Thursday, November 20, 2008

Obama To Do The Desperate

The News:

Obama set to implement 'radical' economic policies: Report

Thu, Nov 20 02:34 PM

President-elect Barack Obama is promising to intervene in the economy in ways that United States hasn't tried since the 1970s, favouring some industries and products while hobbling others, a media report said on Thursday.

Under his financial policies, the Wall Street Journal reported, banks seeking government assistance would be forced to lend and to halt foreclosures. Automobile companies would be pushed to change their product lines to more advanced, fuel-efficient vehicles.

Billions of federal dollars would promote solar, wind and biomass energy, while dirty coal power could be priced out of business.

Obama advisers were quoted by the paper as saying that difficult times necessitate extraordinary measures. "We are in the midst of a massive reorganisation right now in autos but also other areas as well - finance, information technology. All of this flows into...the new green energy economy we are living in, albeit in an embryonic stage," David Bonior, an economic adviser to Obama and proponent of a more interventionist industrial policy in the 1980s, told the paper.

Asked if this was the industrial policy of the incoming Obama administration, he replied: "The answer is yes."

Critics and advocates alike, said the Journal, see the re-emergence of government economic steering that was in vogue when Japan, South Korea and Germany embraced it three decades ago, then discredited after its key practitioners slipped into deep economic funks. With the upheavals in world capital markets, pure free-market policies are facing more criticism, it noted.

My View:
I have two views on this news -

  1. I am true believer in free market economy and in my opinion govt should always keep away from the economic affairs. If markets are truly left on their own, they will always find equilibrium but govt interventions are always detrimental to the long term health of markets. Thus, this motive of Obama, although in good intent, might be dangerous in the long run economically.
  2. I am a GREEN LOVER. I strongly dislike the rampant use of fossil fuels as primary source of energy and so this act of Obama might be a good news for eco-friendly humans all around the world. To promote green energy and discourage non-eco-friendly technology and products can be a first step toward better life for our endangered future generations. I would personally congratulate Obama and wish he has the political will and courage to fight enemies of earth. However, he needs to tread with caution as intervening in economy has always proven to be bad for the long term sustainability.

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