Another blogger with an opinion, here we go…
I think the bailout is everything in this speech and why meaningful change won’t happen. (scare tactics: “I know you guys hate that we gave billions of dollars to people who are already rich and who caused the problems, but that had nothing to do with the millions they spend on taking us out to nice dinners; we HAD to do it or there would be a super-depression”).
He has a vague plan to send people to school and to help pay for college. However, government subsidy for bad public schools (through conditions put on federal education aid money) and for college tuition (through government-secured and insured interest-free loans) are major causes for the problem in the first place. Pressure needs to be put on schools to lower costs, but that won’t happen through presidential fiat; it will happen when people aren’t willing to pay exorbitant tuitions anymore. So Obama’s plan will exacerbate the problem by continuing to subsidize the payment of overpriced tuitions.
As fas as innovation of our workforce, it would be happening on its own if everyone who made money trading paper for the last two decades was homeless right now. Spearheading great economic change during a post-bubble collapse is EXACTLY what a market economy does best. So I have slim hope that throwing borrowed money at the areas that we GUESS will be the jobs of the future will create any real jobs.
This was going to be a disastrous recovery without government intervention because of the extent of the bubble that burst. But I don’t think this government, whether during Bush’s or Obama’s administration, has done anything but put the disaster off until later. It’s still lying just beneath the surface, and it needs to happen. Propping up a failed economic model for the sake of politics isn’t the answer. “Seven slim years,” in the words of Jeremy Grantham. Better seven than seventeen or more, which is what might happen if the government exhausts all its resources on preventing a depression.