Colin Powell Concerned About Obama's Plans

Colin Powell Concerned About Obama's Plans


He’s not alone in expressing that Obama is doing too much too soon, but his voice definitely carries more weight because he may have done more to swing independents and moderates towards the President than anybody else last year.

From AP:

“The right answer is, ‘Give me a government that works,'” the former secretary of state said in a television interview to be aired Sunday. “Keep it as small as possible,” added Powell, who said he has spoken recently with Obama and stays in touch with him. Powell, a Republican, endorsed Obama last year over the GOP presidential nominee, Arizona Sen. John McCain.

Obama wants to overhaul the health care system and take on climate change while also helping the country emerge from the recession.

“I think one of the cautions that has to be given to the president – and I’ve talked to some of his people about this – is that you can’t have so many things on the table that you can’t absorb it all. And we can’t pay for it all,” Powell said.

“And I never would have believed that we would have budgets that are running into the multi-trillions of dollars, and we are amassing a huge, huge national debt that, if we don’t pay for in our lifetime, our kids and grandkids and great grandchildren will have to pay for it.”

Powell’s words aren’t lost on me, but let’s look at what Obama’s facing:

  • Two wars,
  • the near collapse of our financial system,
  • a deep recession,
  • once-in-generation unemployment,
  • a genuine threat of deflation,
  • unstable energy costs,
  • global warming,
  • unsustainable health care costs,
  • a crumbling infrastructure,
  • a failing education system,
  • North Korea, Iran, Russia, Sudan,
  • and I’m sure I’m missing something else.

So while I understand the concerns of my Independent and Republican friends, the price to fix these problems will only continue to go up while the likelihood that we’ll be able to reach a legislative consensus on how to fix them will go down.


Shifting gears for a moment, and I’m talking to Republicans specifically now…do you want to win in 2012?

Well, here’s your guy. He can take the party in a sustainable direction. I don’t know that he’d run, but if he did he would crush all other GOPers with the swing voters.

And let’s be very clear…McCain didn’t lose Virginia, Indiana and North Carolina because the base didn’t show up. The voting demographics are shifting, and unless the GOP can field a candidate with mass appeal, well, it’s going to be a long bumpy ride in 2012 and 2016.

Just food for thought…

  • kranky kritter



  • gerryf

    Glad you find it so amusing–hope you’re smarter than the Fed and its counterparts in Europe and Japan who disagree with you.

  • ExiledIndependent

    Gerry, I think we should all have a healthy skepticism of American, European, and Japanese government economists. Their credentials as oracles are, ah, lacking.

    As for our own government’s economic policies, you can’t manufacture *that* much money and not reasonably expect inflation, not deflation. The moment that this round of economic pain bottoms out (Christmas time?), prices will likely start going up.

  • the Word

    They do have conservative pundits soundly thrashed across the board however. They haven’t been correct on any topic in decades by comparison

  • kranky kritter

    I wonder how many of those “experts” would lose their jobs if they were wrong.

    So Gerry, care to make it interesting? Perhaps a little wager on the value of the dollar?

  • kranky kritter

    Oh, and BTW, you’d do well to hope I am wrong. Deflation wold not be nearly as bad as high inflation.

  • gerryf

    EI, I am not saying they are correct, I’m saying there are historic examples of deflation that correlate to today (just as there are historic examples of inflation that relate to today).

    To scoff at the idea of deflation as laughable is just nonsensical.

    Government may be “manufacturing” money, but the point people keep ignoring is that money is not in circulation. It is sitting in bank vaults either because lenders are too skittish to lend or to buttress overleveraged bankhouse bottom lines.

    With unemployment rising, incomes falling and people saving what little they can, production is outstripping demand. Businesses can either go out of business or sell products at a lower price hoping to stick it out. While they stick it out, they cut more employees, leading to more unemployment and continued lowered demand. Eventually, those companies holding on by their fingertips fail, leading to more unemployment. Meanwhile, loan holders of these companies end up with assets they don’t want (the companies) and sell them for a dime on the dollar, dumping more supply into an already oversaturated market.

    This ugly deflationary spiral occured in Japan in the early 1990s leading to the Lost Decade.

    Obama and the fed are trying to orchestrate a soft landing but the economy is just too hoarked up.

    Truth is, we are in troubled, unchartered waters and no one knows what to expect.

    Personally, I don’t have a whole lot of faith in the people trying to steer the ship either, but dismissing deflation completely is just as bad as going the opposite way.

    Now, in the past, I have been accused of dismissing the idea of hyperinflation–just to set the record straight, I do not dismiss inflation as a legitimate concern–what I dislike is people trotting out the hyperinflation boogeyman for political purposes.

  • kranky kritter

    Deflation is IMO the greater boogeyman, one used by irresponsible governments as sleight-of-hand to distract people, and also the far less likely outcome.

    Hyperinflation is a worse-case scenario. If and when we get inflation (personally I say when, not if_), hard to say just how bad it will be. I tend to think hyperinflation is unlikely because of how interconnected global finance is and how many various groups of powerful governments will be working at cross purposes. But inflation that is substantially lower than hyperinflation would still be painful, and any attempt at definitional distinction boils down to the argument over “how bad is really bad?”

    Japan badly mismanaged its economy when its bubbles burst, yet the American remedies have deja vu written all over them. When bubbles burst, they can’t be reinflated. Japan tried to do this. It didn’t work. Now, some of the similar moves our government have undertaken have mitigated effects for some folks, but they all come at the expense of delaying the establishment of a new equilibrium.

    So, what are people doing with all that unspent money? Some folks are saving it. Others are taking it out of dollars and investing it in the kinds of things that are traditionally sound investments during an extended bear market: like commodities )oil, gold, timber, etc. That’s being spun as speculation, but commodities have a baseline worth that fiat currencies do not.

    To the extent what we see dropping prices, these may in fact be desirable. But they are unlikely to last. Fundamentally, inflation and deflation relate to the supply of money. These supplies have been grossly inflated. Ultimately, they must lead to inflated prices to reflect the greater supply of dollars that has outstripped American production.

  • gerryf


    Why? Where is this greater supply of money? Do you have it? Send some my way.

    Inflation may indeed occur due to the mad speculation is energy commodities, but in order for true inflation to occur, you have to have a greatly expanding money supply AND it must be in circulation.

    High unemployment and tight credit and low liquidity are huge drags on inflation.

  • thetruth

    Check out ” Hyperinflation nation part 3 ” on youtube and vote for bill H.R. 1207 which is to audit the Federal Reserve, which is the cancer of our society. Also check out part 1 and part 2 and see what Zimbabwe was like when she was under hyperinflation . Spread the word it is important so that we all will be better prepared when hyperinflation comes up ….pretty soon.

  • ExiledIndependent

    Reserve must be audited. It is insanity that we the people don’t have transparency on this issue.

  • Jimmy the Dhimmi

    Deflation? Oh no, the cost of living may actually come down in this country. Heaven forbid.

    Remember, the industrial revolution was a deflationary period.

  • Tully

    Given that notable deflation normally only occurs during actual lengthy depressions, be careful what you wish for. Especially if you’re carrying any long-term debt. What do you do when the value of the underlying assets AND the income you use to pay the debt both decrease? Think the bank will “deflate” your payments? Or that your retirement investments won’t deflate right along with everything else? Heh.

    Pumping money into a low- or no-demand economy is pushing on a rope, trying to reinflate a soap bubble, but that’s what the admin has been doing. It doesn’t boost demand or spur growth when the slump is not due to tight-cash problems in the first place, and this slump is NOT, as evidenced by historically low real interest rates.

    When the economy does begin to pick back up (despite cash boosting rather than because of it) all that money’s still out there, and yes, that means inflation will immediately outpace both GDP growth and demand growth. They don’t call inflation “the hidden tax” for nothing. Just from the cash boosts in M1/M2 over the last six months, we’re gonna take a 10-12% inflationary hit, over and above the mild inflation resulting from normally prudent monetary policy.

    Current spending proposals certainly don’t argue that it won’t get worse, maybe even much worse. Pushing that rope discourages the spending and investment needed to spur growth and demand, as does the threat of higher future taxes. Even Keynes managed to figure that out.

    Ironic that of Justin’s list, a whole bunch of it is the RESULT of current government actions. You don’t tackle energy costs by restricting drilling and taxing energy. Our public education systems get worse the more the federal government gets involved, not better. Runaway spending itself fuels unemployment and recession.

    It has often been said that stupidity is doing the same thing over and over, expecting a different result. Yet the current Congress and admin seem to believe that doubling down on the same poor choices will make them suddenly work.