Founded by Drew Pearson 1932
The party of Hoover isn’t listening
By Douglas Cohn and Eleanor Clift
WASHINGTON – President Obama is getting hammered by the chattering class for staging a series of speeches without offering any new policies. The criticism is justified, but then what new policies could Obama offer that would receive a positive reception from Congress? The answer is probably none unless Obama underwent a major conversion and came out for lowering taxes on the rich and deregulating the economy so businesses wouldn’t have to deal with restrictions imposed by the government.
That won’t happen, but in the real world – not the one created by Fox News and the Republican National Committee – the economy is doing pretty well. There have been 40 straight months of job creation, granted not enough jobs, but a far cry from when Obama took office and the economy was losing 800,000 jobs a month. The deficit is coming down at a record pace, faster the White House points out than de-mobilization after World War II.
If Congress would pass a jobs bill, a farm bill, and an infrastructure bill to rebuild the nation’s decaying roads and bridges, the economy would be in much better shape. When taking into account the spending cuts forced by sequestration, the economy still manages to hum along at a reasonable pace – sub-par for middle-income families trying to make it, but not enough of a crisis to force action on Capitol Hill.
Obama is trying to reset the agenda going into the summer recess and then the fall, when the Republicans are eyeing deadlines to fund the government and raise the debt ceiling as opportunities to extract more spending concessions from the administration. It’s amazing that in the face of all current evidence to the contrary, Republicans still insist that another dose of austerity will get the economy moving.
Austerity is not working in Europe, which is still struggling to emerge from the financial doldrums. Obama calls Europe’s problems one of the “headwinds” that has kept the American economy from bouncing back.
Another headwind is China, where growth is down to 7 percent, a figure so removed from what Europe and the rest of the developed world is experiencing that it might as well be in a parallel universe. China rocketed up to become almost overnight the world’s second largest economy, and when it scales back, there are implications for the entire world.
America is still the number one economy and the envy of much of the world, but what happens on Wall Street and Main Street is subject to what happens in Europe and in China. Obama did the right thing employing Keynesian economics to spend his way out of the Great Recession. He did what Hoover should have done in 1929, but Hoover ignored the advice of British economist John Maynard Keynes. Instead, Hoover opted for austerity, and the Great Depression was the result.
Federal Reserve Chairman Ben Bernanke, an expert on the Great Depression, correctly reaffirmed his commitment to keeping interest rates low by printing money. This, in turn, allowed America to borrow from China and the rest of the world at levels near one percent. Meanwhile, U.S. energy production is at an all-time high with sustainable alternative energy coming into its own in the marketplace.
The time is ripe, while cheap money is available, to get all those infrastructure projects going, but House Republicans say no, they’d rather spend their time cutting programs and threatening to repeal Obamacare. The economy is poised to take off if only the GOP would remove the shackles. That’s what Obama is saying, but the party of Hoover isn’t listening.
© 2013 U.S. News Syndicate, Inc.
Distributed by U.S. News Syndicate, Inc.
END WASHINGTON MERRY-GO-ROUND