Friends in economy


By Jim Killebrew

[October 31, 2014]  It is interesting to watch the democrats implode during the last days of this mid-term election cycle. They look back over their play-book and discover they have very few things on which to run. Harry Reid has amassed hundreds of bills sent by the House of Representatives that he has simply sat on failing to bring them to the floor of the Senate even for a discussion, much less a vote. Then he turns around with the rest of the democrat pack and admonishes the republican House for being a "do-nothing" Congress.

The democrat talking points mostly consist of bashing the republicans rather than showcasing their achievements for the past six years. One would think they would bring their premier accomplishment of the Affordable Care Act, better known as Obamacare, out of the closet, brush it off and tout all of its achievements. Instead, they will hide the enormous cost increase in premiums and deductibles until after the November 4th election. We can count on having the taxes suppressed until at least November the 5th, the day after the election, or perhaps the day after any run-off elections.

In fact, we might anticipate several things occurring after the election is over. Hold on to your seat for dear life because you are in for a fast and furious ride. There will be initiatives to increase your taxes, the President will whip out his pen and phone and play like the Congress no longer exists as he signs into the nation's mainstream a flurry of Executive Orders that will stifle commerce, decrease national security, bring suits against those who are trying to enforce laws already on the books, legalize illegal immigrants, expand voting rights of non-citizens, put more restrictions on the military, mismanage one crisis after another, and continue to decrease America's standing in the world. Of course the post-election lame-duck Congress will try to protect every regulation, policy and law that the current Administration is responsible for on which it is hanging it's hat for some kind of legacy. And before we know it the 2016 Presidential election will begin with a full array of republican hopefuls and the solidification of the heir-apparent for the democrat party, Hillary Clinton.
 

Okay, Hillary Clinton is already campaigning; she was campaigning for Martha Coakley last Friday in Massachusetts where Coakley is running for the Governor's Office. Keep in mind that Hillary is the likely democrat candidate for President for 2016. She demonstrated her lack of knowledge regarding the economy. In her speech she said, “Don’t let anybody tell you that it’s corporations and businesses that create jobs.” She continued, “You know that old theory, trickle-down economics. That has been tried, that has failed. It has failed rather spectacularly. One of the things my husband says when people say, ‘What did you bring to Washington?’ He says, ‘I brought arithmetic.’”

So what is it Hillary that creates jobs? Right! It is the GOVERNMENT! If we could just grow the government to such a large entity, we could produce more jobs than ever has been created by corporations and businesses. Notwithstanding Solyndra, the bailout of the auto industry and other government investments in the billions of dollars that have been losers for the taxpayer. Remember, however, the government does not produce any product or services; it simply takes taxes from everybody and redistributes to whomever it wishes. That is not job building.

Rather than solidifying her position in the economy, she systematically joined at the hip with the President with total agreement by linking her statement with his statement when he said, "You didn't build that." Of course not, from their perspective they are both proponents of the Keynesian economics.

"KEYNESIAN ECONOMICS" is based on the total spending (aggregate) throughout the entire economy. That total spending is regarded as having an effect on both output and inflation in the economy. This is especially true in a depression or a recession where economics is sluggish. John Maynard Keynes was a proponent of an increased government expenditure and lower taxes as a means of stimulating the demand for products and services which, in effect in his opinion, tended to pull the global economy out of a depression.

Keynesian economics created a concept that the highest economic performance could be achieved with a leveling effect on the economy by reducing the economic slumps, by having the government stimulate the economy in the aggregate to create demand through the focused policies and regulations serving as an intervention into the rise and fall of the economy. The "demand-side" in the Keynesian theory focuses on changing the economy over the short run. Consequently, so the theory goes, short-run stabilization creates a more stabilized economy in the long run as well.

Developed nations during the latter part of the depression of the 1930s and during the World War II period used the Keynesian thought to stimulate the economy. It continued on throughout the post-war period during the 1950s and 1960s. When the oil shortage and the attempt to become energy independent during the 1970s the influence of Keynesian economics began to wane. It came back in vogue with the election of the President along with the global financial crisis in 2008. The problem is the President failed to lower the taxes expected in the Keynesian model; instead he has increased taxes which always dampens the growth of the economy overall.

Therefore, no matter how hard Hillary tries to distance herself from the President and his Administration, as well as his economic policies, she has remained intricately woven into his policies and the ethos of his government. If she is elected in 2016 it will inexorably serve as Obama's third term.

[By JIM KILLEBREW]