Wednesday, August 12, 2009

Is Barack Obama The Luckiest Cat

Niall Ferguson has an excellent essay in the FT. The Ascent of Money author sums up the beginning of the administration. Ferguson compares the President to Felix the Cat. He think Barack Obama has worked hard but has been really lucky. After six months of the worlds toughest job Ferguson is surprise that presidents popularity is holding up well considering what he has to deal with.

On the economy he writes:
"Consider the evidence that the economy has passed the nadir of the “great recession”. Second-quarter gross domestic product declined by only 1 per cent, compared with a drop of 6.4 per cent in the first quarter. House prices have stopped falling and in some cities are rising; sales of new single-family homes jumped 11 per cent from May to June. Credit spreads have narrowed significantly and the big banks are recovering, some even making enough money to pay back Tarp bail-out funds. The S&P 500 index is up nearly 48 per cent from its low in early March. Best of all, the economy lost fewer jobs in July than most pundits were expecting. Non-farm payrolls declined by just 247,000, half the number that were disappearing each month in the spring. The unemployment rate has actually declined slightly to 9.4 per cent."
But Ferguson gives credit where it is due:
"Credit where it’s due: although the gold medal for staving off depression goes to Ben Bernanke, the Federal Reserve chairman, and the silver medal to China’s leaders for their even more impressive stimulus, the president deserves at least bronze. According to Moody’s, the ratings agency, the stimulus package has saved more than 500,000 jobs. Without the jump in government spending, GDP would still be in a nosedive."

Overall Ferguson's position is positive but he sees some road blocks that could cause a stumble for Barack Obama. Sphere: Related Content

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