“What we’ve got here is . . . failure to communicate.”
—Strother Martin as The Captain in Cool Hand Luke
Friday’s “reassuring” jobs report showed a better-than-expected growth of 117,000 jobs in July. Don’t you feel better?
Meanwhile, stocks plunged all week following the debt ceiling deal that pushed U.S. federal debt to over 100% of GDP, with no meaningful end to the spending in sight. And yet the Left still doesn’t get it.
In an Associated Press piece published in Saturday’s Houston Chronicle, Daniel Wagner and Stan Chloe helpfully explain that, “Investors also worry that the U.S. government is more likely to hurt the economy than help it.” Amen to THAT, Brothers. But having so nicely gotten to the core of it, in their very next sentence they veer off the Leftist cliff: “Instead of more spending, the government is trying to reduce its budget deficits by spending less.”
Oh, the horrors.
They continue: “In the U.S., few believe the government is likely to stimulate the economy through spending, as it did with its $800 billion stimulus program in 2009.” What part of “the stimulus didn’t work” do these people not understand?
Recall that the stimulus was supposed to prevent unemployment from ever getting above 8%. Yet, even with Friday’s jobs report, unemployment remained at 9.1%. And while that’s nominally an improvement from the previous 9.2%, at least some of that numerical improvement is due to the fact that approximately 190,000 people simply gave up and left the workforce. All three major market indices are showing huge corrections. All of this information (notably without the specific figure on the drop in the workforce, which is conveniently reduced to the vague “some”) was included in the article, so presumably the authors were aware of it. And still they draw the conclusion that the government is more likely to hurt the economy than help it because the government hasn’t and won’t do enough stimulus spending.
I suppose I shouldn’t be surprised at this kind of analysis from the liberal media. What is startling about Saturday’s AP article, though, is that the expert quotes they include as the support for their conclusion tell a very different tale:
Randy Warren, chief investment officer at the investment company Warren Financial Service, said markets were jittery over how leaders in the U.S. reacted to the debt crisis here and how leaders in Europe have reacted to the growing debt problems there.
“The fear was that they had no plan to deal with the situation,” Warren said.
“When investors took a step back and looked at the [debt] deal, it became clear that the long-term debt issues have yet to be resolved and that some hard decisions still need to be made,” said Bob Doll, chief equity strategist at BlackRock.
No mention of stimulus spending. None. Rather, the experts consulted for the article told them what should be painfully obvious: government leaders in the U.S. and Europe are failing to take meaningful steps to deal with the fact that they spend more than they have, and they owe more than they can repay. The only thing that has to do with stimulus spending is that the stimulus spending is a significant contributor to the problem. The markets took one look at the deal reached last week in the District and ran.
The fact is the stock market was climbing even as unemployment was flatlining above 9%, and even without an additional stimulus. It was only when it became clear that instead of dealing with spending and debt Congress was instead going to borrow even more that the markets went in the tank. And this is the very point both Warren and Doll were making. The markets will tell you what’s really going on, and it’s not about jobs and stimulus. No one wants to invest under current conditions—just ask the Chinese, whose official news agency over the weekend called on the U.S. to “cure its addition to debts,” and “live within its means.”
The message was reinforced late Friday when Standard & Poor’s downgraded U.S. government securities from AAA to AA+. In reporting on the downgrade, the New York Times reported that S&P and the other credit agencies had threatened to do just that unless the government acted to reduce federal debt by at least $4 trillion. When the government didn’t do that—Monday’s debt ceiling deal only calls for $900 billion in unidentified cuts over ten years, plus $1.5 trillion in cuts to be named later, again over ten years—S&P followed through on its pledge. Yet although S&P didn’t act during the debt ceiling debates, but only after the deal emerged that didn’t meaningfully deal with the debt situation, the Times nevertheless points to “political stalemate” as the root cause—undoubtedly intended as code for “Tea Party extremists.”
The pathology is predictable and tiresome. The liberal media looks at these facts and then like so many Pavlov’s dogs ignores them and reverts to drooling the Leftist agenda. Presumably, as Obama “pivots” to turn his laser-like focus once again on jobs, we’ll hear him calling for yet more stimulus spending, and conservative objections will be assaulted as holding the economy hostage in a blind adherence to ideology.
Who’s blind here?
In 2007 when Nancy Pelosi It dropped off the cliff in late 2008 and 2009 as Obama entered the Oval Office. During that same time, unemployment went from around 4.5% in late 2006 to upwards of 10%--all on the watch of the Left in both Congress and the White House. And all despite a trillion dollars in so-called “stimulus” spending in 2008 and 2009.
You know, my dog learns. Yet, even when you rub their nose in that steaming heap, the Left simply refuses to acknowledge the obvious truth. It's the spending, Stupid.