Another Failed Economic Goose

The Federal Reserve reached the bottom of its bag of tricks today when it announced it was going to extend the term of its short term debt in the hopes of driving down almost non-existent interest rates even lower. Here is a little secret fellows. Come closer and I will whisper it in your ear. IT WON’T MAKE ANY DIFFERENCE. Low interest rates are not the problem. The problem is nobody will loan money. Business is slowly grinding to a halt.

Obama’s incendiary speech on the debt and jobs this past week is the real problem. One can’t tell whether he doesn’t have a clue, a firm possibility, or completely understands and just doesn’t care, the more probable possibility. Until this guy is out of office, nothing will get better because nobody trusts him anymore. He is a liar, and will say anything to advance his ideological agenda of income redistribution, solving global warming (also income redistribution), and global government. That is his agenda. When one views increasing dependence on government control as a good thing, one could care less about unemployment and jobs and loans.  That is a minor price to pay to achieve the greater good.

His class warfare agenda is disturbing. I will leave for another column how much bunk the contents of his speech were…right on down to Warren Buffett’s secretary, the corporate jets, and everyone paying their fair share. When ½ of working Americans pay NO income tax, it’s a tough sell when criticizing those who pay all of the income tax for not paying more.

This past week, in a semi tongue in cheek article, the Chicago Tribune called on Obama to not seek a second term. Sounds like a plan to me. I keep writing that the American public does not understand just how much regulation is percolating around out there. Until it does, it will be fooled by Obama and his silver tongue over and over again. Look at what he does, not what he says. He may give lip service to allowing oil drilling in the gulf, but he has completely smothered it with more and more rigs moving to the coast of South America or Africa. He may say he ordered the EPA to relax “carbon emission” standards…but it is from a bunch of new ones that it was going to take effect. The net effect is an increase in these phony carbon standards already rejected by the Congress.

CNBC, the business NBC business channel, recently hired a new commentator who is also a columnist for the New York Times. Andrew Sorkin sat there with a perfectly straight face this morning and asked the Governor of Indiana what the government should do with people who make the wrong decisions. Sorkin said with a perfectly straight face that people can’t be trusted to make the right decisions and government has to be there to protect them. Oh boy!!!

The economy needs to be goosed, but not by monetary or fiscal policies. Both are bankrupt and ineffective and actually make things worse. Here I go again for the thirtieth time. Start an aggressive energy policy using ALL energy, including rapid development of American fossil fuel resources while planning for an orderly transition to other energy in 20 years. Muzzle and neuter the EPA. Get aggressive with countries that are manipulating currencies…like China. Plug the money leaks to China and OPEC. That is what we need to do to get this country moving again.

In the meantime, Ben Beranke and crew can do the interest rate shuffle ‘til the cows come home. As my grandmother used to say: “Save your breath for your soup.”