Friday, June 03, 2011

It does not work

We have tried spending money. We are spending more than we have ever spent before and it does not work. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot!
Henry Morgenthau, Jr. - FDR Treasury Secretary, testifying before Congress, May 1939

Imagine two scenarios:
  • Today's awful economy but Obama loses his re-election bid
  • A booming economy, > 7% growth and < 6% unemployment, but Obama gets re-elected.
Which would you choose?  I would choose the second, of course.

But the second scenario just will not happen.  Because the main causes prolonging this dismal grey economy are Obama's various policies -- big gov't spending chief among them. Sadly, I have no doubt that the second scenario could not possibly occur.

The sad thing is, we could right this ship tomorrow with little or no further gov't spending.  We would just have to repeal three bills: Sarbanes/Oxley, Dodd/Frank and Obamacare. Regulations in those bills are hampering job creation. All it would cost to repeal them and reinstate the status quo ante would be the cost of printing the repeal bill and signing it into law.

Picture a lion, chained to the ground so she cannot hunt, weighed down with a heavy iron collar so she cannot lift her head to eat, and presented with oatmeal instead of meat.  Is it any wonder such a beast would waste away and become sick? Would you express astonishment if her muscles atrophied and her skin sagged? But release her and let her hunt easy prey and will she not recover?


Rich said...


Glad you are writing again. I have been looking forward to new posts with your simple common sense approach to politics.

I live in Minnesota and an advertisement started running that summarizes progressive thought perfectly:

I completely agree with the first statement in this ad: "How we solve our budget problem will say a lot about our values". Let’s give nothing up, expect all of the same benefits we received in good times, not pay more for them in difficult times, and expect to pass all of the cost onto others like the rich. If this sounds like a good plan, it says a lot about your values.
If you want to cut spending but are unwilling to cut programs that you like, than you are not serious about cutting spending.

What do you think?

Newton said...

I think it's a tad bit more complicated than that, but certainly less Gov't intervention in the free market is a step in the right direction! Look up the "Peter Schif was right" video on youtube. He's great, and has helped me understand economics much better!


Newton said...

Great post. Love your analysis of our presuppositions in going in to examine Gov't spending, et al.

Norma said...

Agreed. Repeal those 3. . . and get rid of the Dept. of Education, and the EPA and then see where we are.

learn chinese said...

Excellent post- I think you've given an extremely reasonable response.

Norma said...

Anonymous said...

Seriously? "Get rid of the EPA?" How young are you kiddies? The EPA is what forces the fat cats to clean up the messes they love to leave behind. Personally, I'd like to see an EPA with teeth, one that could haul back executive bonuses several decades when those crooks pour toxic chemicals in a community, bankrupt their shell company, and leave the rest of us to clean up their mess.

You're in a small crowd if you imagine that crooks like Romney should be paying 14% while people who work for a living pay 35-40%. The idle rich do nothing for society, they aren't job creators, they don't pay anything near the costs they extract from society. Inheriting money is not anything similar to "earning" it. Every intelligent President from Washington to Kennedy believed that the idle rich are a drain on society. Reagan was the first con man to convince the marching morons to pity the billionaire. It wasn't an original idea, though. Every Republican since TR has played that game.

e.a.f. said...

Upp, I agree, less government involvment in business. We should start by not giving them tax breaks that the rest of the citizens don't get; all americans pay the same tax rate, regardless of what they are. Of course asking people to pay taxes who earn less than the poverty rate isn't on. As good Christians you should know that.

Now that the supreme court says businesses are people they can pay taxes at the people rate. No government grants,subsidies, etc because if average citizens don't get the grants than the average companies shouldn't get the grant. That takes the government out of a lot of business.

Oh and we should also take business out of the government. Lets end the lobbyists. they are such a huge expense to corporations and the shareholders might like a tad more in dividends. Lobbyists take up a lot of a politician's time so lets get those politicians working more frequently and onto the floors of the House and Senate. I think that would be a good start of a seperation of government and business.

Those free trade agreements the government negotiated with other countries, get rid of them. That wuold improve the sepration of government & business. If all those goods Walmart and other companies import weren't being imported there might be a lot more American manufacturing jobs.

Getting rid of the EPA, not such a good idea. We need them to ensure the continued health and safety of our earth. Now we could maybe establish a rule that business not lobby the EPA to make profits & doing business easier for them. You know a little seperation of government and business. Plus, us Canadians don't want more smoggie American air coming up here. not to mention some of our water ways are joined.

getting rid of the dept. of education. Not so much. Education is the source for smart, inquisitive people who invents things, run companies, etc. We need a national standard of education so all Americans can compete equally or something like it for jobs in the future. Japan & China have a much greater emphasis on grade/high school eduction.

We need the Health dept. You can't have a country full of sick people if you are going to be challenging countries which have better medical systems. China may not care about medical systems but they have a huge population and their politicians can afford to loose a few citizens here and there. In the USA, although it maybe over populated, would find people in poor health a drain on the economy.

Health care is already a drain on the economy because of all the paper work required by the insurance companies. Other countries spend less on medical care because they don't have to deal with all the forms.

Liked the column, good luck.

milkchaser said...

Some very interesting responses to this post. I did not think it would be that provocative. I'm happy that it inspired people to comment.

Anonymous said...

I disagree with you. With Bush, we had 8 years of tax cuts, less insured, and industry types gutting regulations. How many jobs did that result in being created?

milkchaser said...

I did not realize that the Bush administration we had "industry types gutting regulations." Perhaps you can provide an example of an "industry type" that gutted a regulation. I would be interested to learn of a single example of that.

Also, under Bush we did not have 8 years of tax cuts. The bulk of the Bush tax cuts came in 2003, so we had 5.5 years -- after which, the economy did rather well for 4.5 years. Employment peaked in early 2008 as seen in this chart:

As the chart shows, as employment started to climb shortly after the 2003 tax rate cuts were put in place and continued to climb until 2008. Even at the lowest ebb of the recession during the early Obama administration, employment was higher than in 2003.

So, yeah, jobs were created. How many? millions. So far, during the Obama administration, we've come back to around 2005 levels. You will notice how relatively flat the rate of growth in jobs has been lately.

This slow growth is unlike any recovery period following a steep recession since the Great Depression (which Obama seems to want to emulate).

As for being insured, I assume you were referring to medical insurance. As the chart at the following link shows, as employment rises, more people tend to get insurance. So while employment rose during the Bush administration (because of the tax rate cuts) more people got medical insurance. And as the recession took hold, more people have lost it.

Unfortunately, even as people have started to come back to work during the slow growth Obama recovery, and despite all of Obama's claims to want to get people some medical insurance, the ranks of the uninsured continue to climb.

Obama fails once again. What an awful President he is.

thetruthonly said...

Comment moderation is BS, but anyway..

I agree eid U so here is one link to my rants on Ben B. and the lack of free markets!/2012/11/stock-market-fraud-tips.html