Obama: Is he sinister, ignorant, remiss, deaf, illiterate, or blind?

By John Kusumi

My headline is a closed-end choice between six possibilities. President Obama is certainly one of these six things.

The correct economic advice is out there. This morning, economist Jeffrey Sachs appeared on CNBC, followed by T. Boone Pickens.

A massive investment in infrastructure, and a massive investment in alternative energy, are two ideas that Obama has shrugged off and these items are seemingly left "off the table" in administration priorities to date.

According to CNBC, Jeffrey Sachs is "Obama's man." At least, the introduction said: "He has been called the leading international economic advisor of his generation - sought after by President Obama and Hollywood A Listers alike."

I'm not sure why friends in Hollywood implies extra credit as an economist. But, no matter: Sachs is supposedly "sought after by President Obama." Well, well.

I will have to guess that Sachs and Obama aren't getting along very well, because in his interview, Sachs was actually harshly critical of Obama.

Obama has blown it on the economy, thus far in his administration. A few years ago, former Congressman Dick Gephardt said of George W. Bush, "This President is a miserable failure." Well, more recently, Barack Obama is the new "miserable failure" in the White House.

This leads me to six rhetorical questions:

Is Obama sinister?
Is Obama ignorant?
Is Obama remiss?
Is Obama deaf?
Is Obama illiterate?
Is Obama blind?

In many ways, the best answer among these choices is to conclude that Obama is sinister. Perhaps there could be a seventh choice, "Plain old incompetent." That too would be a fitting answer, but not to the exclusion of the other choices.

Let's face it. Sachs and T. Boone Pickens pointed out the right directions in which this country should move. On this article, I will append a transcript of the Sachs interview.

In short, Obama tried being Keynesian, and that approach failed. If I had to approach the presidential tasks on the economy, I would use the advice of Jeffrey Sachs here, plus more: I would withdraw the United States from the World Trade Organization. Also, I believe that the United States can avoid a sovereign debt default by instituting a new money system.

What that means is that I am yet more draconian than Sachs, who is moderate by comparison. And yet, Sachs speaks of an America headed in the right direction, back towards economic well being.

Presumably, Obama has heard this advice before. So, we are left to ponder such questions as, "Is Obama sinister? Ignorant? Illiterate?"

Personally, I also offer the question, "Is Obama a war criminal, who belongs in the Hague?" That's a rhetorical question. The word from Afghanistan is that our forces shot to death, execution style, a group of school children who were already in handcuffs at the time of their deaths.

I believe certainly that Obama is sinister, and is a war criminal who belongs in the Hague. (Of course, the administration would try to spin these matters to suggest that they might merely have been "remiss.")

At this point, I don't care to quibble about why Obama is in the dog house; it is enough simply to confirm the point that Obama, indeed, is in the dog house.

The transcript below, of Jeffrey Sachs' appearance on CNBC on Aug. 25, 2010, is recommended reading. The Obama administration will find many places in this discussion where they should wince, because truth hurts. Perhaps Sachs is out of favor at the White House because his accuracy is "too close for comfort" in an arrogant, self-congratulatory administration.

No matter how they're getting along personally, the advice of Sachs is well taken here, and is immediately actionable at the White House. Therefore, if these actions are not undertaken, then Barack Obama simply MUST be one of these choices:

- Sinister
- Ignorant
- Remiss
- Deaf
- Illiterate
- Blind

# # #

Wed. Aug. 25 2010 7:43 AM ET

CNBC APPEARANCE OF JEFFREY SACHS


CNBC: He has been called the leading international economic advisor of his generation - sought after by President Obama and Hollywood A Listers alike. And now he's calling for a new approach for recovery here in the United States. Joining us in the studio is economist and director of the Earth Institute at Columbia University, special advisor to the United Nations Secretary-General Ban Ki Moon, Jeffrey Sachs. Professor Sachs, good to have you with us.

Sachs: How are you?


CNBC: What do you think we need to do to get our US economy moving?

Sachs: Well we're in a deep mess, clearly, which is not getting better right now and I think the basic summary of what the administration's tried to do was to get consumption-led recovery.

We had a consumption boom; it collapsed; they said let's get housing starts going, let's get auto sales going, and so on.

And it's not working, obviously. Households are tired, they're exhausted. And this means that we have to look elsewhere for demand, for employment, for future economic growth.


CNBC: Exhausted or just afraid?

Sachs: I think that they're pretty exhausted, actually. Because we went, really, 20 years - it wasn't just a year or two, but we went 20 years - with saving rates falling, eventually to negative levels - everybody banking on housing values that turned out, of course, to be an illusion.

And you still have miserable balance sheets; the Fed (New York) came out with a report a couple of weeks ago showing how many loans are still - consumer loans, and consumer credit - still spilling over into defaults; into foreclosure; how households are deleveraging.

So the idea that we're just going to go back to the kind of consumption led boom that we had, I never found persuasive. I believe that the stimulus approach that was taken a year ago wasn't going to work. It's not a matter of "I told you so," it's kind of sad that we didn't try something that had a better chance.


CNBC: So focusing on the consumer hasn't worked - and in your view won't work - because of the frame of mind of the consumer. So what will? Is it investment in infrastructure, is it investment in green technologies, what is it that gets things moving, gets jobs growing?

Sachs: If you look first of all - kind of mechanically - if you take output: If it's not consumption, there are only two other things that happen with our output other than contraction: One is investment spending and the other is exports. The idea that we should be increasing our net exports is absolutely right. The Obama administration said it, but it hasn't done anything about it. But, that is a valid place to look. And the other is public investment, and investment in people.

We have a skills deficiency and a skills mismatch. We actually have companies saying they're trying to hire skilled workers and can't find them. If you can imagine: a miserable labor market; a jobs crisis; and yet firms that are saying, when they're looking for skilled workers, that there are real shortages.

And we know that the big unemployment problem is unskilled young people, and older people whose skills are no longer demanded in the modern labor market. So, we have a skills problem. That means human capital investment and physical investment. And the problem on the physical investment side is obviously, consumer industry is not going to invest. So we have to look at public investment. And, we've got great reason for public investment.


CNBC: Did we mis-spend the stimulus? I mean, I thought that was a massive stimulus package that was supposed to do a lot of those things.

Sachs: When you look at the stimulus package, part of it was just emergency relief for the states. I don't have any great complaint about that, because it was and remains an emergency.

Part of it was more tax cuts, which I thought was a little bit dangerous and - absurd, frankly, is the word I would use - because we're in a fiscal crisis. So you don't keep cutting taxes, but politicians of both parties continue to pander to the public as if there is no budget constraint.


CNBC: Although, economists will go back and forth on that. Should you be raising--

Sachs: Some will, but I won't!


CNBC: That's a huge question though, should you raise taxes, or you're just saying leave the structure the way it is?

Sachs: First, if you're in a budget hole of more than a trillion dollars, don't cut taxes. Second, if tax cuts are expiring, let them expire. We've got a crisis here, on the fiscal side!


CNBC: And you'd let them go, across the board?

Sachs: I would. Of course, no one else would, but I would. Or - let's be precise and careful: I would phase out all of it, because we need a real adjustment to get the budget back under control.

And, what we have is both parties pandering. The Republicans far worse, because they want to give tax cuts to everybody, which is an absurdity. The Democrats only partially pander.


CNBC: I would agree, but what about the question of increasing public spending at that same time? If your big concern is a massive deficit, shouldn't you be cutting spending at the same time you're looking at tax - either tax increases or...

Sachs: First, I would cut about $200 billion in the military spending, because there is no greater waste of our money than Afghanistan. This is a tragedy, is the right word. But it's useless. And we're spending $100 billion dollars this year in Afghanistan. We're still with a huge bill in Iraq. We have wasteful arms systems that even the Pentagon and the generals don't want, but because of local pressures of the arms manufacturers, we still are buying those. So we have about $200 billion dollars on the military side that ought to come down sharply.

What we ought to be doing, though, is investing so that our highways don't collapse, so that our dams don't collapse, so that we have a 21st century rail infrastructure, so that we are modernizing our I.T. networks and so forth.

And, that we have a new energy system, because we probably noticed by now that our energy system fails on all dimensions - on national security dimension, because of oil import dependence; it fails on environmental dimensions, because we're doing absolutely dangerous things and breaking the climate; and we're completely trapped because we don't have a proper energy plan in this country. And that's where we are losing tens of billions of dollars.


CNBC: We're sending the money overseas! It's draining our resources!

Sachs: That's right. Why don't we have an energy plan?!?


CNBC: We've got Boone Pickens on a little later this morning, we'll be able to talk about that. Will all of these things you're talking about be able to move the needle immediately? You talked about the education issue. That's a long term issue. If you need, actually, skilled workers to do all the things you're talking about, how are we going to make that work?

Sachs: I don't think we can move the needle after 20 years of boom. I think the idea that they were going to make a quick recovery and that the only things we were going to invest in was "shovel ready" investment -- was part of the illusion sold once again to the public. I don't know who bought it, but it isn't true. It's going to take us years to dig out of this.

But, here's the problem: Since everyone in Washington has a time horizon of a minute or a day or the longest time horizon conceivable is to November - then everybody's looking for quick fixes. The quick fixes don't work. But in the meantime, we then go a year and a half and there are no plans! Because nobody makes plans in Washington! And so we go month after month: quick fix; quick fix; quick fix. It fails; it fails; it fails. The tax credits for housing end; housing collapses. Big surprise.

But what's happened during the year and a half of the Obama term? What long term plans have they created? I haven't seen them. That's where we're losing time as a country. I have been looking all over the world -- other countries actually are looking to their future! They're looking 5 years ahead, 10 years ahead, 20 years ahead. We're looking week-by-week! That's our real failure.


CNBC: Germany actually has taken steps to avoid dependence on Russian natural gas, for example. They've spent a lot of money on wind power and things like that. Alas we have to leave it there. Big questions, lots to talk about. Thank you very much, you're heading to New Orleans?

Sachs: We are. We've got a big meeting about a region that's in crisis of all sorts. The same issues: energy and the environment.


CNBC: Environment and infrastructure. ...Can I just jump in, one final queston: Double dip, or no?

Sachs: It's quite possible.


CNBC: I hate to leave it there. But on that note, thank you.