Obama and the Economy -- Two Perspectives

By Keith R. Schmitz

One of the charges that the GOP made great hay over as they spooked a herd of voters and then stampeded them over the cliff was their cry that Hussein was engaging in Socialism, particularly in the cases of the bank and automaker bailouts.

The GOP has elections to win and hopefully they know better, but as usual perspective gets manhandled in favor of shrillness. Hell, why tamper with a strategy that works, especially with the under-engagement of a big enough chunk of voters. Two articles I'd like to throw out on the topic.

The question to be asked is, was what Obama did warranted? The teeth grinders scream that Obama ruined capitalism. Timothy Eagan on the New York Times blog The Opinionator argues that in fact The President saved it.

He goes illustrating how investments have gained value in the 18 months Obama has been in office. In the process, big institutions have been prevented from going over the waterfall, and as the not-too liberal The Economist put it, "an apology is due Obama." Of course quite the opposite just took place this week, perhaps to our peril.

Admittedly one of the major features of the recovery efforts, TARP, was launched under Bush. But it was largely administered by the new folks, and the great under-reported story about the Obama people is they are darned good at running things, despite GOP efforts in the Senate to approve the people to do the work.

The stimulus program was conducted with scant corruption. Compare that to the porkfest around the Iraq invasion and other instances of graft under the Bush era.

That leads to the other question of is government intervention the new normal? In a recent piece in strategy+business from the international consulting firm booz and company, the authors observe that thanks to poor regulation on the front end, governments have been forced to intervene into failing industries.

While this makes Tea Partiers' hair stand on end, the authors argue that government butting in is necessary. Admittedly sometimes the effort doesn't work well, but other times it does, certainly when considering the sure economic collapse that would have ensued with the financial bailouts.

Even Bush admits that in his new book. Closer to home, letting the automakers succumb to their own miss-management would have radiated fatal effects to the many support industries here in Wisconsin.

Again, there is evidence that the Obama administration did its job in leading these companies out of the wilderness as evidenced by the money returned to the US Treasury. It could be argued that the sweetheart deals favored by the Bush administration would not have resulted in as good of an outcome.

The authors in fact conclude that now governments not just in this country are assuming the role of stakeholders in affected companies, and that moving forward this kind of action is here to stay as a means of mitigating crisis situations.

The third question that remains, is with the onslaught of extremely doctrinaire right wingers into Congress in a so-called triumph of capitalism, would the new lack of flexibility ultimate kill it.

More for Your Money

By Keith R. Schmitz

Some interesting news today from industry web site Media Daily News:

Democratic Presidential candidate Barack Obama may have made history in raising big bucks for his campaign's fund-raising--but what's more incredible has been his extremely efficient media buying.

Case in point was last week's roadblock of infomercials: According to one TV media executive, Obama's effective price--the cost per thousand viewers (CPM)--came out to a very cheap $1.66. The Obama 30-minute infomercial ran across four broadcast and three cable networks on Thursday night, grabbing a total of 33.5 million viewers.

Such figures are incredibly inexpensive when compared against a typical prime-time network household CPM, which runs in the $12 to $14 range. It is even better against other CPM demographics--such as adults 18-49, where the price tag in prime time is now nearing a $30 CPM for 18-49 viewers, across all four major broadcast networks.

This executive equated the 30-minute infomercial with 60 30-second commercial messages, or $55,000 for a 30-second commercial unit, running across seven networks.

Comparing this number against what the networks typically get for their prime-time series shows glaringly big results. One typical prime-time network spot on any of the big three networks averages around $110,000.

The reaction to this particular media buy? The TV media executive says simply: "Wow."

A couple of things about this.

1) According to many pundits, the way in which the Obama has managed his campaign -- being tight with the bucks and clever when it comes to spending money, efficiently organizing resources, beating one of the most formidable Democratic candidates in some time -- indicates the way in which an Obama administration will govern.

2) These guys get strategy and technology.

3) Those of you fear or who are spreading the fear that is going to be some kind of proliferate spending administration are thinking of somebody else. Team Obama might not be afraid to ask for the money it thinks this country needs, but it appears they will be getting the most for your money in terms of efficiency can results.