Biden: "We Misread How Bad The Economy Was" -- A Comment Scripted by the American Petroleum Institute?
Vice President Biden, in humble contrition "confessed" that the Obama administration "misread" the depth of economic troubles it inherited. In doing so, in putting it into the terms he did, displayed a chilling lack of understanding of the economic landscape.
There seems no comprehension, and no mention, of how the cost of oil has encumbered the economy. Since February, or less than a month into the Obama presidency, the price of oil has doubled. It has moved quickly from some $33/barrel to over $72 barrel, and hovers around $66 barrel today.
The nation consumes some 20 million barrels of oil daily. A doubling of price to the current circa $66/bbl dollars means a daily additional "tax" on American consumers and industry of some $660 million. Simple arithmetic: 20 million barrels by $33 (the difference in today's $66/bbl price to February's $33/bbl) totals $660 millions a day. In rough numbers, making allowances for variations from these benchmarks both up and down, the massive total cost to the economy impacted by the doubling of oil prices from the end of February through the first days of July was nearly $70 billion. This real-time sum virtually neutralizes in large measure that portion of government's stimulus package that has been spent to date.
No it wasn't altogether "We misread how bad the economy was" it was more "We misread what was happening in the economy". Yes, and rightfully, alternative energy was seen to be a high priority of the administration. However, to the oil industry's cheer, there was little or no focus on the immediate and insidious impact of oil prices, their manipulation by OPEC and speculators who were given a pass, in spite of their machinations on oil prices and its profound impact on a faltering economy with mounting job losses and the steep contraction of discretionary spending due in large measure to the cost of energy.
Hardly any forceful initiative by the CFTC over the aberrations of oil trading worldwide, not only in the commodity exchange of New York, but in the offshore exchanges be it London, Dubai, Singapore, not to speak of the burgeoning over-the-counter market. The CFTC needs to pursue aggressive policies for far greater transparency in trading of oil futures -- to identify who and for whom trades are made, how much is being traded, and to what end.
And then the administration placated the oil industry and the likes of the American Petroleum Institute by blindly continuing to load up the Strategic Petroleum Reserve, purposefully or inadvertently, sending a signal that the doubling of oil prices is OK as far as it is concerned.
As the New York Times quoted a Deutsche Bank analyst today, "Crude oil prices appear to have been divorced from the underlying fundamentals of weak demand, ample supply and high inventories". Certainly the administration has its hands full, but clearly something is deeply amiss. The sooner Mr. Biden et. al wake up to this issue the better for all of us!
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Maybe I missed your thoughts on this Ray;
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"Rogue broker" blamed for oil spike, FT July 2nd, 09
yeah, where is ktm???
LOL--yeah, inquiring minds want to know...
How can an economy based on consumerism ever begin to crawl out of the chasm created by the financial sector when the price of oil dictates the price of everything from pancake batter to heating bills to health care to---well, like I said, everything. And why is oil so high???? Another act of corporate vampirism sucking the blood out of our society and sanctioned by our government. Please, please start talking about oil and why it is so high. Try and tell the truth now. Don't forget to talk about Russia and how upset they were when the price of oil fell and how they started making war with their neighbors. Don't wonder why the bids for the Iraqi oil fields were too low to mean anything. Why would the oil companies want to glut the market with a new source? The price of oil would have to come down! And don't forget to mention the oil lobby and it's grip on our politicians. Between the squeeze of big oil, big banks and big pharmaceuticals and health insurance companies it's a wonder our politicians have any time to spend with their families! Poor dears. All that free speech just filling up their campaign coffers. Or is it coffins. Because they may as well be dead to the rest of Americans. They certainly don't seem very influenced by us and our paltry votes.
Not to beat a dead horse, but if you haven't read Matt Taibbi's article on Goldman Sachs in Rolling Stone (also available on the net) Please do. He ties all the strings together about how they gamed the energy markets and the ripple effects that has had on everything--and i mean Everything--else.
Sad to say - an economy based on consumerism will eventually strangle the planet - we're in the first stages of suffocation now. Paradigm shift became a hoary cliche - now it's all that will save earth as we know it.
I should not be surprised by the economic illiteracy of those commenting on this post. Crude oil, the price of which is tied directly to the U.S.$, is driven by demand and inventories. Yes, demand has not been very high, and global inventories are running above the 6 month averages, but one part of the equation has seen significant change. The number of dollars has increased incredibly over the past 3 months as the administration has had to change the ink in the presses used to print dollars.
The incredible increase in supply with a reduced demand, anyone notice that the last auction for federal debt did not have a bunch of bidders, has dilluted the value of the dollar. That same dollar that is connected to the price of crude. If the dollar aint worth as much as it was 5 months ago, the price of everything traded will go up.
The blog poster talks of how terrible the crude price increasing from $33 to $66 is hurting Obama's work to improve the economy. There was not mention of the incredible crude price run up last summer. I know that $33 to $66 is significant, but $33 to $150 is astronomic.
Yes and that explains why oil was over $140 per barrel last year,,,,,,I think not...Wake up and smell the cofffee...
You guys are so blind! Do you really think they misread the economy? If anyone knows how fast this country is falling, it's the government. Biden is setting things up so that they can push for another stimulus - and that was their plan all along. May I remind you that that was not the first time he said it, Obama's said something like that and so has one of his staff members on MSNBC - why this is getting attention now is beyond me.
It's getting attention now because 6 months-ish into his presidency the economy is not improved and may even be worsening. So they have to say something (even if it is resaying it).
Bummer since Mr. Obama campaigned for TWO YEARS on the issue.... ugh, how can he not get it together to some degree by now?
They didn't misread the ecomony, they're adding to it. . Look how many folks are now unemployeed with the creation of Government Motors? This should be a clue as to what is a head. The economy has no chance of recovery under this administration
I think you've scratched the surface on a larger question beyond the price oil. What is exactly the economic philosophy of this administration? It appears to be something that of Milton Friedman and Goldman Sachs.
It was Friedman's contention the 29' depression was the fault of Federal Reserve for failing to expand the money supply sufficiently in the wake of the crash.Tril
In essence, the leeches have been given a transfusion to further drain the host. This doesn't bode well for future economic performance in my opinion.
Personally, unlike Summers, who admires Friedman as some sort of "The Great Liberator" (*check Google), I'm in the Galbraith/ Batra camp. Decades of imbalances between declining real wages and productivity gains can no longer be bridged with increasing debt, so now we face a deflation and unemployment. (Depression)
" It will never be possible for any length of time for any group of the American people,
either by reason of wealth or learning or inheritance or economic power, to retain any
mandate, and permanent authority to arrogate to itself the political control of the American public life."
- FDR June 1936
I take consolation in that quote, with all due respect to our dear DLC.
Galbraith rules! And Keynes if right there, too.
Our dear DLC that colluded with the repugs....
Five months ago President Obama continuously referred to the financial crisis as an impending economic catastrophe. How does that qualify as misreading the depth of our economic troubles?
He misread it because his reactions to it made it worse. We didn't need Joe Biden to tell us this: all Americans already knew spending too much money won't get rid of debt. Duh.
I continue to hope that once the banks are out of danger and the stock market recovers a bit--i.e., once we are no longer held hostage by panic and fear--then the president will start applying the screws to the financial industry, and hopefully to all speculators, not just the ones who drove up the oil prices.
I also remind everyone that he's doing his best to reduce our overall dependence on oil, which is a great thing. It's treating the disease, not just the symptoms. However, that will take time and a long-term perspective on the part of all of us.
Plus, oil prices aren't anywhere NEAR where they were at the end of the Bush presidency. And the Bushes, I will remind you, were all buddy-buddy with OPEC. If they couldn't control the oil prices to benefit the Republicans, then it's certainly unreasonable to think that Obama could.
PUH LEEZE-bama's biggest donor was Goldman Sachs-he'll never bite the hand that feeds(and I voted for the guy-Change!-my a**)
Or, what even the other sleazy wall street bankers call them--Government Sachs!
Why should this shock anyone. What experience did the POTUS have with anything having to do with an economy or running even just a small business? You've got to like the guy for what he represented but reality has hit home.
O went to an Ivy school and HE SHOULD have known that the Washouts go to the Business Schools because they are not smart enough.... See AL FRANKEN, he is the real brain.
The talk about a business school Oath was almost as funny as the Hypocratic Oath for doctors...
huh? This unemployment mess is because of oil prices..? not even the Sierra Club believes that nonsense.
The Obama Administration has no credible excuse for underestimating "the depth of economic troubles it inherited.
I didn't and I certainly was not alone. The was no shortage of evidence available for the Obama Administration to draw the correct conclusions. I believe your post is misleading because you attribute the Obama Administration's failure to the oil companies doubling the price of crude oil without an evidence-based reason for doing so. What was so unpredictable about that, given that that has been their SOP forever?
The fundamental flaw in the Obama Administration's economic policy is its decision to sacrifice We the People by underwriting all of the risk of loss in the financial markets while ignoring the paramount need for systemic reform by regulating, monitoring, and eliminating the market practices that caused the market meltdown. The markets are remaining afloat on Monopoly money with no incentive to change .the way they do business.
I consider this administration's policy to have been doomed from the outset.
I considered it doomed when Geithner and KashKari were not laughed out of DC....and Summers. and when Dean got the shove out the back door....
Manipulated energy prices are just one example of the current and future manipulation of our currency, commodities, manufactured goods and other assets. Our regulatory bodies have become the ownership of our growing plutocracy and foreign interests.
There is no price stability. There is no rational means to predict future costs. Our finance and economy are in the hands of speculators and deep pockets. Such an environment bodes ill for business origination or growth.
It is a sign of a developing country that does not have the will power to protect its citizens..
Until we have public financing of elections we are doomed to continue on the same path...Rem
To cure Alcoholism you have to take away the booze. To cure Greed you have to take away the immoral and illegal profits...
And to cure energy waste you have to take away cheap oil.
TAX IT TO DEATH..... I am sick of Paris Hilton, I am sick of my sister in law who never worked a day in her life and laughs at me and my 2 weeks of vacation..
< "As the New York Times quoted a Deutsche Bank analyst today, "Crude oil prices appear to have been divorced from the underlying fundamentals of weak demand, ample supply and high inventories". Certainly the administration has its hands full, but clearly something is deeply amiss. The sooner Mr. Biden et. al wake up to this issue the better for all of us" >
Yep, that "SOMETHING AMISS" is simple enough... Barack obama now SEES HIMSELF as an "INVESTMENT BANKER" whose job it is TO CORNER the markets on ANY and all commodities, and to thereby EXTORT the consumer public (in America AND worldwide, see MONSANTO selling GM seeds to starving Indian farmers, or Goldman-Sachs "goosing" the world's oil markets,
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When is President obama going to wake up to the picture that he is making a corrupt, in-the-pocket of Wall Street banksters CARICATURE of himself... and thereby PROVIDING the hate-radio radical Right some LEGITIMATE ammunition to stoke their fires of hate & resentment with ???!
Where is the party that is supposed to represent us? I mean, where are they?
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