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For the past few years, the political class has struggled and groped with ways to fix the economy, specifically, how to reduce the persistently unemployment rate: - The politicians tried Cash For Clunkers but that failed to stimulate the economy and reduce unemployment. - They tried Cash For Appliances but that failed. - They spent over $800 billion on an economic stimulus program but that failed. - They dropped interest rates to historical lows but that failed. - They launched a mortgage adjustment program for struggling homeowners but that failed. - They gave billions of taxpayer dollars away through the First Time Home Owners Rebate program but that failed. - They gave billions of taxpayer dollars to mismanaged banks but that failed. - They passed a small business stimulus and tax package but that failed. - They watched the Federal Reserve Bank inflate the currency by hundreds of billions of dollars via quantitative easing but that failed. Put these facts aside for a second and consider some recent statements from prominent members of the political class: - In a recent Forbes interview, Federal Reserve Board President Ben Bernanke stated that he really had no clue why the economy had no responded to all of the failed actions by the Fed and the political class. - A few weeks ago Vice President declared that the economy was improving, just before a dismal jobs report found that only 54,000 jobs had been created in the past month and over half of them were for McDonalds jobs. - Nancy Pelosi declared a couple of years ago that 500 million Americans were losing their job each week, pretty impressive since there are fewer than 350 million people living in the United States. - Staying with Ms. Pelosi, she also declared that unemployment benefits are one of the absolute best ways to create jobs, leading to the logical conclusion that the more people who are unemployed and collecting unemployment checks the more jobs would be created. What happens when you put these two lists, failure and economic ignorance, together? You get the interview that President Obama recently did with an NBC Today Show interviewer. The President said that there were two reasons for the high levels of unemployment. The first reason is that the country is still digging out of a deep recession. The second reason why the economy is still sluggish on job creation? Let the President explain his insight on why he has been unable to bring down the unemployment rate: "There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don't go to a bank teller, or you go to the airport and you're using a kiosk instead of checking in at the gate." Why didn't we have this insight and deep economic knowledge BEFORE we wasted several years and trillions of dollars of taxpayer dollars? All we have to do is get rid of ATM machines and airport kiosks. Those silly businesses were trying to be more productive, what were they thinking? Isn't increasing productivity one of the key components to economic growth? Hasn't gains in productivity freed us from doing the most mundane tasks throughout history and allowed us to move onto to other, more important endeavors? If productivity had not increased during our economic history we would still making cars by hand, and not by robots, significantly increasing the cost. If productivity had not increased during our economic history we would still be standing in a bank line, and wasting time, at banks in order to get access to our money rather than using ATMs. If productivity had not increased during our economic history we would not be as efficient harvesting food, resulting in higher food costs and more widespread hunger. The list goes on and on, productivity makes our lives better, easier, and less expensive. Throughout history, the increase in productivity allowed workers to move onto other areas that further expanded the economy and the benefits to society. Now this President comes along and rather than celebrating progress and advancements, he blames it and ATMs for his economic inabilities to reduce unemployment. In his interview he states this as a root cause but then proposes no solutions. Does he want to outlaw ATM machines? Does he want to force businesses to be less productive? Should we outlaw computers and all go back to typewriters so that more people would have a job, no matter how boring that might be? Maybe the President wants us all to become ditch diggers, after all we would then all have jobs, as illustrated by a well known story involving renowned economist, Milton Friedman, that supposedly happened in one of his trips to China: Prof. Friedman visited China in the early 1960s and was taken by a government official to see a public works project. Chinese workers were building a canal. Friedman was struck by seeing everyone digging the canal with shovels. Friedman asked the official, "why no heavy earth-moving equipment?" The official said, "oh, this is a jobs program." So Friedman then says to the official, "then why don't you just give them spoons instead of shovels to create even more jobs?" The economic ignorance and arrogance of this Presidential administration, along with many, many members of the political class sitting in Congress, never ceases to amaze us. They have wasted TRILLIONS of dollars, unsuccessfully trying to boost the economy, and it is only afterwards, when we see the insanity portrayed in this interview, do we realize what fools we have been to trust these people to lead and grow the economy. We need to make serious changes to our political and educational process in order to revitalize and change out the people sitting in Congress and in the White House. These changes include: - Changing the financing mechanisms of election campaigns. - Instituting term limits for political office. - Requiring all new members of Congress take and pass a class on economic theory. - Hold politicians accountable for such travesties of spending TRILLIONS of dollars but getting no positive economic results. - Most importantly, improve our education system so that our kids can compete in a more productive world in the future. When you think that ATM machines and airport kiosks are the culprits in a dreadful economy, you really need to take up another line of work, one that does not require you to understand economics or the role of productivity gains in history and the economy and one that certainly does not put you in a position of leadership anywhere in this country.
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cash for clunkers, economic stimulus, atm machines, airport kiosks, obama, pelosi, bernanke,
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