Can you cite a major initiative on the economy this year? From Congress? From President Obama? How about last year? Or the year before? Or the year before that? Any major move on tax reform? On economic regulations? On economic policy? Well, there must have been some. After all, our economy is “Job One,” right? […]
Can you cite a major initiative on the economy this year? From Congress?
From President Obama?
How about last year? Or the year before? Or the year before that?
Any major move on tax reform? On economic regulations? On economic policy?
Well, there must have been some. After all, our economy is “Job One,” right? And our economy has struggled for several years, right? So our leaders must have made some major moves to kick the economy into gear. Such as…?
Yes, nearly six years ago our leaders in Washington created the largest stimulus package in the history of the world. We’ll call it Porkulus. They burdened the country with massive debt to finance it. But, after that, what?
The stimulus flopped. The president’s top economic advisers quit. They are the ones who helped create it. Or stood by as Congress ran amok creating it. Those stars were replaced by lesser lights, who vanished into the woodwork.
Since Porkulus, we have seen few or zero major policy changes from the president or Congress.
People point fingers over this. They say Obama wouldn’t cave and allow big tax cuts. Or the Republicans blocked further stimulus. And all that garbage. Let’s not get into that today.
I wish to make a simple point. Washington has done sweet little to stimulate the economy for over four years. And finally, finally, it is growing. Not vibrantly. Not dynamically. It is growing in weak tea fashion. And on some fronts but not others.
Recently, President Obama claimed every economic indicator shows improvement. Well, during election campaigns, politicians get carried away. With that claim, he did. And he left himself open to responses like, “After six years isn’t it about time?”
What I am suggesting is that there is a disconnect here. The recovery seems to be slowly strengthening. With maybe no help from Washington. Now some will argue that Porkulus did work. That this modest recovery sprouted from Porkulus. But that argument sports a lot of holes.
The situation reminds me of stories from James Herriot. He was the Yorkshire veterinary who wrote “All Creatures Great and Small” and other books about his years as a vet. He wrote that often he ran out of ideas or remedies for curing very sick animals. He would inject them with strong drugs to put them into deep sleep, so they could die without further struggle.
Sometimes the opposite happened. Against the odds, they recovered. He concluded that in some situations it was best to do nothing more. He got out of the way and allowed nature to work.
I wonder if maybe that is what has happened to our economy. After Porkulus, Washington did little for it. Not because the politicians didn’t want to. But because their shortcomings kept them from acting. Without intending to, they allowed natural forces to slowly breathe life into the comatose economy.
We may get more such inaction. The new Congress is likely going to be less friendly to the president. If he does manage to put forward new economic policies, they will probably get a chilly reception in both houses.
Of course, he could do a turnabout. He could offer big changes in tax policies. He could offer big cuts in the regulations that smother the economy. Such measures would unclog a few arteries in the economy. He could offer to reform welfare. That would lessen the burden on taxpayers. He could offer to reform Social Security.
That would act as a stimulus in several ways.
Faced with an unfriendly new Congress, Obama could do the horse-swapping and arm-twisting these moves would require. But that would be a first for him. Don’t hold your breath for it.
A more likely scenario is noise, but no new economic policies for the rest of his term. President Obama is in a weak position. His economic-policy advisers seem minor league. Democrats are abandoning him. They fear being tarnished by his unpopularity. Such ingredients don’t usually make up a recipe for big policy changes.
It seems to me there is a good chance Washington won’t mess with the economy for a few more years. That might be a good thing.
From Tom...as in Morgan.
Tom Morgan writes about political, financial, and other subjects from his home near Oneonta, in addition to his radio shows and TV show. For more information about him, visit his website at www.tomasinmorgan.com