StickWithANose

As his decline in poll numbers becomes increasingly evident, Team Obama appears to be doing some soul searching over its overall economic message, and I do mean message. As this Bloomberg article inadvertently indicates, Team Obama doesn’t see its falling numbers on the economy as a failure of policy but as a failure in messaging and political marketing.

The other problem, an inability to effectively communicate an economic policy, was typified in a Dec. 4 interview with Geithner, who was asked what is the “clear, coherent economic message” of the administration.

He proceeded to talk about “high-class education” for children, affordable health care, better incentives for energy and infrastructure, public-private arrangements and the like.

There are 15.4 million unemployed Americans and another 11.5 million “underemployed,” either having given up looking and thus not counted in the jobless numbers or involuntarily relegated to part-time work. A laundry list of the Democrats’ agenda is unlikely to prove comforting.

Geithner, who wins praise from Obama and others for his substantive performance after a shaky start and some more recent cheap political shots, acknowledges that public communications isn’t his forte. It isn’t Summers’ either. And those who are more effective, including Roemer and fellow Council of Economic Advisers member Austan Goolsbee, sometimes are cut out of the action.

It’s not that Team Obama followed in GW’s foot-steps in carrying out the largest transfer of wealth in human history without addressing the central problematic of the American economy [Over-leveraging]… Of course not… Nothing to see here… We’re in Recovery!

“As the clock starts on the New Year, the likes of exotic mortgage recasts, small-biz failures and state and local tax hikes will take the field. And the realization will dawn that none of our fundamental problems — most notably excess leverage — have been solved…And just as one could argue that markets were overly aggressive in discounting the end of existence as we knew it back in March, so, too, they may be guilty of anticipating our imminent arrival at Nirvana today.”

The agent of the great awakening will be gathering pressures on the credit market, as banks are “forced to re-provision, and resurgent delinquencies find Fannie and Freddie (and everyone else) putting ill-made mortgages back to lenders.”

Credit will grow dear and do so precisely as the demand for it from borrowers looking to roll over maturing obligations swells.

The numbers, Stephanie exclaims, are unbelievably big. Uncle Sam must roll over $2.5 trillion in debt during the next two years, banks worldwide have some $7 trillion due in the same stretch and commercial real estate will weigh in with another $750 billion.

In my humble opinion, it’s time to extract ourselves from the dollar trap entangling the U.S. and China and begin the process of re-balancing the global economy. The Chinese need us way more than we need them… the barrier here is Wall Street and its century long fetish with the “Chinese Market.”