Nothing has been bothering me more than the constant claim by pundits and, dare I say, economists, that when it comes to stimulating economic growth and getting the unemployment rate down there is nothing left to try. Or as one business economist said recently, there are no more levers to pull. The idea is that both fiscal (the stimulus package) and monetary (the various QEs) policy have been tried and neither have worked. What really is being said is that from a Keynesian perspective the government has tried all the textbook remedies. So for those who know nothing but Keynesian economics their tool box is empty. But the fact is that their tool box has always been empty in the sense that there has never been anything in it that has had any chance at all of getting the economy on a path of true economic growth. In reality there are any number of things that could be done to “get the economy back on track” (and expression I just can’t stand by the way). The problem isn’t that there is nothing left to try, it’s that that there is nothing left but policies that this president has no willingness to try. Here’s just a few: repeal Obama Care, reverse the EPA ruling on CO2, reverse ozone standards to those put in place in 2007 (these were standards that almost the entire country was coming into compliance with), abolish the corporate income tax, the capital gains tax, and the death tax, and make the marginal tax rates under Bush permanent. None of these are radical proposal but if they were done the economy would turn around on a dime. But like I said, it is not about being out of things to try. It is about being out of things to try that are consistent with Obama’s progressive agenda. If the choice is between having a prosperous, employed citizenery and continuing a progressive/left wing social agenda, which it is, this Administration will choose the latter every time.
by Dr. Roy Cordato
Senior Economist Emeritus