Obama's stimulus defense

Saw Obama's talk last night. These guys have got to start reassuring me. The salary caps they plan for business is instructive. One of the rules in economics is that if you freeze the value of something, it disappears because the production decreases and the demand increases. You freeze the price of oil, it gets scarce; if you freeze the price of mortgages, mortgages get scarce. It's like a pool: the lower the price that is fixed, the smaller the pool. On the other hand, if you artificially fix a price higher than the product is worth, the supply of the product will rise to meet it. The pool will fill more. So if you fix a salary for carpenters and do not let it adjust, you will have fewer carpenters and more demand. If you raise the price you will have more carpenters and less demand. This can get really complicated and that is what these guys are creating: they are supplying money to the system in various specialized areas and the system will determine what it is worth. The only problem is that for the first time I believe Harry Reid; they don't know what to do. So they are going to do something.

Watching the Obama speech last night was unsettling in a number of ways. One thing that surprised me was his remark about "cable t.v." and "talking points". This was said in the context of criticizing the doubt that has arisen about the "stimulus plan". The cable audience is really small. O'Reilly is the most successful show and he draws 3 million viewers at most. That may be good advertising numbers but, in a country of 300 million, it's small. And it is strange to attribute the skepticism about the plan to this minority. There's no question that Fox talks to a group that has been driven to it by Obermann and will probably be right of center but Lou Dobbs sounds right of center any more. Acting as if this tiny minority has some huge impact is peculiar, especially when they don't get mainstream attention. Years ago Ms. Smeal of the National Organization of Women could cause a stir representing less than 60,000 members because the media liked them. Nothing on Fox gets media attention. I really wonder what the thinking is here. I hope it isn't scapegoating but it sounds it. And Obama saying things like "This is not my plan" is not reassuring.
I think objections like this are legitimate: http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020502766_pf.html
I don't think they can be just brushed off by being the result of goofy cable guys and intense special interests. And if that will be the government position, I think we all have some serious trouble.