Those of you who have read yesterday’s article (“Bill Clinton: Economic policy genius or just lucky?”) may be saying to yourself, “Okay, he may not have created millions of jobs, but at least he balanced the budget!” Sorry to disappoint you, again. He never did, but he came close.
I don’t know about you, but I’m soooo tired of hearing the President Obama and other Democrats boast about how many zillions of jobs Bill Clinton created when he was President. Give me a break. The man was anything but God’s gift to the Presidency. Bill Clinton just happened to be in the right place at the right time.
Ever wonder how it’s possible that stimulus spending has created so many jobs, and yet unemployment seems stuck above 8%? There are many reasons, of course, but one of the more obvious is that the President is overstating the number of jobs he claims to have created or saved.
The nerve of me. I’m nobody, and yet here I am telling you that monetary and fiscal policies, the traditional versions of them, don’t work. I might as well be telling you that prayer may make you feel like you’re doing something, but it doesn’t really accomplish anything, that any sense that it does is just wishful thinking and, in any case, impossible to prove. It is, of course, a flawed analogy, used only to make a point. The difference is that prayer is a matter of belief, while the efficacy of monetary and fiscal policy is science, social science, but science nonetheless. We don’t want elected officials who believe in the power of government. We want a President and legislators who understand the science of using government resources for the common good.
Fiscal policy is the use of government spending and taxation to influence the economy. Increases in government spending can create jobs that are needed to produce the goods and services the government buys, and then some through what are called “multiplier effects.” Reducing tax rates, to businesses and people, gives them more disposable income to spend. The more goods and services they buy, the more people that will be needed to make those things. That’s it in a nutshell.
Ben Bernanke, 14th Chairman of the Federal Reserve
Thursday, August 9, 2012
The really great thing about writing your own blog is the boldness of it, the way you can say things – talk about big, important ideas that other people, professional politicians in this case, and their advisors, have spent all matter of time thinking about – as if you really know what you’re talking about. I love it, and I do. …Actually, I’m nowhere nearly as confident as what I write sometimes sounds. My primary objective is to get our elected representatives and their challengers thinking, to open up their minds and focus on solving problems rather than just bickering about them. If I make some headway toward that end, then I did good and “The Next Contestant” wasn’t a waste of time.
Candidates for Congress and the Presidency, both incumbents and challengers, tend to talk in generalities. “We need more jobs!!” Really? “If only we could ask the rich to pay a little more,” or from the other side of the aisle, “A recession is no time to increase anyone’s taxes!” Unbelievable, isn’t it. Even when they elaborate in their position statements, the points they make are more likely to be superficial than identify the specific economic tools they recommend and explain precisely how those tools should be applied.