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.

0 0 votes
Article Rating
Subscribe
Notify of
guest
4 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Sammy
Sammy
11 years ago

Isn’t it something?
Bush left this country in the worst shape it’s been in since the Great Depression and, lied us into a war of choice. Still, right wingers, who were hoping Obama would fail BEFORE he was even sworn in, choose to forget or even acknowledge just how Bush left this country.
Sadly, it seems they could care less.

Warrington Faust
Warrington Faust
11 years ago

Hiden in all of that is part of the key to a solution. Americans are saving 6.2% of earnings, that is a lot of money. Assuming that they are “saving” in the usual way, that vastly increases the pool of capital available. That means that in 3 years, 19% of America’s total payroll is available as capital. I think that is far more than the “stimulus” and it is not under government control. Meaning people will invest it where it will do them the most good, presumably that is “good” for the economy too.
Perhaps the idea of saving will catch on, it did in the last depression.

Warrington Faust
Warrington Faust
11 years ago

Sammy writes:
“Isn’t it something?
Bush left this country in the worst shape it’s been in since the Great Depression and, lied us into a war of choice. Still, right wingers, who were hoping Obama would fail BEFORE he was even sworn in, choose to forget or even acknowledge just how Bush left this country.
Sadly, it seems they could care less.”
What is omitted from this is any plan of the “Left Wingers” for a recovery. Oh, sorry, Bush’s plan was so pervasive it prevents any recovery. I should have realized that before I opened my mouth.
Posted by Sammy at August 16, 2010 12:15 PM

Tommy Cranston
Tommy Cranston
11 years ago

After less than 2 years America has remembered (or in the case of the younger generation learned) the Big 3 lessons of economics:
1. A socialist trickle-up economy doesn’t work.
2. See lesson #1
3. See lesson #2.

Show your support for Anchor Rising with a 25-cent-per-day subscription.