Filed under: Capitalism, Economy, Liberalism, Statism, Taxes | Tags: Bumps on the Road to Recovery, Enough With the Road analogies, M, Time for Golf, We Need More Patience
“There are always going to be bumps on the road to recovery,” President Obama said recently, when he was celebrating the sale of the government’s remaining stake in Chrysler. The Treasury was ecstatic that Fiat had agreed to pay $560 million for the Government’s Chrysler shares. As Obama celebrated saving the auto industry, he didn’t mention that it was saved with 16,000 fewer auto workers.
The inimitable Mark Steyn took that up on Saturday in a column titled “Obama’s Road to Nowhere: This is Main Street, Obamaville; All bumps, no road.” Mark Steyn has the amazing ability to tell you the really bad news and make you laugh while he does it.
“I’m not concerned about a double-dip recession,” Obama said last week. Perhaps it’s because all his economists have departed for the more comfortable surroundings of academe. I think we would all feel better if he was more concerned.
The American economy has amazing strengths. We have flexible markets, a smart workforce, a tradition of labor mobility, and a strong entrepreneurial class that should be driving the recovery and steadily cutting back on the unemployment rate. Ideas are always plentiful among a free people.
So what’s going wrong? Why does the economy seem stuck? Obama is annoyed because business is not stepping up and hiring and expanding. Unfortunately, nobody in the administration has any business experience, nor run a business and discovered what it takes to keep a business solvent. So what’s holding the economy back? What is missing?
Confidence. Trust. Hope. Faith. Expectation. Optimism. Anticipation.
Americans are an optimistic people. Recessions are always the by-product of mistakes. Government mistakes, business mistakes, financial sector mistakes, and fixing them takes time. What causes confidence to return? This president has done more to destroy hope than any president in living memory. He didn’t tell us that the Hope he espoused was ensconced in a vision of a regulatory state in which disinterested experts who were assumed to have the factual knowledge, practical wisdom and unwavering integrity to manage the economy well. He was wrong. Americans cherish their freedom. They don’t need overbearing regulation, and they resent it.
When an economy is in trouble, there is a history of moves that work to restore confidence. The U.S. corporate tax rate is the highest in the world. If you want corporations to have more incentive to hire, why not cut their taxes? When economic times are terrible, why would you raise energy prices dramatically and lay people off? The EPA is ratcheting up standards that will shut coal-fired plants down, and consumers will see their electricity bills jump an estimated 40 to 60%. When you supposedly recognize that there weren’t any shovel-ready jobs, why are you blathering on about investing in infrastructure and “green” jobs. Why do you pretend to reduce unnecessary regulation while your agencies turn out new ones faster than ever?
Unfortunately, almost everything a government does in response to a recession delays and weakens recovery. Politicians naturally try everything they can think of to soften the blow of a recession. Generous unemployment insurance postpones the search for a job. The first-time homebuyer’s credit was meant to help, as were programs to slow the foreclosure process or keep families in homes that they cannot afford. Well intentioned, but it delays the correct price discovery process. We’re two years into the recovery and housing prices nationally are still falling.
The Obama fiscal stimulus failed, and substituted for other fiscal policies that would have helped, like permanent tax-rate reductions — proven strategies from the Bush, Reagan, Kennedy and Coolidge administrations. The president campaigned for higher taxes and continues to argue for higher rates, especially ideologically motivated higher tax rates on the wealthy, on saving, and on small business.
The free trade agreements with Columbia, Panama and South Korea, long negotiated, still languish, unsigned, on the president’s desk. Expectations about inflation have a big influence in the economy. Fearful expectations about what the future will bring can be self-fulfilling. The evidence that Obama’s economic policies are failures is abundant. How strange that the man who ran on a campaign of Hope and Change has brought so much change and so very little hope.
2 Comments so far
Leave a comment