Obama Gearing Up “Big Bang” Reform Plan?
The Obama team is analyzing analogies of FDR and attempting to avoid warnings of Carter-style open 100 days. This is certainly on the minds of an Obama economic advisory board that is in full motion on Obama’s opening economic moves.
“We can’t afford to wait on moving forward on the key priorities that I identified during the campaign, including clean energy, healthcare, education and tax relief for middle-class families,” said Mr Obama. “We also need a rescue plan for the middle class that invests in immediate efforts to create jobs and provides relief to families watching their paychecks shrink and their life savings disappear.”
Early comments by Obama advisors also indicate that veteran Clinton administration advisors, like Summers and Rubin are looking to avoid the slow start that side-tracked many Clinton first-term priorities:
Sunday’s comments also reinforce the impression that Mr Obama’s transition economic advisory board – which includes leading lights of the Clinton era, such as Lawrence Summers and Robert Rubin – is tilting heavily towards a “big bang” approach that would combine a short-term stimulus with large public investments to raise the longer-term US growth rate.
Obama, Congressional Democrats Focusing on Aid for Auto Industry
President-elect Obama and Congressional leadership Reid and Pelosi have their eyes on TARP to bailout the bleeding Big Three auto makers. Already pressing against the White House resistance to open up the TARP coiffers to an ever expanding mandate. Obama’s staff is taking to advocating policy moves from the Sunday talk-shows:
Mr. Obama has asked his economic team to look at ways to involve the industry in shaping an energy policy that weans the country off foreign oil, seeking ways to use the $25 billion in loans that Congress passed in September to help make auto plants more capable of producing fuel-efficient cars. But industry officials asked last week for an additional $50 billion for other costs. When pressed on whether Mr. Obama would endorse using some of the $700 billion rescue package for that purpose, Mr. Emanuel would not say whether Mr. Obama specifically opposed or supported the idea.
First-time Home Buyers Changing Their Look
First-time home buyers are increasingly full of home options with bulging housing inventories and getting more for their money as desperate sellers are unloading homes for a song:
People buying a home for the first time are usually young. They are probably at the beginning of their careers, which means that they do not have much money. In a recession, they would seem to be poor credit risks. For these people, getting a home mortgage should be nearly impossible.
But, a recession does strange things and turns some assumptions on their heads. It turns out the the lower end of the real estate market is getting so cheap that buyers can pick and choose an incredibly large inventory which, in many cases, sellers have to dump at any price.
China Rolls out Own $586 Billion Economic Stimulus
China continues to get pressure from the global economy to keep itself fueled as a counter-balance to the growing number of recessionary national economies.
The announcement reflects mounting anxiety in Beijing that China’s economy is cooling much more quickly than was initially expected in the face of weaker international demand and a slowdown in the local property market.
Two recent surveys of manufacturers showed a slump in activity in October, confirming anecdotal evidence that the slowdown has accelerated in recent weeks. Some economists believe that growth, which was nearly 12 per cent last year, could fall to as low as 6 per cent next year without a substantial fiscal stimulus.
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I am Bill Rice the Managing Editor of MortgageLoan.com. These are my morning notes. If you have comments, feedback, or pointers to something interesting email me or follow me on Twitter.
(photo credit: richardefreeman)
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