CHURCHVILLE, VA—I’m tired of reading about the American economy’s “mysterious” non-recovery. The lack of recovery isn’t mysterious at all. The economy hates uncertainty, and Obama has introduced more economic uncertainty than we’ve had since Hoover and Roosevelt started violating the law of supply and demand 80 years ago.
Our present crisis was caused by federal policies demanding that banks make bad housing loans to people who couldn’t afford their mortgages. Fannie Mae and Freddie Mac’s $500 billion in mortgage losses still haven’t been added to federal red ink totals—and both are still out there incurring more losses. Consequently we don’t know what a house is worth, now or tomorrow.
Obama doubled the uncertainty about Bush’s costly Troubled Assets Relief Program—spending nearly a billion dollars in big-city Democrat “stimulus” gifts that didn’t create any real jobs. (Neither did Roosevelt’s “pump-priming” in the 1930s.) After TARP came the Democrats’ massive federal budget increase, sending our national debt into the stratosphere for at least a decade to come. How can we possibly pay for this without stealing investment from the private sector?
Since the stimulus failure and the soaring debt, Secretary of the Treasury Tim Geitner, keeps demanding still another massive stimulus, without even a clear idea where he’d target renewed debt-spending. Senator Harry Reid recently jumped on his bandwagon. Obama would sign whatever they could pass on the Hill.
Nobody understands Obamacare yet either—but it will impact one of the biggest and fastest-growing U.S. industries. The 1400 waivers granted so far make us wonder whether every existing private-sector health care program in the country will be dumped into the federal lap. The similar Massachusetts health-care program has ramped up government health-care costs without covering many more people or reducing emergency room visits.
Our President keeps touting the wonders of Green Jobs, but so far most of those have been created in China. Even companies he’s used as press-event backdrops have gone belly-up. Meanwhile, the global temperatures haven’t increased for the last 15 years. How long, O Lord, before we admit the climate future is uncertain—as it always has been?
Our Environmental Protection Agency’s new limits on coal-fired power plants are likely to boost U.S. electric bills sharply in 2014—as the first round of Obama’s promised emission cuts. He’s threatened coal companies with bankruptcy. Energy Secretary Chu said we needed gasoline prices as high as Europe’s—or about $8 per gallon—to prevent a global warming we aren’t getting. The Feds have now shut down coal and oil wherever they could, the better to get gas at least back above $4 a gallon.
What will electricity and gasoline cost five years from today? Those are very basic uncertainties. The public is ambivalent about giving up fossil fuels, but they already see it will be very expensive. British “energy poverty” will more than double, especially since we’re all supposed to keep slashing fossil fuel use until we reach zero.
People think Franklin Roosevelt “corrected” Hoover’s policies and ended the Depression. Wrong. Both Hoover and FDR were radicals. Hoover gave us tariff wars, government wage controls, an uncertain fiscal policy and big spending on “infrastructure.” Roosevelt drew praise for his constant “bold, persistent, experimentation.” Both gave us high tax increases, even bigger budget deficits—and more uncertainty. Job creation came at the price of the 2nd World War with its millions of deaths and the devastation of Europe.
Why would anyone investing today expect profits in America or Europe? China is a better bet—and more of the world’s investors are making that bet.
DENNIS T. AVERY, a senior fellow for the Hudson Institute in Washington, DC, is an environmental economist. He was formerly a senior analyst for the Department of State. He is co-author, with S. Fred Singer, of Unstoppable Global Warming Every 1500 Hundred Years, Readers may write him at PO Box 202, Churchville, VA 24421, email to firstname.lastname@example.org, or comment on http://www.cgfi.org.