Money
I’m getting a bit of concerned about the money the Obama administration is handing out and the way its doing it. Its one thing to loan money to businesses that have a strong track record, in a temporary slump due to the unavoidable nature of the global economy. Its another thing to offer a half billion “loan” to start-ups whose entire business is speculative such as Tesla Motors. Tesla in particular has had serious financial and management problems; has never turned a profit or mass-produced a product. In the Bush administration, anything was justified in the name of fighting “terror”. I hate to say this, but under Obama it seems that every aspect of the favored political agenda is being funded in the name of fighting the recession- whether or not the action will in fact do anything to improve the economic condition. In fact, many of these speculative “loans” may compound the economic problem- causing inflation without producing appreciable economic progress.
Obama once attacked his critics who claimed his stimulus plan was just a spending plan; he sarcastically responded “What do they think stimulus is?”. Obama has a point that short-term stimulus is accomplished through spending; but that argument has its limits. You could pay people to dig holes and fill them back up- that would pump money into the economy but within time would cause inflation without producing long term economic benefits. Stimulus, it seems, is more than simply handing out cash- it is funding economic activity through judicious investments that spur economic productivity over the long run. I don’t get thes ense that issuing large loans to start-ups (loans that no sane bank would make otherwise- for very good reasons) meets that criteria.
I have been impressed with Obama’s modern approach to foreign policy, most recently moderating America’s position towards missle defense in Eastern Europe. But I am increasingly puzzled about the domestic policy, especially regarding the economy. From a distance, it seems that decisions are being made primarily for political reasons as opposed to economic ones. My two cents.
