In a recent Wall Street Journal editorial, Robert B. Reich, the vertically challenged former Secretary of Labor under Clinton, explained Obamanomics. First, a couple of key pieces of understanding about Mr. Reich. It has been suggested by more than a few that Mr. Reich was very instrumental in the housing bubble. Second, he is professor of public policy at the University of California, Berkeley. I won’t abuse you with the whole article. Mr. Reich could be Mr. Obama’s speechwriter, since he used a few hundred words when a few dozen would have covered his key points.
Here’s the key point. You need to know the extent of government spending needed to offset the continued reluctance of consumers and businesses to spend. Doesn’t that have a ring to it? He contends that if government doesn’t spend enough to get jobs back future deficits will be larger because tax revenues will be lower and government will be spending more on unemployment.
Next, he points out the big social security and Medicare problems coming down the road. His solution: a bipartisan congressional commission that just looks at these two areas. But, no points about why you would be adding to that problem with more entitlements now. Just, points out the debt to GDP ratio will be 77% by 2020. He says at that rate the dollar could tank and interest rates explode.
His third point addresses the “rag tag collection of tea partiers”, furious at establishment Republicans, left-wing Democrats angry at what they consider lily-livered Democrats in Washington, and independents disgusted with everybody inside the Beltway. But, like the issue with social security and medicare, Mr. Reich offers no solutions to the “mad as hellers’ he described above.
So here’s what Reich offered Mr. Obama. You must keep spending as you have been doing. It’s your job and the government’s job to offset consumer savings. But, if you keep spending and don’t find solutions from the train wreck coming at us with baby boomers moving to social security and Medicare, we will be in deep trouble by 2020. And, if you keep spending, as I maintain you must do, you risk losing political capital from t he “mad-as-hellers” who despise your spending.
Obama obviously listens to the Robert Reich types. He is doing exactly what Mr. Reich recommends. Trying to offset the loss of consumer spending with government spending. Supposedly, this will create jobs. If jobs get created consumer spending will pick up and government spending can drop down. But, with the first $880 billion(Stimulus Bill), no jobs got created. What do we do now, Mr. Reich? We drove up the deficit and added fuel to the fire of the mad-as-hellers.
No, we will keep spending. It’s always been the left-wing liberal economic program. Jimmy Carter did it and we had 22% interest rates and unemployment. Everyone bought gold then too. Jimmy was a one-termer. But, Barack, for all his supposed smarts, listens to the Reich’s of the world. It defies logic, but is some secret credo the flaming liberals swear an oath to.
Now, we all understand it, thanks to Professor Reich.
