President Obama in January 2009 and Now

By: Ian Campbell | Fri, Aug 10, 2012
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Why Read: To test the contemporaneous views I expressed four years ago, to observe similarities and differences then and now, and to determine if you agree with my current views.

Commentary then: On January 26, 2009 newly inaugurated President Obama announced plans for the U.S. to achieve energy independence. Among other things, Obama then said (my summary comments):

  1. We (the U.S. government) have inherited a deepening economic crisis and the need for urgent action. In the last few days Microsoft, Intel, United Airlines, Home Depot, Sprint Nextel and Caterpillar have announced they each are cutting thousands of jobs.
  2. No single issue is as fundamental to our (the U.S.'s) future as energy. America's dependence on oil is one of the most serious threats that our nation has faced.
  3. Urgent dangers to our (the U.S.'s) national and economic security are compounded by the long-term threat of climate change which, if left unchecked, could result in violent conflict, terrible storms, shrinking coastlines, and irreversible catastrophe.
  4. America is at a crossroads. It will be the policy of my administration to reverse our dependence on foreign oil while building a new energy economy that will create millions of jobs.
  5. We must take bold action to create a new American energy economy that creates millions of jobs for our people. The American Recovery and Reinvestment Plan before Congress will put 460,000 Americans to work with clean energy investments and double the capacity to generate alternative energy over the next three years.
  6. My administration will work on a bipartisan basis in Washington and with industry partners across the country to forge a comprehensive approach that makes our economy stronger and our nation more secure.
  7. We will fully take into account the unique challenges facing the American auto industry and the taxpayer dollars that now support it.
  8. We will make it clear to the world that America is ready to lead. To protect our climate and our collective security, we must call together a truly global coalition. I've made it clear that we will act, but so too must the world. That's how we will deny leverage to dictators and dollars to terrorists, and that's how we will ensure that nations like China and India are doing their part, just as we are now willing to do ours.
  9. We can create new industries and revive old ones, we can open new factories and power new farms, we can lower costs and revive our economy. We can do that and we must do that (emphasis added).

I have little doubt that Obama is a sincere man who in many respects has lost the 'game of music chairs'. He spoke about creation of 460,000 jobs. The U.S. has lost approximately 4,000,000 manufacturing jobs since December 31, 2000. Manufacturing jobs tend to create products of enduring value, unlike service jobs which typically do not.

Obama spoke about altering the U.S. automotive industry as if the Queen Mary (for those of you who don't know, a luxury liner of a length that would take at least 50 miles to turn 180 degrees) in a period of time that will be meaningful. He did not mention:

The speech he made was one he had to make. Stay tuned for the results of his and his government's efforts. My guess is that he is a man who has come into office with the best of intentions to face an inherited set of circumstances that will prove overwhelming. Too bad he wasn't elected in 2000 - and I say this as a Canadian who if I was American would have a clear predilection to vote Republican.

If I am correct that we are headed into years, not months, of worst economic times before things improve. I hope that the U.S. population and the world will not fault Obama. Make no mistake, the problems he has to deal with are legacy problems. They should be attributed by history to those who created them, including in my view the Clinton and George W. Bush administrations, and not least Alan Greenspan.

Commentary now: Quickly review what newly elected President Obama said in January 2009 he would work to accomplish, and what has been accomplished to date. Broadly:

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
* Canadian Institute of Chartered Business Valuators
** through The Ian R. Campbell Research Initiative

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