Ask this question of an economist and he will begin to spell out all kinds of formulae used in either Macro or Micro economics. Believe it or not, these two sectors of economics do have numbers of formulas which apply solely to one or the other and a select few which are used in both. That about exhausts my memory of my ECON 202 and 102 courses I took longer ago than I care to admit. As for what these formulae are, I can fortunately claim not to remember a single one of them and do not feel the slightest remorse for having apparently wasted my time on required elective credits. Looking back on life and what courses were required is another of the mysteries of life, especially since they had changed by the time my children entered college. Apparently required knowledge is flexible entity dependent upon when and where you attain said knowledge. But if we were to ask if there is some magic economic formula that will spur the recovery and speed up the creations of jobs, we are not asking for anything learned in a basic economic course, we are looking for a political answer which is often completely dependent upon your political outlook. As we have seen in fairly recent history, a conservative believes the formula is to remove regulations and free up as many options as possible for what they call the entrepreneurial class while a progressive will call for government to spend stimulus money in selected areas to spur growth which will repay on the investment through increased tax collections. They didn’t exactly teach this in the economics classes I took, at least as far as I remember.
The importance of this particular question is directly related to the choices we will be making in the November elections, both for the Presidency, our Senators and our Representatives. The two parties offer two competing and opposite approaches to the economy. Oddly enough, I have an even simpler idea which would likely have a better result than either Romney or Obama will offer. We have been told that Romney has this legacy of great business sense. The truth is that Romney has been able to choose companies which with a measured infusion of capital and a set of adjustments made, most often to either management or procedural, and the company would turn around. Sometimes it was as simple as modernizing the equipment, other times the overhaul might have required changing personnel or business models. President Obama has already shown his business outlook and it has been defined as quantitative easing and stimulus plans. The stimulus plans are of the Progressive nature where government spending will result in an improved economic outlook as business spend the stimulus monies and this leads to a more active economy. Of course, this also depends on where one invests the stimulus monies. Apparently, stimulating the green industries, two of the three major car makers, Wall Street investors, failing banks, and ecology enterprises were the wrong choices. That aside, we know that President Obama will likely continue with the same model and hopefully, should he be reelected, let’s pray he chooses better in his next term.
Well, now for what may be the most preposterous plan to save the American economy and get things moving in a positive direction you will likely hear this campaign cycle. If any politicians were to make this their plan, they would get my vote, but fear not, nobody would ever recommend this. The promise is to do nothing, allow nothing, change nothing, and leave everything exactly as it is for the foreseeable future. The biggest problem we have in the economy at the moment is not sufficient stimulus monies available; Lord knows we have made more than sufficient available. Currently, the government is putting out as many as a thousand new regulations per month. This rate is without the full implementation of Obama Care which commands that the Secretary of the Department of Health and Human Services fill out the regulations necessary to enact the desired ends of the legislation. This is also before the 2,300-page Dodd-Frank finance industry regulation legislation which directs the regulation writing to the Treasury Department bureaucrats. This is the real problem facing the economy as well as many other things in our lives, endless, uncountable, confusing and unenforceable collection of regulations. If a President could declare a hiatus from new regulations and bring the regulation factory that are the alphabet soup of extra-Constitutional cabinet departments to a screeching halt, businesses and investors would have a known field of play with stable conditions for that period of time. We do not need more investment. We do not necessarily need to undo any number of regulations, though that would not hurt. We do not need to play artificially with the interest rates. We need nothing. Simply nothing. That’s my plan, have the government take a nice long holiday, we’ll even keep paying them. Paying them not to do anything could be looked at as paying them to do no more harm. Just let everybody catch up with all the garbage that has already been enacted and regulated before loading up even more crushing our incentive to be productive. Nothing, what a concept.
Beyond the Cusp