The common wisdom among the punditocracy is that the Federal Reserve’s announcement of its new, open-ended bond-buying program will provide a big boost to President Obama’s reelection by juicing the stock market and economy.Actually, however, the Fed’s monetary move could give a huge messaging boost to Mitt Romney if his campaign plays it right.
Imagine this speech by the Republican nominee:
President Obama and his fellow Democrats spent their convention down in Charlotte trying to persuade voters that the U.S. economy is on the right track, that the president’s policies are working, that no president could have done a better job with the mess he inherited, that all that could be done has been done by this administration, that we must stay the course.
But yesterday, Federal Reserve Chairman Ben Bernanke finally admitted what most folks outside Washington already knew: The economy, three years into a supposed recovery, remains in terrible shape and is unlikely to get much better anytime soon.
In fact, Bernanke said there’s such little hope for improvement that he and the Fed are going to embark on a radical new experiment in money printing in order to try and do something, anything, to boost growth and create jobs.
In short, the Fed chairman’s move clearly suggested Obamanomics isn’t working today and is unlikely to work any better tomorrow. We cannot stay the course. And since Washington won’t act, he will.
But let’s take a step back for a second and recall how we got here.
In late 2007, a collapsed housing bubble helped push America into its worst economic downturn since the Great Depression. Millions lost their jobs; millions more saw their savings disappear and salaries cut.
Now, the Great Recession officially ended more than three years ago in the summer of 2009 — at least that’s what the economists who get to decide such things tell us.
So for the past three years, we have officially been in an economic recovery. But although the economy has been growing rather than shrinking, by almost all other measures we’re still in a bad recession. Incomes are lower today than they were when the supposed recovery started. In fact, incomes have fallen faster during the recovery than during the recession itself.
And although the economy has slowly been adding jobs, the pace has been so miserably slow that unemployment has been stuck above 8% for 43 straight months, which hasn’t happened since the 1930s.
And if government number counters quit ignoring all those discouraged Americans who want a job but have given up looking, the unemployment rate would be over 11%.
For American workers, the Great Recession never ended.
Now, all those numbers I just mentioned? You didn’t hear any of them at the Democrats’ big party down in Charlotte — not from Barack Obama or Joe Biden or Bill Clinton. They also forget to mention that the president’s own economists said his policies, including the stimulus, would result in an unemployment rate this year of below 6%, not above 8%. And those same economists said the economy would be booming right now, growing at more than 4%. Instead it is growing at less than 2% — so slowly in fact, that if anything goes wrong, we’ll be right back in an official recession.
By Obama’s own standards, Obamanomics has failed. After wasting four years of precious time implementing policies that have never worked in the past, the American economy remains broken. I know it, you know it, Ben Bernanke knows it. Maybe, deep down, even President Obama knows it.
My fellow Americans, trillion dollar deficits and Fed money printing is no way to rebuild the American economy. After all, too much debt and too much cheap money is how we got into this mess in the first place.
So I propose a different way. First, we should look at what’s worked in the past.
Like JFK and Ronald Reagan, we should cut tax rates on business and entrepreneurs and small business and the middle class. And like Bill Clinton, we should reduce government spending. Cutting taxes and reducing spending will shift more resources back into the private sector where they can be used more productively than by Washington.
Second, we should look at what hasn’t worked in the past and stop doing that. Crony capitalism doesn’t work, whether it’s subsidies for pet presidential projects like Solyndra or for Obama campaign contributors like big banks. So as president, I will reform the tax code so that it promotes economic growth, not special favours and loopholes.
Well, Team Romney can finish the rest if it wants. This is still a close presidential race and winnable for the Republicans. But they need to seize opportunities like this one when they come along. Time is running out.
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