12/16/2011 8:38 PM ET|
D's for Obama (and Congress, too)
TheStreet asked economists, money pros and consumer advocates to grade the economic players' performance in 2011. A bunch of rabble-rousers scored best, but that's not saying much.
You may think the Occupy movement failed. In fact, it gets the highest marks from a range of experts comparing its performance this year with others of the nation's top economic players: President Barack Obama, the GOP candidates raring to face him in a general election, Congress and the Tea Party.
Of course, that may not be saying much. Suffice to say, if this were school, the other players might have to repeat 2011.
America understands letter grades; most of its citizens have gone through a dozen or more years of being ranked on their work from A to F. So that's what we used when we set out to understand how economists, investment managers and consumer advocates saw the work of the people whose ideas are shaping our futures and filling -- or emptying -- our wallets.
Read on for a further breakdown of how our experts felt about the Class of 2011. Some experts wanted very much to talk about our players but not give letter grades at all, giving them "incomplete" reports instead. We aggregated the results and left their individual calls ultimately anonymous. (Their comments are not.)
Economists: Ellen Frank, economics professor at the University of Massachusetts at Boston and senior economist at the Poverty Institute; Stephen M. Miller, chairman of the economics department at the Lee Business School at the University of Nevada, Las Vegas; Jonathan A. Parker, the Donald C. Clark/HSBC professor of consumer finance at Northwestern University's Kellogg School of Management; Benjamin Powell, economics professor at Suffolk University in Boston and senior fellow with the Independent Institute; and L. Randall Wray, professor of economics at the University of Missouri-Kansas City and senior scholar at the Levy Economics Institute of Bard College.
Investment managers: Jeff Auxier, the president of Auxier Asset Management in Lake Oswego, Ore.; James Dailey, a portfolio manager at TEAM Asset Managers in Harrisburg, Pa.; Craig Hodges, the president of Hodges Capital Management in Dallas; Paul Nolte, managing director at Dearborn Partners in Chicago; Robert Pavlik, the New York-based chief investment officer with Banyan Partners.
Consumer advocates: David Arkush, the director of Public Citizen's Congress Watch; Christopher Elliott, the author of "Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals;" Chris Morran, senior editor of The Consumerist; Wes Moss of Capital Investment Advisors and host of the Atlanta radio show "Money Matters;" and Tracy Van Slyke, co-director of The New Bottom Line.
And now, the grades:
President Barack Obama
Obama's supporters argue that House of Representatives, under Republicans control since the 2010 midterm elections, is holding up his American Jobs Act. The bill would cut payroll taxes for employers and medium- to low-income employees, extend unemployment benefits, add infrastructure, modernize schools and upgrade foreclosed homes. The president's opponents say he's unwilling to hold the line on spending.
That particular bill seems headed toward a compromise agreement, but it's been as slow a slog to its signing as it's been for just about any economic legislation the president has supported this year. The White House took an active role in crafting the Budget Control Act and raising the debt ceiling, but it also shouldered some of the blame when Standard & Poor's downgraded the nation's credit rating.
The economists' grade: D+ (four gave grades)
Why: Wray is "glad to see that many of his economic advisers (all of them terrible) have jumped the sinking ship, but will the president replace them with anyone good? Not likely, given the way he treated Elizabeth Warren. By forcing her out, he showed us that he is not serious about reform." Miller agrees, saying it's a "big mistake to let others do the work on the group project."
The managers' grade: D+ (five gave grades)
Why: After some early pro-business efforts and because of bad advice, Hodges says of Obama, "He's now the anti-business president." Auxier agrees, saying Obama "doesn't understand what it takes to promote innovation and jobs."
The advocates' grade: C+ (five gave grades)
Why: Obama frustrates consumer advocates with his failure to deliver on everything from a powerful health care bill to implementation of the Consumer Financial Protection Bureau, which some say could have been done through a recess appointment of a leader. "He reminds me of the kid in high school who promises he'll have fireworks and a light show for an oral report and stands up with just a wrinkled piece of paper," Morran says.
Republican presidential candidates
At various points in the past three months, Texas Gov. Rick Perry, Minnesota U.S. Rep. Michele Bachmann, former Godfather's Pizza magnate Herman Cain, former Massachusetts Gov. Mitt Romney and former House Speaker Newt Gingrich have all played front-runner in the race for the Republican presidential nomination. Their various missteps along the way, however, have made it unclear whether any of them actually wants the job or would ever affect the economy in any tangible way. Indeed, Cain, a former front-runner, has shown his commitment by "suspending" his presidential bid.
Economic game plans such as Romney's vow to decrease the corporate tax to 25%, open free trade to South Korea, Colombia and Panama, and cut all nondefense spending by 5% are just plans right now. But that's just fine by current front-runner Gingrich, the only candidate who can boast -- with varying degrees of correctness -- about his role in passing multiple balanced budgets.
The economists' grade: D- (two gave grades and two gave an "incomplete")
Why: Frank sees them bringing to the table "absolutely nothing. They have nothing to propose" and being so "ideologically blind to the way the economy works that it frightens me that any one of them might be in power."
The managers' grade: C
Why: Three gave grades and one gave an "incomplete." Nolte and Pavlik agree the candidates lack cohesive programs to fix things. Hodges sees the candidates as flawed but having "some very pro-business policies, especially when it comes to energy and infrastructure things, especially tax policies" and Auxier likes that they're "offering solutions besides raising taxes."
The advocates' grade: C- (four gave grades and one gave an "incomplete")
Why: Van Slyke says too many members "fight for the 1%." Moss loves the spotlight put by Cain and Perry on simplifying the tax code and hopes Gingrich and Romney pick up the theme.
Gridlock in Congress is not new, but the 112th U.S. Congress brought the cacophony to a new level. It began in January with a petty disagreement between Democrats and Republicans over the reading of a modified version of the U.S. Constitution. By April, there was a real possibility of a government shutdown and 800,000 furloughed government employees as the two sides bickered. A deal was struck at the eleventh hour, but only after a one-week deadline extension to allow more bickering.
Congress' ineptitude truly took the spotlight in July and August during the debt-ceiling negotiations. With the threat of a U.S. default running up against concern over the ballooning debt levels, Democrats and Republicans took the debate all the way to the Aug. 2 deadline, which is when the Treasury estimated its borrowing ability would have been depleted. Even though an agreement was forged, the brinkmanship in Congress resulted in a downgrade of U.S. debt by Standard & Poor's, the first time the U.S. has lost a prestigious triple-A rating in history.
In the aftermath, a 12-member committee was formed as part of the August budget control act. The so-called supercommittee was tasked with finding $1.5 trillion in deficit reductions to be made over a 10-year period -- and despite roughly two months to complete the job, failed.
The economists' grade: D- (four gave grades)
Why: Powell and Parker see Congress taking the country down the same path as bankrupt countries in Europe. "I think Congress deserves an 'F' and I suspect most of the American people feel that way," Frank says.
The managers' grade: D (all five gave grades)
Why: Four were largely horrified by Congress -- in fact, Dailey says the houses have notched a "horrific year" from a policy and leadership perspective, participating in "blatant political posturing." Pavlik says that "if my employer assigned me a task, I'd be out of work if I didn't complete it."
The advocates' grade: C- (four gave grades)
Why: Van Slyke summed up her grade in the single, recurring word: "gridlock." Elliott asked "Have they done anything?" Morran saw signs of actual anti-consumer sentiment (including the roadblocks thrown in the path of the Consumer Financial Protection Bureau).
The Tea Party
For two years, the Tea Party has been a controversial force -- a grassroots movement with insanely rich benefactors (such as the Koch brothers) and establishment leaders (such as Dick Armey) -- loud and proud in its disgust of free-spending Washington, Obama's "socialist" agenda, and mandates on business and individuals. Welfare and entitlement programs, as well as foreign aid, were hot-button issues at rallies throughout the nation.
In 2010, candidates associated with the Tea Party proved a primary headache for Republicans and Democrats alike in midterm elections. Even though only about one-third of those candidates ultimately prevailed, it was clear the movement was forcing mainstream politicians to adapt to their message or face the wrath of voters.
But how effective was the message this year? Without national elections, would the freshman class live up to its potential and promises, especially in a year much of the political dialogue was right in its wheelhouse -- a bitter debate over raising the debt ceiling and related budget-cutting and revenue-raising conflicts?
The economists' grade: D- (two gave grades, one gave an "absent" and one gave a grade of "mixed")
Why: "They raised many of the right issues but got sidetracked by barely disguised racism and then taken over by the right wing of the Republican Party," Wray says.
The managers' grade: C+ (all five gave grades)
Why: The Tea Party has "energized a part of the Republican party that has dug in its heels on tax increases . . . and that's had an impact on the raising of the debt ceiling and the supercommittee. There's been an influence, but it's negative," Nolte says.
The advocates' grade: C (three gave grades and one gave an "incomplete."
Why: Moss enthuses that the group has good ideas and "clear economic principles" -- smaller government and balanced budgets, for instance. However, Van Slyke says the group is too interested in cutting services "that help everyday people" in the name of a balanced budget, when austerity "does nothing to help the economy."
The Occupy Wall Street movement
Opponents of radical economic imbalance started marching on Wall Street on Sept. 17 -- then sat down and started occupying it. A tent city went up in Zuccotti Park in downtown Manhattan, complete with a lending library and media representatives as well as drum circles and free food. With initial tolerance on the part of city officials and law enforcement, Occupy movements sprang up around the country, then the world.
The occupations and marches drew attention, and soon everyone was talking about the 1% and the 99%. In mid-November the evictions began, and now Occupy's physical presence is gone from most major U.S. cities. But as Adbusters' Kalle Lasn expected, that doesn't mean the end of the movement, just a shift indoors, with more decision-making by social media and less by finger-wiggling at general assemblies.
Did someone say decision-making? The main slam against Occupy has been that its anarchical approach to activism produced muddy manifestos lacking in solid objectives.
The economists' grade: A- or C+ (three gave grades, one gave an "incomplete" and one gave a tentative grade of either A or F "depending on which activist you talk to")
Why: The economists say the Occupy movement started out well (with a belief "in creating a just society, whatever that means," Frank says) -- and "correctly identified the problem of big business benefiting from crony capitalism coming from big government handouts and favors," as Powell says -- but faltered.
The managers' grade: C- (all five gave grades)
Why: The movement is right to call the country on its income inequality, they say, but Hodges thinks "they have no clue about how capitalism works" and Dailey said the "movement has been co-opted by the anti-G-20 anarchists who are up for a protest at any time."
The advocates' grade: B- (four gave grades)
Why: Morran says Occupy started out as a muddle and gained focus, including helping power Bank Transfer Day. Its very public and persistent protests mean that "at least people are actually discussing the problems," Morran says, "and that's never a bad thing." That's not enough for Moss, who finds the movement's lack of clear leadership and imperatives flunkable offenses.
VIDEO ON MSN MONEY
NOVEMBER 6th, 2012 is almost here...then, I plan to vote out ALL D.C. incumbent politicians. Heck, I can balance my budget, so maybe I should run for office!
Seriously, the folks in D.C. DO NOT know which way is up!
Yeah... 'F's all the way around... corruption (Solyndra, Fast & Furious), Healthcare disaster, Libya invasion, Egypt screw up, proIslam dermolition of NASA, economic ruin, death to the US currency supply, multiple million dollar vacations, continued secrecy on his background as he out everyone else. The worst president in history. Out with the facist, marxist, redistributionist. The class warfare was started BY Obama, and HE IS one of the 1%ers.
Before we can blame or hold accountable anyone we need to look at ourselves first. By all means I am in agreement we need a change with the politicians...
Spending money we do not have, not their problem.
Buying a house you can not afford, not their problem.
Driving expensive cars you can not afford, not their problem.
Living above your income, not their problem.
Why not put an effort into buying your own products....(made in USA).
We all need to wake up and quit blaming everyone else for our problems, we have the ability to make changes, so let's start now......Hold everyone accountable.
Our government makes it way to easy.....Let's fix welfare abuse......why are our tax dollars supporting people that do not help themselves? Get something in return like working for it!!!!! Fix our social security, how in the heck can someone collect without contributing???? Fix unemployment, there are jobs out there just check monster, career builder and others. Use the money to make up the difference if you are taking a lower paying job than previous for the 26 weeks or so, use the rest to train for people new positions. Let's all look in the mirror and start holding ourselves accountable for our actions. We are always wanting someone to bail us out of our poor choices. Yes people will always need help, help the ones that need it and deserve it like our veterans and elderly as an example.....it is sad to know we have these individuals living in poor conditions while we keep giving to others to do nothing....
Then we need to look hard at our present leaders an start holding them accountable for their actions......we all would get fired if we did not do our jobs...why should they keep theirs for not doing theirs...take the open check book off of them.
Having obama for president is like having a premed student perform open heart surgery.
(black Alfred E. Newman (Mad Magazine) or black Howdy Doody) LOL Doesn't look like one of 'em?
it's sink or swim time when half of this country just fell below the poverty line...is it necessary for both parents to work 2 or maybe even 3 jobs each to survive?...we used to be a country that worked to live, we are now a country that lives to work, no time to enjoy our "freedom", we work for the government and insurance companies now, plain and simple (look at your paycheck, how much is social security? taxes state and federal? and the rest is insurance, it's at least 1/3 if not more) ...so far the riots have been peaceful, if they keep failing to act and keep spending, History shows us the people will push back
A poor excuss for human flesh.
Obama is not a leader, he is a bleeder of this economy!
Congress is not helping out by trying to control Obama, but someone needs to do it so he will not
any more screw ups and dig this country into a deeper hole.
We need to freeze his assets and put him up for trial of treason!
Fix our social security, how in the heck can someone collect without contributing????
....well Steelerguy, I don't know, everything I've read says you must work and contribute for a minimum for 40 calendar quarters (that's 10 years) in order to collect SS benefits, and that's right in the SSA website. Perhaps you can explain to us how you can get SS benefits without earning them.
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