Monday, November 2, 2009
The Economic Recovery Fantasy
By Alan Caruba
I freely confess that I regard it as a triumph if I can balance my checkbook. My Father was a Certified Public Accountant and surely despaired of his second son (the first became a CPA!) who had no head for numbers.
Like most Americans, though, I find it laughable, if not outright mockery, when the White House and the lapdog media tell me that the nation is now recovering from the recession. The media, as just one example, is bleeding thousands of jobs that are not likely to ever return.
What I do know is that, as of November 1st, 115 banks have failed this year. They represented combined assets of $19.5 billion at the end of September. Most have been gobbled up by larger banks. In 1989, at the height of the savings and loan crisis, the FDIC closed 534 banks or about ten a week.
Rep. Ron Paul, a Republican congressman from Texas, flatly says, “A false recovery is under way. I am reminded of the outlook in 1930 when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones Industrial average did not recover to 1929 levels until 1954.”
It took ten years and a World War for America to dig out of the Great Depression.
The President’s economic team, Christina Romer, Peter Orszag, Larry Summers, Timothy Geithner, and Jared Bernstein scare the heck out of me.
I would much rather have Ben Stein running Treasury and Larry Kudlow overseeing the national economy.
The waste of billions of taxpayer dollars in the bilious “stimulus” bill was the ultimate wet dream of legislators, the opportunity to tap the treasury for every “pork” project they had been promising the voters.
Far worse, however, is the healthcare “reform”, if passed. As reported recently in the Weekly Standard, Medicare fraud now costs Americans an estimated $60 billion a year. Compare that with the annual $8 billion in profits of all the private insurance companies combined!
The Pelosi-Reid bill is Medicare on steroids, but the yet unanswered question is this: If Congress can require you to buy insurance even if you don’t want to, what else can you be compelled to do?
Christiana Romer recently testified before Congress that the stimulus bill has accomplished little at this point. The abortive “Cash for Clunkers” program has been calculated to have actually cost the government six times the rebate whose effect lasted all of a month.
Meanwhile, when its treasury notes are not bought by foreign investors, the nation buys its own debt, a scheme that is impossible to maintain. I do not loan money to myself. I either save it or spend it.
Congress should be reducing taxes—the U.S. tax rate on corporations is among the highest in the world—and taking steps to relieve the tax burden on small businesses which are the heart of employment and the economy in general.
Congress is also getting ready to raise the cost of energy for every American family and enterprise with the hideous “cap-and-trade” bill.
Energy in America has long been one of the most affordable elements of the economy, but the Obama administration is throwing billions at the least productive elements called “clean energy”, solar and wind, while declaring war on coal that provides just over half of all the electricity we use every day.
The figures cited for unemployment are a bad joke. Officially set at 9.5 percent, it is actually likely to be closer to 14 percent, about the same amount as during the Great Depression of the 1930s.
Everyone is aware that the economy is not recovering. It is reflected in reduced inventories. It is reflected in continued layoffs. It is reflected in retail advertisements offering two-for-one deals. It is reflected in less consumer spending. On Halloween, my local mall already had a big Christmas tree on display.
I find it insulting that the government is eager to give money to people defaulting on their mortgages because they couldn’t afford them when the government was pressuring mortgage lenders to make them.
I find it insulting to be told about jobs “created or saved” by the White House when this is a pure fantasy. Only private enterprise creates real jobs. Government jobs add nothing to the economy except another layer of bureaucracy. What America needs is productivity.
I find it insulting to be told that the recession is over when it is just taking a breather before the mounting debt from White House initiatives overwhelms us all, rising unemployment continues, and senseless legislation is still in the pipeline.
None of this is good news, but it is, at least, the real news.