The WSJ in an editorial appearing in Friday's newspaper appears to be lobbying for no fiscal stimulus package, suggesting the Fed is best equipped to handle the current and developing fecal storm.
.... . But what we're getting instead from politicians and economists are legislatively challenging, economically questionable and politically motivated policies to address a potential problem best handled by the Federal Reserve.
There are five principal reasons why a politically motivated economic stimulus bill should not be enacted in the middle of the presidential primary season.
Folks, we are in for one long slide into oblivion. With no leadership in the WH, and with us/Dems licking our lips, seeing the November 2008 election potential, and the rethugs not wanting us/Dems to be able to take credit for anything, we may well see little if any help or leadership coming out of Washington with respect to the economic meltdown now underway. Further, if as suggested by the WSJ, the Fed is left to attempt to stem the oncoming onslaught of economic hard times, is there anyone out there that seriously believes more cheap money and continued and/or more American consumer debt is going to change the course of events? All I have read indicates America, both corporately, i.e., large banks, etc. and American consumers, have an insolvency problem, i.e., too much debt secured by assets of too little value, attempting to be repaid with too little cash flow.
Unless and until America begins discussing what got us here, what are our alternatives, and where will, or is, this taking us, any action by either the Fed or Congress, will at best be similar to a band-aid given to one suffering cancer or dementia. Too little to late and a questionable remedy for an unknown ailment.
God help us if Washington's ideas of the causes of and solutions to our pending economic problems are similar to the WSJ's, to wit:
To be sure, in December, job growth slowed and retail sales (excluding ever rising Internet sales) were weak. However, our labor markets are flexible and our economy is dynamic. As a result, there will always be workers in particular industries or in certain geographic pockets who are experiencing difficult times or "personal recessions."
Congress should explore public policy that will encourage those workers to find new jobs, acquire new skills or relocate to more prosperous locations. That too should be the focus of debate this year. Good public policy cannot be the result of a focus on micromanaging consumer demand to meet the objectives of the congressional and White House political calendar.
To suggest that America's economic downturn is in any way related to "workers in particular industries or in certain geographic pockets experiencing difficult times or personal recessions" is beyond belief. Where is the mention of the mortgage crisis or even the deficit exasperated by the war? Does no one at the WSJ know the state of wages and their stagnation over recent years?
To suggest Congress's best public policy alternative should be to "explore public policy that will encourage those workers to find new jobs, acquire new skills or relocate to more prosperous locations" is beyond ludicrous. Where are the bold, visionary ideas of American energy independence by 2020; repairing America's transportation and energy grid infrastructure, the development of alternative energy sources, investment in education, health care reform, etc. Although we all realize there has been an extended drought of vision and policy to help the the average main street American survive and prosper, with economic press like this, it is painfully apparent that our job of turning around America may well be more challenging than first thought.