|
April 30, 1993
For the fifth time since early March, mortgage rates have bounced back up off the 7.50% zero-and-zero low. If this, newest bounce behaves like the others, rates will rise to 7.875% before heading back down.
The January-March Gross Domestic Product grew 1.8%. Such a growth rate is not bad, just not healthy enough to create much in the way of new jobs.
Were it not for the disaray in the Clinton camp, the deceleration in 1st Quarter GDP would have rates breaking out of the bottom of the trading range noted above. For the first time this year, we fear that the breakout will be on the upside.
It's not so much that Budget Director Leon Panetta is an honest man, though he is. His most important aspect of public character in the last 90 days (100 days?) is his status as an exceedingly transparent liar.
In his nomination hearings in December, he insisted -- and clearly believed -- that the new administration would deal with the deficit "by cutting spending two dollars for every dollar of tax increases."
The president sent out this honest man after the State of the Union address to assert that the new budget plan was heavily weighted with spending cuts, and consistent with his nomination testimony.
As Panetta has delivered, and re-delivered this whopper, he has looked like the most ill-disguised fibber since Richard Nixon -- though Panetta seems pained by the experience, as opposed to showing RMN's surly pride.
The only two-for-anything in Clinton's deal is two dollars in new spending for every three in new taxes.
Leon Panetta's fundamental honesty broke into the open this week when he said that the president's programs are in trouble. Of course they are. But nobody in the administration had been willing to tell the people, or (worse) tell the president.
Mr. Clinton is developing as guy who doesn't want to hear criticism, or unpleasant views of reality. No one listens well while talking. In his press conferences he looks like he wants to say "How dare you speak to the President of the United States that way!"
Current media spin has it that Clinton is "trying to do too many things at once." Horsefeathers. He has lurched 'way off to the left, and is trying to do the wrong things.
If Clinton does not quickly move back toward the center of American politics, his 60's liberalism will bring a new gridlock, and the chance for deficit progress will be lost.
The consequense for interest rates is calculable. The word is "up."
|
