The Way Out of the Recession
If an article by the Associated Press’s Jeannine Aversa is any indication, the road to economic recovery remains a mystery to mainstream journalists:
The Federal Reserve has little power left to lift the economy out of its rut. Congress, with an election looming, has no appetite for more stimulus. Shoppers are reluctant to spend, and businesses are slow to hire.
Let’s face it: There is no easy or imminent fix for the flagging recovery. …
Americans who are worried about their jobs, not to mention volatility in the stock market, don’t want to borrow. They saved 6.2 percent of their disposable income this spring. Before the recession, it was more like 1.2 percent. …
“It’s a pervasive level of uncertainty that people and businesses feel about their economic futures,” says Ken Mayland, president of ClearView Economics. “It’s frozen them into inactivity.”
The state of the economy is, of course, the leading cause of uncertainty, but the efforts of President Obama and his Democrat Congress to — in White House Chief of Staff Rahm Emanuel’s phrase — not “let the crisis go to waste” has put it over the top. The solution, therefore, is not more “stimulus” of the sort that we’ve been seeing, but a clear message from Washington that “our methods have failed, now it’s up to you in the private sector.”
In concert with a deep change of faces in Congress, Republicans and Democrats should pledge no “transformative” legislation until the economy is humming again. No cap and trade. No pro-union hand-outs. And a repeal of ObamaCare. They should also strive to give taxpayers as much of their money back as possible so that we can save to the level at which we’ll feel secure and then begin spending and investing.
Mystery only enters the equation when the objective is to maintain and expand a large, invasive government while persuading the public to behave as only folks confident that the economic rules are stable and that the ruling class will not govern by whim.