Economic Surgery: Who Do We Trust With the Scalpel?
by Luke Kozikowski
Right now, the majority of U.S. citizens are bracing for 1929, but with the right team in Washington, we may not need to hang up our Robe de Styles and begin bootlegging moonshine just yet.
The “good news” about our problems is we aren’t alone. Despite today’s bump, the Euro is in bad shape and European shares are plunging. As the US and the EU take hits, oil exporters will take bigger ones. Russia is already smarting. In the next year, the export bubble will pop if U.S. consumers cut down on imports. China has so much invested in the dollar, inflation will leave them in the red (no pun intended). This isn’t just our problem, it’s a global one. In a sense, we’re heading back at zero. Oddly enough, this American-made crisis may hurt everyone else more than us. After the contraction is finished, we could see unprecedented growth at home and a shrinking of the trade gap, which, despite Republican assurances that it’s irrelevant, has reached terminal mass.
The “bad news” is Franklin Delano Roosevelt is dead. I know, I know. But hey, we’ve got two other guys to pick from: “crazy Uncle” John McCain and “that one,” er, I mean Barack Obama.
Bomb, Bomb, Bomb Iran?
Uncle John’s expansionist take on the Beach Boys’ classic seems in line with his approach to problem solving. “If it doesn’t work, blow it up.” There’s no guarantee McCain will invade anybody, but no one can doubt he’d be delighted with the chance. Recovery will require domestic focus and a realignment of military priorities. It’s interesting McCain complains about “American blood and treasure” going elsewhere, while stoking the flames of wars that would quicken the outflow.
Oil, Oil Everywhere
Drilling off the coast of Florida will not reverse peak production, which the United States hit in the 1970s. A recession should make oil cheaper, but until we find an alternative energy and fuel source, it will dog the dollar as it has for decades. Obama’s vision of an America surviving on renewable energy technologies, advanced transportation initiatives, and reinvigorated manufacturing sector is ambitious, but necessary. Obama sees this economic shakeup as a chance to get away from oil. Obama has been open about his tax plans, the projects he values, and has flat-out said, accomplishing certain projects will take time to turn profitable. Meanwhile, McCain muses abstractly about works projects without telling us what they will be or how we will pay for them. Are we to believe cutting a few programs and giving the rich a couple million to invest will free up the funds? I guess if it doesn’t work, we could invade another oil producer. Canada?
Remember when the Republicans were the party of balanced budgets and sound fiscal policy? I don’t either. Reagan “solved” a recession by jacking up military spending. G.W. Bush “solved” his problems by lowering interest rates to dangerous levels, eliminating oversight and invading a country. Bill Clinton solved a recession by pushing telecom growth. Even much-maligned Jimmy Carter actually had an economically fruitful presidency when you observe the numbers and he had the foresight to know energy independence should be priority number one. Now, we’ve got one candidate who openly admits to not understanding economics and the other who seems smart enough to do advanced calculus in his sleep. Right now, numbers are important.