no pressure then

Marc Ambinder is a reliable source of insight into what the people in power are actually thinking and feeling, as opposed to saying in public. And he says the Obama people are, well, shitting themselves about the state of the economy:

Without going into details, the sense I get from them is that they are very worried that the economy will get a lot worse before it gets better. Not just worse... a lot worse... In one sense, the general level of concern among Obama advisers and transition staffers is reassuring; they get the magnitude of the problems, and they're not going to assume that, just because the bottom has never dropped out before (certainly not in the lifetimes of most people doing policy these days), the bottom will never drop out.

Where the discussion isn't going, at least in public, is the possibility that the first foreign policy crisis the administration will face will be the complete economic collapse of a large, unstable nation. To be sure, Pakistan is nearly broke, and U.S. policy makers seem to be aware of that; but a worldwide demand crisis could lead to social unrest in countries like Indonesia and Malaysia, Singapore, the Ukraine, Japan, Turkey or Egypt (which is facing an internal political crisis of epic proportions already). The U.S. won't have the resources to, say, engineer the rescue of the peso again, or intervene in Asia as in 1997.

Comments

[dp]

Too easy to resist, this one.

If you take the general principle that every crisis is an opportunity, then a global crisis is also a global opportunity. But for what? For the new leadership to leave it's mark on the world order that emerges out of it. A smart, flexible, capable team in the White House might - just - pull that off. Wolfie, Rummie, and the PNACers will rue the way they've opened that door for someone else to exploit.

[dp]

damn, two typos...

[Tom Grey]

The economy will get worse, first. A lot worse. Every sector will have major layoffs.

Money needs to be printed and given (or better, loaned at very low rates) to folk to spend it -- so their spending shows where the future growth (or minimum losses) should be.