As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama's policies have become part of the economy's problem.

Americans have welcomed the Obama era in the same spirit of hope the President campaigned on. But after five weeks in office, it's become clear that Mr. Obama's policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence -- and thus a longer period of recession or subpar growth.

The Democrats who now run Washington don't want to hear this, because they benefit from blaming all bad economic news on President Bush. And Mr. Obama has inherited an unusual recession deepened by credit problems, both of which will take time to climb out of. But it's also true that the economy has fallen far enough, and long enough, that much of the excess that led to recession is being worked off. Already 15 months old, the current recession will soon match the average length -- and average job loss -- of the last three postwar downturns. What goes down will come up -- unless destructive policies interfere with the sources of potential recovery.

And those sources have been forming for some time. The price of oil and other commodities have fallen by two-thirds since their 2008 summer peak, which has the effect of a major tax cut. The world is awash in liquidity, thanks to monetary ease by the Federal Reserve and other central banks. Monetary policy operates with a lag, but last year's easing will eventually stir economic activity.

Housing prices have fallen 27% from their Case-Shiller peak, or some two-thirds of the way back to their historical trend. While still high, credit spreads are far from their peaks during the panic, and corporate borrowers are again able to tap the credit markets. As equities were signaling with their late 2008 rally and January top, growth should under normal circumstances begin to appear in the second half of this year.

So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year's fourth quarter.

What is new is the unveiling of Mr. Obama's agenda and his approach to governance. Every new President has a finite stock of capital -- financial and political -- to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his "stimulus" spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.

His Treasury has been making a similar mistake with its financial bailout plans. The banking system needs to work through its losses, and one necessary use of public capital is to assist in burning down those bad assets as fast as possible. Yet most of Team Obama's ministrations so far have gone toward triage and life support, rather than repair and recovery.

AIG yesterday received its fourth "rescue," including $70 billion in Troubled Asset Relief Program cash, without any clear business direction. (See here.) Citigroup's restructuring last week added not a dollar of new capital, and also no clear direction. Perhaps the imminent Treasury "stress tests" will clear the decks, but until they do the banks are all living in fear of becoming the next AIG. All of this squanders public money that could better go toward burning down bank debt.

The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they're no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.

Meanwhile, Congress demands more bank lending even as it assails lenders and threatens to let judges rewrite mortgage contracts. The powers in Congress -- unrebuked by Mr. Obama -- are ridiculing and punishing the very capitalists who are essential to a sustainable recovery. The result has been a capital strike, and the return of the fear from last year that we could face a far deeper downturn. This is no way to nurture a wounded economy back to health.

Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the weekend, we couldn't help but wonder if they appreciate any of this. They seem preoccupied with going to the barricades against Republicans who wield little power, or picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want.

Perhaps they're reading the polls and figure they have two or three years before voters stop blaming Republicans and Mr. Bush for the economy. Even if that's right in the long run, in the meantime their assault on business and investors is delaying a recovery and ensuring that the expansion will be weaker than it should be when it finally does arrive.

http://online.wsj.com/article/SB123604419092515347.html

Nite ya'll. Btw, Colorado, I used to live in Chantilly, VA and I love Leesburg and surrounding area. Thinking about it makes me miss it!

I love it here. I don't miss Houston at all. The closest thing we had to mountains there were overpasses.

On war(s), BJean, I found this today:

How Obama voted on war funding bills in Congress

Major war-funding legislation while Barack Obama was in the Senate, and how he voted:

_May 2005: Congress approved an $82 billion bill to fund the wars in Iraq and Afghanistan and international anti-terrorism efforts. Obama voted yes.

_June 2006: Congress cleared a $94.5 billion bill to fund the wars in Iraq and Afghanistan as well as provide aid to hurricane victims. Obama voted yes.

_September 2006: Congress cleared a $448 billion Pentagon funding bill that included $70 billion for U.S. military operations in Iraq and Afghanistan. Obama voted yes.

_April 2007: Congress cleared a $124 billion spending bill that provided $90 billion for war costs but mandated the withdrawal of U.S. troops within six months. Obama voted yes, but President George W. Bush vetoed the legislation.

_May 2007: Congress approved a roughly $100 billion spending measure to fund the wars in Iraq and Afghanistan and domestic projects, including hurricane relief. Obama voted no.

_December 2007: Congress cleared a $555 billion catchall spending bill that included $70 billion for U.S. military action in Iraq and Afghanistan. Obama did not vote.

_June 2008: Congress approved a measure to spend $162 billion for war costs as well as provide a 13-week extension of unemployment benefits and emergency relief for the flood-ravaged Midwest. Obama voted yes.

How Obama voted on war funding bills in Congress

Beth you asked my opinion on why I believe that Palin is a right wing nut. I gave you a brief (yup) synopsis of why I put her in that category. I'm not up for debating it. She is who she is and she is about as far right as one can get and still be called a Republican. If you agree with her on those things that are so extreme, then that's your right of course. I don't know you but from your postings you don't seem as far right as some people here, but you're pretty rigidly to the right.

I have never said that I wasn't a left wing nut or a liberal. I am moderate on some things but I am sure that if you do not consider Sarah Palin an extremist, then I will fill your category of liberal pretty easily.

You have attributed several things to me that I have not said. I have let them go, except for the California thing. It just isn't worth it to me to correct you. But although I know I can be argumentative and harsh, I doubt seriously if I am the raging maniac you think I am. But whatever. It doesn't bother me if you call me names or hate my guts or hang on and love every word I type.

I find it fun therapy to participate on rants and raves and when it becomes no fun or a chore, I will move on to something else. Fortunately for you, when that happens I'll be outa your life forever.

Well, at the risk of creating a long post, I will try to address these issues as you raise them.

I don't think that's entirely fair. More babies are born to children who have everything there for their using and probably have never heard the word "abstinance" ever. To call her on the carpet for what her 17-year-old daughter did is pretty low, in my opinion.

I think her daughter made a mistake. Her boyfriend admitted on the T Banks show that they used birth control most every time. Sarah is a good mother who taught her daughter what God wanted her to teach her. Abstinance. So what.

Okay, so she's rigid on abortion. As for stem cells, it's been proven numerous times that there are more and better stem cells in umbical cord blood than in an aborted fetus.

To be against abortion is a good thing. I love what you say here about umbilical cords being a better option for research than the fetus.

Okay, but does that make one a winger?

I don't know that she believes people shouldn't pay taxes (did she say that anywhere that can be linked?), but I DO have a problem paying taxes to a government that squanders it so badly. Not only are we paying out TRILLIONS to reward bad behavior, there were also BILLIONS in bullcrap earmarks and perks. I can't even say how long it's been since we have had a fiscally responsible government, but I doubt it's been in MY lifetime. So while the rest of us do without, the government continues to party like it's 1999.

She believes people should pay taxes to support the governments role of protecting this country. What it was originally set up to do. Not to support the people of the country financially. The gov. wastes too much tax money and that's what she doesn't support.

But those are her children, and that choice is her right. The handful of homeschooled children is not the cause of the crappy school system we have, GOVERNMENT is. Waste is. Teachers' unions are. People with agendas (regardless of which side) are. Johnny can't read or write, but he can put a condom on a banana and can tell you what's in our landfill. Plus, it's been statistically proven that homeschooled children run circles around public school kids.

Home schooled kids don't take anything away from public schools except the brightest students, because once they are removed from the publics hands, and they are taught at home, they are the achievers in society. Public schools stink!

But congress voted to give the president the power to go to war, and they were hugely liberal.

Without war, bjean and everyone else in America would be under Europes rule right now, and wouldn't have the freedoms she has in this country. (for now)War is something that needs to be done if you want freedom and place to live.

True, I have. But let me ask you, if she is a winger because she believes in "X," are you not also a winger for being completely on the opposite side as her? Just food for thought...

Bet, I like all you say here.

How Obama voted on war funding bills is a pretty interesting post. For all those who think so highly of him because of all the promises and things he said during his campaign, it just goes to show you that they didn't really know where he stood on the war issue. There's alot of things that the dems who voted for him are finding out now. Like what he meant with his campaign slogan. Change!..... Yup, you're gonna get change alright!

Beth you asked my opinion on why I believe that Palin is a right wing nut. I gave you a brief (yup) synopsis of why I put her in that category. I'm not up for debating it. She is who she is and she is about as far right as one can get and still be called a Republican. If you agree with her on those things that are so extreme, then that's your right of course. I don't know you but from your postings you don't seem as far right as some people here, but you're pretty rigidly to the right.

I have never said that I wasn't a left wing nut or a liberal. I am moderate on some things but I am sure that if you do not consider Sarah Palin an extremist, then I will fill your category of liberal pretty easily.

You have attributed several things to me that I have not said. I have let them go, except for the California thing. It just isn't worth it to me to correct you. But although I know I can be argumentative and harsh, I doubt seriously if I am the raging maniac you think I am. But whatever. It doesn't bother me if you call me names or hate my guts or hang on and love every word I type.

I find it fun therapy to participate on rants and raves and when it becomes no fun or a chore, I will move on to something else. Fortunately for you, when that happens I'll be outa your life forever.

Believe it or not, BJean, I was not trying to be offensive in what I asked. Because I am honestly trying to debate and not get personal with you on these things, I apologize for having said something that apparently hit on a more personal level.

She believes people should pay taxes to support the governments role of protecting this country. What it was originally set up to do. Not to support the people of the country financially. The gov. wastes too much tax money and that's what she doesn't support.

Home schooled kids don't take anything away from public schools except the brightest students, because once they are removed from the publics hands, and they are taught at home, they are the achievers in society. Public schools stink!

These are the things that stood out most to me. I too would be considered against paying taxes since I do not believe it is government's -- or citizens' -- role to redistribute wealth. Since we began doing that, we have "created" more poor people than ever in history. In most casses, people WON'T die if expected to take care of themselves like they used to way back when.

It's like your child holding her breath or refusing to eat. Eventually they will realize that only goes so far -- that breath must be taken, and hunger sucks.

People living on the public dole for years or generations has not made this a better or stronger country. People having their hard-earned money wrested away from them to give to people, many of whom are simply lowlifes and no goods, does not make this a better or stronger country. We not only have greed in our corporations, we have greed in that 32 percent who pay no taxes as well.

As for the homeschooling, God love 'em for doing it! I have almost never heard of a homeschooler falling below the very low line that public school kids consistently fall. For the life of me, I don't know how homeschoolers make things worse -- unless it's like you say, that the best and brightest are kept out of the schools! The percentage of homeschoolers is relatively small.

I am constantly and consistently for vouchers. It's too late for MY child, but I am still for it for others' kids. When ANY company is made to compete, everybody wins. Yet schools are just another example of government waste and ruin.

I agree, Beth.

Obama asked congress on Thursday for $83.4 BILLION for US military and diplomatic operations in Iraq and Afghanistan, pressing for special troop funding that he opposed 2 years ago when he was senator and Bush was president. This request will also send thousands more troops to Afghanistan. He supported a war funding bill just last year that also included about $25 Billion for domestic programs.

Beth, I completely agree that having people on the "dole" has kept them down. And I also agree that there is a generation that has lived on the "dole" with never having become working, contributing members of society. However you must realize how it all came about - at least for the most part.

Many minorities in our country were discriminated against in a very inhumane way. They were barred from some of the very basic things in society that so many of us take for granted. They did not have the opportunities educationally, or in any other way, that the majority of Americans had. How could we expect them to compete in the work force if we kept them beaten down?

They were dirt poor with little means of survival on the level that most Americans enjoyed. And for many years, they often starved to death or died from untreated, treatable medical conditions.

Fortunately Americans got smarter and knew that what we were doing and had done was not humane or even smart for our country. So programs were put into place to help the unfortunate people in this country - to guarantee that they got the help they so desperately needed.

Unfortunately as time wore on, some of what you described certainly happened. Interestingly enough, some of the majority of our citizens liked the resut. It had the effect of keeping the minority "in their place" and under the control of the people who were calling the shots. That was very ugly.

Things are finally beginning to get right in America with regard to this very real, very unfair problem. There have been some better checks and balances of the system and there are not so many people on the "dole". More corrections need to be made, granted. But if you think that we should allow people in this country to go hungry and to die from not having medical care, I think you are wrong.

If we continue to work to make the system one that does a good job of helping people who, in spite of them trying to work, but are unable to because of health or accident occurrences, then we should all be happy that we are not a people who are satisfied with having people dying in our streets or in some shanty somewhere.

Unfortunately as time wore on, some of what you described certainly happened. Interestingly enough, some of the majority of our citizens liked the resut. It had the effect of keeping the minority "in their place" and under the control of the people who were calling the shots. That was very ugly.

I am with you a thousand percent on this one. What I don't like is how these programs seem to tell people that they can't do it themselves without the help of Uncle Sam. I have more faith in people than that.

Things are finally beginning to get right in America with regard to this very real, very unfair problem. There have been some better checks and balances of the system and there are not so many people on the "dole". More corrections need to be made, granted. But if you think that we should allow people in this country to go hungry and to die from not having medical care, I think you are wrong.

It's not like that. I believe that if people HAD to take care of themselves, rather than relying on that monthly check, they WOULD. How did we do it before the advent of welfare? Families and churches took care of their families. I don't believe people were outright dying in the streets from lack of -- at least, not any more than they do now. If we would get a check on our illegal problem, THOSE jobs could be filled by those on welfare now.

If we continue to work to make the system one that does a good job of helping people who, in spite of them trying to work, but are unable to because of health or accident occurrences, then we should all be happy that we are not a people who are satisfied with having people dying in our streets or in some shanty somewhere.

I am all for helping those who, for a short time, may need a hand up. What I can't stand is how we reward baby makers and those with no intention of EVER working with my hard-earned money. If I knew it was only being used for the elderly with no means of support or those who have fallen on hard times through no fault of their own, I could deal better with it.

Beth sez:

"I am all for helping those who, for a short time, may need a hand up. What I can't stand is how we reward baby makers and those with no intention of EVER working with my hard-earned money. If I knew it was only being used for the elderly with no means of support or those who have fallen on hard times through no fault of their own, I could deal better with it."

And Beth, believe it or not I wholeheartedly agree with you on this.

Beth sez:

"I am all for helping those who, for a short time, may need a hand up. What I can't stand is how we reward baby makers and those with no intention of EVER working with my hard-earned money. If I knew it was only being used for the elderly with no means of support or those who have fallen on hard times through no fault of their own, I could deal better with it."

And Beth, believe it or not I wholeheartedly agree with you on this.

I believe you. :cool2:

plain: "I think you'll find I don't dodge."

Um, hmmm. And I said:

"Were you proud of the way he represented our country on the night he used the term "shock and awe" when he dropped bombs on a country that we were not at war with?"

And you responded:

"Except....Bush didn't coin the term "shock and awe". A dude named Harlan Ullman coined that military philosophy way back in 1996. Who was president in '96?" (And that is relevant because.....?)

I feel like your response could be considered at least a misdirection. My comment was about his use of the term "shock and awe" as if what he was doing was an admirable thing - but I didn't say that he made the phrase up - he just used it to make bombing a country something that he thought we should be proud of. And that is why I found it so stinkingly innappropriate; the context, not the words themselves.

In your original post, you made a big deal out of Bush calling it "shock and awe", even suggesting that it would have better been named "death and carnage" or something like that. My reply was that Bush had nothing to do with the name or the strategy (which is that of massively destroying the infrastructure of an enemy before land forced are deployed). And whether or not Bush thought it admirable or not is not important. Congress must have been ok with it too . They're the ones who really approved the bombings.

BJean1195601]And you also said:

"Wait!! Congress authorized Bush to use military force "at any time and in any way he sees fit" on October 11 2002. The bombing didn't start until March 19 2003. So to recap....congress approved, Bush followed through. It wasn't like he invaded within 10 minutes of congressional approval."

Another misdirection. I said we weren't at war with Iraq and you said that he was given the authority to drop those bombs. Congress allowing him to use his own judgment about when, where and upon whom he could send in the bombs wasn't the point. And the timing when he invaded wasn't my issue either. My issue was with bombing a country that we weren't at war with. They had not attacked us and some very good intelligence advised him not to do it. He did it anyway and we had never actually declared war.

BJean, we were at war with Iraq (HJ Res 114, passed Oct.16 2002 was the declaration). Look it up. Congress doesn't have to have a formal declaration to authorize military action (as with Korea, Vietnam, etc). I don't know where you're getting this "We weren't at war with Iraq" stuff. Only Congress can give the approval to invade another country and use military force. They did. You have often wrote and implied that Bush did all this by himself (or with that weird "secret group that was REALLY in power" stuff) when that is easily proven to be not true.

I believe you used words that may be correct, but they are off the point that I was making. It's a clever tactic and one that many people use. Just like your compatriot, Beth, who goes all offensive instead of attemting to defend her stance. You know what they say: The best defense is a good offense. You all have learned that lesson well.

"Foreign countries seem to loves them some Obama."

I am surprised at you plain. I really didn't figure you as that kind of person. I read that and felt depressed and disappointed.

Huh? For using a little sarcasm?

Not that it's a HUGE deal, but in some ways it may reflect a lot of the backlash that we're hearing right now from Obama critics. They're being very contradictory in their criticism of Obama vs what they put up with in Bush. Maybe it has to do with plain ole' discrimination and bias.

If it is, those people who are biased against him because of his skin color just need to get over it and realize that this is a new era - an Enlightened era - a more intelligent and less fearful era. Some of us are marching forward with a hopefully, less rigidly partisan Washington, and toward a brighter future. Brighter from light bulbs coming on inside people's heads instead of brightness from bombs going off.

How did skin color get into this? Are you suggesting that the foreign countries didn't back Obama's economic plan, or pledge any troops to Afghanistan because he's black? I don't understand this paragraph exactly....

i didn't pick up on that; but i think the US hasn't caught on like the rest of the world that race & gender no longer matters - so long as the candidate is qualified.

.....and i get it, many feel obama isn't qualified, but there is merit to say that because of the color of his skin "some" many not give him a chance. that is MY opinion - not fact.

Lu, I watched a lot of footage of his meetings and I never saw anything to suggest that world leaders wrote Obama off because he was black. And the "qualified vs. unqualified" thing is dead / moot (Even though that was the rally of the republicans) since Obama is the president now.

Lu, I watched a lot of footage of his meetings and I never saw anything to suggest that world leaders wrote Obama off because he was black. And the "qualified vs. unqualified" thing is dead / moot (Even though that was the rally of the republicans) since Obama is the president now.

plain - i was actually referring to the fact that the US has a harder time w/obama being black vs the rest of the world. they've caught on - more so than here.

i do agree the qualified / unqualified stance is over.