Posted by: Rick | Wednesday, September 16, 2009

Democratic Secret Weapon: The Obama Economy

The economic pessimists have been wrong all year.  I see no reason to believe they’re going to suddenly start being right.  Warren Buffet agrees:

Buffett. . .heaped praise on federal officials who last year engineered the $700 billion bailout of the nation’s banking system. Calling them heroes, Buffett specifically referred to Bernanke, former Treasury Secretary Henry Paulson and current Treasury Secretary Timothy Geithner, who at the time was president of the New York Federal Reserve Bank.

There are those who will quibble over whether certain things couldn’t have been done differently, Buffett said. “But at the time I called it an economic Pearl Harbor and in the end we got through Pearl Harbor. And it could have turned out a lot differently.”. . .

When pressed again about the chance of the U.S. falling into a second recession, Buffett told the CNBC interviewer the economy has stabilized. “We are moving through a recession,” he said. “And I see nothing that makes me worry about the fact that it’s going to be worse than I would have thought three months ago.” [Emphasis added]

For Buffett, this is the equivalent of popping a case of Cristal.  And who could argue with him?  Barack Obama isn’t getting much credit for the stellar job he’s done — not with 10% unemployment on the horizon — but back in February, practically no “experts” of any political stripe thought the recovery would be this far along by now.  The financial markets were supposed to remain a basket case, the auto industry was supposed to be mired in crippling bankruptcy, and the Dow was supposed to be at 5,000.  Wrong, wrong and wrong.  About the only guy who got it right was my boy Larry Kudlow — and he’s a supply-side wingnut!  It’s a strange world we live in.

I’m no economist, but back in March, I predicted (well, sort of predicted — but hey, this is my blog!) that the recession would be over by September — which makes me temporarily smarter than Nouriel Roubini.  So let me go out on a limb and say that by next spring, the economy will look significantly better than it does now.

So much so that Democrats will begin taking credit for it.  So much so that Republicans will have to start worrying about November.  So much so that Obama should try to get the best health care bill he can right now, even if it appears that he’s pressuring certain Democratic Congressmen to take a political hit.

Pay no attention to the perma-bears and doomsayers.  The recovery train has left the station without them — as usual.  Economic optimism will be in full bloom by next summer.  And when it comes to electoral politics, it’s still the economy, stupid.  On that front, Democrats are going to crush the Republicans.

You heard it here first.




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