Readers of this blog should now understand why Keynesian stimulus and Quantitative Easing haven't worked to restart the American economy (see How to Grow an Economy). Numbers released by the government last week showed an increasing inflation rate and a continuing high unemployment rate--stagflation--the result we've projected from these policies.
That being the case, with none of his actions able to stir the economy from its torpor, it appears that the President has actually given up. He's taken his family on an all-expense-paid vacation for 10 days to Martha's Vineyard and said "I'll talk to you when I get back." These are not the actions of a man who "has the answer." And clearly he doesn't, for if he did why wait so long into his administration to reveal it?
But this post is not meant solely to berate the President. He has been in over his head since the minute he was inaugurated and has, with his failure to stand up to the extremists in his own party, made himself irrelevant. Nixon had to go to China, and Obama could have brought the Far Left into the fold. The problem is that Obama is truly the Left's leader and his beliefs in big government and wealth redistribution are simply anathema to a thriving economy. He would have made a good union boss or even Speaker of the House but he should never have been elected President.
Accordingly, when the President finally makes his "jobs" speech in September you can expect more of the same--the leaks already indicate increased aid for the unemployed, short-term reductions in payroll taxes, government infrastructure projects, blah, blah, blah. All of these have been tried continuously since he became President and none of them have worked--or ever will. To review, here is why: (1) extending unemployment compensation not only discourages the unemployed from accepting available jobs but takes money from the still employed thus discouraging them from working so hard and reducing overall production, (2) new companies will not be formed nor employees hired in response to short-term reductions in payroll taxes because the amounts involved are not nearly as large as the additional costs that the President has already imposed (e.g., Obamacare) on job creation, and (3) the government cannot build any bridges unless it first takes the money needed to do so from its citizens, thus ensuring that any employment benefit from the new bridge is offset by an employment loss elsewhere.
It is simply astonishing to me that, even though all of these policies have been tried and failed, all the Democrats can come up with is more of the same. Paul Krugman, the New York Times "economist" would have the government double-down on spending and I'm sure, when that didn't work, he would spend more. To him and other Liberal "economists" the fact that Keynesian policy has not worked simply means that not enough has been spent! [They are True Believers, more akin to religious zealots than scientists, which is why when I use the term "economist" with them it is bracketed in quotation marks.] One definition of insanity is doing the same thing over and over even though it does not work. Democratic economic policy certainly qualifies.
In light of his economic policy's abysmal failure, a President that truly represented all Americans would be flexible enough to realize that his advisers have been wrong and that a new strategy needs to be adopted. One that realizes that the government is not the salvation, but that its citizens are America's greatest strength. Millions of our relatives came to the United States, not for a handout, but to escape intrusive governments and to forge their own path--they came for freedom. To succeed, America needs to return to its roots. And to do that, what is needed is a policy that enables individuals to create opportunity by.getting government out of the way.
Continuing the redistributionist policies of the Left may help Obama to be reelected, but it will also ensure that the country continues to stagnate. Bill Clinton changed course and the economy thrived. President Obama needs to learn from President Clinton. He can't have it both ways--he can't save the economy and continue to back every tax and spending increase and regulatory program advanced by the Left. Until he realizes that to be the case, anything he does will be as effective as pushing on a string.