Blog Credo

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.

H.L. Mencken

Friday, December 5, 2014

Who Will Stop Obama's Job-Killing Agenda?

I have a theory, backed up by nothing beyond a general sense of history, that the economy of the last 50 years is pretty much tied to energy costs.  When energy costs are high - the '70s, the last ten years or so - then the economy suffers.  When energy costs fall - the '80s and late '90s - the economy grows.

This is basically saying that taking large amounts of consumer dollars (perhaps better understood as "demand") and effectively lighting them on fire in order to power things is a really shitty way to expend a limited amount of demand-power.

It's a correlation with a tenuous theory attached to it, I know, but I like it.

The US has been outperforming Europe and Japan since 2008.  This is partly because both the Democrats from 2008-2011 and the Federal Reserve have pursued an expansionary fiscal and monetary policy.  Japan is in a liquidity trap (among other things) and Europe has foolishly pursued austerity (thanks, Germany!).

But if the forecasts are right that US growth will start to slow because the rest of the world is still sluggish, we could see the rest of the world perk up as energy prices fall.

This could create a nice economic condition leading into 2016.

Obviously, this is a recognition that Presidents and even Congress have limited abilities to effect the economy.  This is especially true in the era of divided and combative governance.

But if Obama gets slagged for things that aren't his fault, perhaps he should get credit for things he didn't really do.  (Although you can argue that his decision to anger environmentalists by allowing the shale oil gas revolution is important.)

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