Thursday, November 6, 2008

Reset Expectations?

I am going to do something that I have only done once before. I am going to post an article that I found on Yahoo.

President Obama's First Step: Reset Expectations

Posted Nov 05, 2008 12:15pm EST by Henry Blodget in Newsmakers, Recession, Election

From ClusterStock, Nov. 5, 2008:

If President Elect Obama were the incoming CEO of a corporation, he would now be preparing for the first act of his tenure: A massive write-off of the mountains of rotted junk buried on the company's balance sheet and an announcement that recovery will take a long, long time.

This flush would clear the way for several years of better than expected results. It would also take advantage of the new leader's one chance to blame the sorry state of the organization on his sorry predecessor.

President Obama began this process last night, in his victory speech, when he noted that restoring the country's health might take more than a term. In the next few weeks, he should go well beyond this:

The deficit will be more than $1 trillion a year for several years

The country needs a massive new fiscal stimulus

The housing market will continue to decline through at least 2010

Interest rates and taxes will eventually have to rise (after the economy stabilizes)

Weak corporations have to be allowed to fail

Millions of homeowners will lose their house

Unemployment will probably rise to 10%

The government simply cannot "bail the country out" -- not because it lacks the will, but because it lacks the power

In short, Obama needs to acknowedge reality, erring on the side of overstating the problems and challenges, and he needs to prepare the country for several tough years. Because if he doesn't, within six months of his taking office, the country will have forgotten all about the prior administration and will instead be blaming everything on him.
It's me again. I found this interesting in light of all the promises that Obama has made over the course of his long campaign. I truly believe that most people who voted for him are expecting an immediate improvement in the economic situation. But, truth be told, it isn't going to go away over night. As he said himself on Tuesday night, it is going to take a lot of work. Those of us who actually have a clue knew that already. The funny thing about all this, is that the faces on the people who attended the victory celebration in Chicago actually looked stunned when he said that.

Again, just keep praying and hold on for the bumpy ride.