Wednesday, June 22, 2011
clueless Ben Bernanke what is "causing the current fragility in the U.S. economic recovery"...
It is because YOU'RE SCARING US!!!
Let's review the basics:
CHAPTER ONE: By definition, the economy grows only if/when businesses and consumers increase their spending. If they merely maintain their level of spending, the economy stagnates. And if they decrease their spending, the economy contracts.
CHAPTER TWO: People don't take risks when they're scared. Businesses don't add new employees when they're worried about the long-term demand for their products and services. Consumers don't increase their spending when they're worried about needing that cash in the event something bad happens (loss of job, loss of or reduction in available credit, higher taxes or medical costs, etc.).
All of the stuff and statistics Bernanke studies are merely symptoms of whether people are confident, cautious or worried. A decrease in home values? Indicative of a lack of buyer confidence in the supposed value of the house. A increase in layoffs? Indicative of business concerns that demand for their products and services is going to fall (thus not only requiring fewer people but also a need to cut expenses to conserve cash). A drop in car sales? Again, indicative of the car buying public deciding they'd rather not be spending a bunch of money on a new car. And so on and so on and so on.
And it is no secret, at least to me, why people are running scared.
People fear higher taxes (and not just those 'rich' folks Obama likes to talk about targeting). They fear that Bernanke's flood of cheap money is driving up the price of everything from gas to food to clothing. They fear Obama's anti-business agenda is going to make it more expensive and difficult to operate a business profitably. They fear that Obama's anti-oil animus is driving up the price of a gallon of gas (double what it was when Obama took office?). They fear that Obamacare is going to drive up their health care costs more than they would otherwise have gone up... and on top of not being able to keep the coverage they now have. They fear that Obama's huge spending is doing nothing but setting the groundwork for a huge economic collapse. They fear that wherever their kids are going to school, it is going to cost them more money (tuition, fees for playing sports, going on field trips and so on). They fear that Obama is playing favorites... and that they're not the ones he is picking to share the spoils with.
And while, no offense to the esteemed Mr. Bernanke, it doesn't take a rocket scientist to figure out why things aren't going so well right now, it doesn't take three advanced degrees to figure out how to improve the environment.
Americans are by nature an optimistic group of folks. Left to our own devices, we're the ones who are constantly looking for ways to improve our lives. We invent things that make life easier. We work harder to earn more money to buy stuff. We push to grow our businesses.
That is, unless somebody comes along and squeezes the optimism and enthusiasm out of us. Obama and his Democratic colleagues in Congress and the alphabet agencies have done just that (Question: have you ever seen an Administration that is as hostile to business managers and people who make nice incomes as is this one? I haven't.)
And they're seeing what happens as a result. Businesses aren't hiring, people aren't buying cars and houses, they're not spending their disposable income.
However... as I said, we're by nature a pretty optimistic group of people. All that is needed... and I mean that, all that is needed.... is for Obama to announce that he won't be seeking a second term.... and for Bernanke to announce, that in light of his not having a clue, he is resigning as head of the Federal Reserve... and the economy will start to take off. Give people a reason to be optimistic (even if that is based on little more than the belief that the future won't be as bad) and things will turn around.
Of course, since Obama and Bernanke are as clueless as can be, neither will do the right thing. So we're stuck. Until we see the light at the end of the tunnel.