic package we put in place, including the Recovery Act, is it the right package given the circumstances we're in? And we believe it is the right package given the circumstances we're in,

Now, the President has responded and he said this.

There’s nothing that we would have done differently. We needed a stimulus and we needed a substantial stimulus.

Of course, we should all ask White House Economic Advisor Laura D'Andrea Tyson if the stimulus was right and proper. Tyson said the stimulus package was smaller than she would have wanted.

We should be planning on a contingency basis for a second round of stimulus," Laura D'Andrea Tyson, a member of the panel advising President Barack Obama on tackling the economic crisis. said on Tuesday.

Addressing a seminar in Singapore, Tyson said she felt the first round of stimulus aimed to prop up the economy had been slightly smaller than she would have liked and that a possible second round should be directed at infrastructure investment.

"The stimulus is performing close to expectations but not in timing," Tyson said, referring to the slow pace at which the first round of stimulus had been spent on the economy.

All of this is a little confusion. It's even more confusing when you consider that the president claimed an economic disaster of biblical proportions if the stimulus didn't pass. How bad is our economy if the president expected an economic apocalypse and was still too rosey? Furthermore, if things aren't improving as the administration would like, why is everyone talking about a second stimulus rather than figuring out ways to spend the first one more quickly?

What's the point of having a second stimulus if the administration still can't figure out how to spend the first one? If the president wouldn't do anything different does this mean he's happy with the economy so far? If he isn't what role does he play in its performance? More importantly, what should we expect going forward? The VP says they misread the economy. The president says he would do nothing different. An economic advisor says we should plan for a second stimulus. So, what exactly is the administration's plan going forward? That, frankly, all depends on who you ask. That should frighten everyone.

It's bad enough that we have an administration's economic policy that is disintegrating in front of us. It's even worse that they can't seem to keep their stories straight. One is happy. One is acknowledging mistakes. Yet, another is proclaiming it's time for more stimulus, while only one tenth has yet been spent.

This administration is turning into the keystone cops of finance. The president could sell the country on economic doom. He could scare everyone into going along with his stimulus. What he can't seem to figure out is how to make the stimulus do anything positive for the economy. Worse than that, the entire administration can't seem to keep its stories straight now that it is all falling apart.

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