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By Jonathon Moseley
What policies will create jobs and a strong economy? As we face the November 6 election, are Democrats or Republicans better for jobs and economic opportunity?
Liberal Keynesian economics is in the DNA of the Democrat Party. Mitt Romney brilliantly labeled it “trickle down government.” Free enterprise and limited government are the heart and soul of the Republican Party. These two economic perspectives form the basis of the two political parties.
Barack Obama could win re-election after a disastrous four-year term simply because Democrats argue that Republicans will be worse. Their main theme is that George Bush destroyed the economy and Romney would repeat George Bush’s mistakes. It is entirely reasonable for voters to think the economy has been bad under Obama, but it might be too dangerous to risk repeating the 2008 economic crash.
Mitt Romney and Republicans urgently need to answer this. It is the most important question in the election and the most important issue on people’s minds. No matter how bad Obama has been, would Romney be worse?
Yet Democrats have Keynesian Economics in their blood. They “know” the country is dependent upon government and the economy grows from increased government spending. Franklin Roosevelt’s New Deal is the Holy Writ of Democrats. Eventually, Roosevelt’s Treasury Secretary Henry Morgantheau testified in Congress that massive government spending failed to improve the economy. Morgantheau conceded that Keynesian Economics doesn’t work. [See http://www.humanevents.com/2009/01/20/get-over-it-new-deal-didnt-do-the-job/ and http://blog.heritage.org/2009/01/14/were-spending-more-than-ever-and-it-doesnt-work/] Yet Democrats believe in it like a religion. Keynesian Economics fails because the government has no money to spend and must borrow it, sucking it out of the economy. [See http://curesocialism.blogspot.com/2010/06/government-cannot-stimulate-economy.html ]
So, Barack Obama promised that spending trillions of dollars borrowed from our children and grandchildren would bring unemployment down to 5%. I believe no one is more baffled than Barack Obama that spending trillions in government stimulus utterly failed to kick the economy into high gear. He really thought the economy would be humming by now. Obama is baffled that government spending in “green” energy companies has not sparked a thriving alternative energy industry. Democrats put Keynesian Economics to the test: It failed.
Obama wasted trillions of dollars of our money. It is like gambling the family’s mortgage money at the horse races — saying “Trust me. I’ve got a system.” Not only is the economy no better, but we are now trillions of dollars deeper in debt.
But the 2007-2008 crash had nothing to do with Republican economic policies that Mitt Romney would repeat.
First, this is uncomfortable, but it is a major factor: In September 2008, George Bush scared the living daylights out of the world markets in his clarion call speech. That is a mistake that Mitt Romney would not necessarily repeat in office and Republicans can easily avoid. When the President of the United States goes on national television and declares the economy is falling off a cliff, it sort of has an effect on the economy.
The tea party must put loyalty to the country ahead of loyalty to party or politician. So we may appreciate President Bush when he was right, but disagree when he was wrong. We need to tell it like it is, not spin.
Bush argued that the fiscal crisis was so severe it demanded emergency action. But the Bush Administration should have been paying more attention over the preceding years. Leading the economy from the White House requires a gentle touch and slow moves. Calmer action should have been implemented throughout the preceding year.
Second, Republicans tried to increase regulation on “Fannie Mae” and “Freddie Mac” to protect the stability of the mortgage industry. Yet Democrats are banking everything on their myth that Republican deregulation caused the economic collapse.
Democrats point to the repeal of the “Glass-Steagall Act..” The repeal of Glass-Steagall allowed mortgage lenders to diversify. The Glass-Steagall repeal did not cause the problem. It actually helped. Lenders that had multiple streams of income from many different sources had fewer economic problems than institutions dependent exclusively on mortgage income.
Third, uncertainty cripples the economy. Constantly changing laws and regulations damage employment and economic health. Businesses and their investors need to know what conditions will be for years into the future, as much as possible. Even bad laws and regulations are better than constantly-changing business conditions. Businesses stop and wait to see what’s going to happen and what the final rules will be.
Barack Obama’s revolutionary project of redesigning America creates massive uncertainty. I am working with several companies currently seeking investments. We have to show projections of what the companies’ income, expenses, and after-tax profits will be for the next 5, 10, 15, or 20 years. But the rules keep changing.
A utopian campaign to reshape all the rules is not a Republican policy that Romney would repeat if elected. Unfortunately, the Bush Administration sometimes caved in to big-government liberalism and made the same mistake. Democrats took over Congress in 2006.
Fourth, high energy prices dragged down the economy in 2007 and 2008. Romney will make increased energy supplies and lower prices a priority.
Fifth, Democrats allege that Republican budget cuts hurts the economy. They imagine that government spending drives the economy. But they ignore the poisonous and toxic effect of the borrowing required. And government spends money wastefully, based on politics. Again, Bush allowed big-spenders to get away with these errors, which is one of the reasons people later joined the tea party, not trusting either party.
Sixth, Democrats claim that Republican tax cuts caused the economic crash. This is a core question: Should government spend less or tax people more? Democrats want to fool gullible people into thinking that tax cuts for richer people increase how much taxes other people pay. There is no relationship between the two. Tax rates are set by a precise schedule.
Overall, none of these problems are Republican policies that Mitt Romney would repeat in the White House if elected President. But Republican campaign consultants are determined to run content-free campaigns which don’t answer the concerns of the American voters. Republican campaign professionals insist that it is clever to win by saying as little as possible, and hopefully nothing of substance.
None of these problems are Republican policies that Mitt Romney would repeat in the White House if elected President.
But Republican campaign consultants are determined to run content-free campaigns which don’t answer the concerns of the American voters. Republican campaign professionals imagine that being condescending and disrespectful to voters is a brilliant innovation. They insist that it is clever to win by saying as little as possible of any substance. I have sat in meetings wanting to scream as “experts” argue that the truth is too complicated or will raise too many questions.
If the tea party agrees on anything, it is putting the good of the country and our future ahead of political parties, political games, and business as usual in government. We should focus on what will benefit America for today and for our children and grandchildren.
The tea party erupted when citizens stopped trusting either of the major parties to govern for the good of the country. The people decided we have to do it ourselves. Temporarily, the tea party has been willing to take “yes” for an answer and give the GOP a second chance. The Republican Party at least pretended to repent of its political sins. The GOP uneasily embraced the tea party’s objectives after GOP moderate insiders initially mocked the tea party. But while Republican candidates offer the best hope for tea party goals, the tea party is not here to serve the GOP.
The tea party should have no hesitation about demanding clarity, openness and sincerity from both parties and demanding they put the best interests of our country ahead of political self-interest. The tea party should call ‘em like we see ‘em, encouraging more of what is good and trying to wean our politics away from what isn’t.