This week’s economic news—today’s jobless numbers and the 280 point drop in the Dow on Wednesday, accompanied by dismal home sales, rising prices, and waning consumer confidence—certainly explain why a majority of the country thinks we remain on the wrong track as a nation. The tsunami, earthquake, and nuclear meltdown in Japan are continuing to affect our economy. The Middle East seems to be in more turmoil every day, and our troops remain in two foreign wars. Manufacturing growth is slumping, and job creation is weak. There’s a bad psychological effect every time we hear about another depressing economic downturn, just as there is every time we learn about more death and destruction from tornadoes in Alabama, Missouri, and Massachusetts, and rising floodwaters throughout the Midwest and South. Surely when lives are lost, businesses are destroyed, and families lose everything they own because of natural disasters, that affects unemployment, housing prices, and consumer spending. And certainly it would change your perspective about being on the right track.
If you believe, as I do, that life is a test, then we are certainly being tested now. The biggest test of all lies in how we move forward and get back on our feet. With more stimulus spending by the government? Most observers would agree that continued government borrowing will only make things worse, that the administration’s past reliance on bailout after bailout won’t work anymore. Yesterday, Richard Fisher, the head of the Federal Reserve in Dallas, said this about pumping more money into the economy: “One would be very hard pressed to argue that we need to provide more. The Fed has done its job.” If the economy needs additional stimulus, he added, “it is going to have to come from someplace else.” There is no someplace else.
A consensus is growing that President Obama’s economic policies are not getting us out of this mess, and never will. Lawrence Kudlow explained what Obama’s policies have done to voters: “Big-government stimulus never works ... All that money-printing stimulus worked to depreciate the dollar and jack-up commodity prices, especially oil and gasoline, but also food. So both companies and consumers have been punished.” Peggy Noonan went even further in her column today: “Obama inherited financial collapse, deficits, and debt. He inherited a broken political culture. These things weren't his fault. But through his decisions, he made them all worse.” She’s right. It does feel like he’s making things worse. Everywhere else in the country, we hear inspiring stories of people coming together to recover and rebuild their communities—from Tucson to Tuscaloosa. But not in Washington. There’s only fighting and gridlock, and it’s making us all think the system is broken. President Obama doesn’t seem to be helping things at all. [Check out a roundup of political cartoons on gas prices.]
This week’s bad economic news probably helps GOP candidates like Mitt Romney, who yesterday announced his candidacy and highlighted his past as a “turnaround specialist” who can fix the economy, and Herman Cain, a Main Street businessman who knows a thing or two about meeting a payroll. And it probably raises the bar for social conservatives who are short on private-sector economic experience, such as Sarah Palin and Mike Huckabee. A candidate who can put forth common-sense solutions that help businesses and families recover, and help our nation come together and make a fresh start, would get a lot of support. I think the reason we have a different frontrunner every week is because there are just too many things to worry about right now for most families. We all know someone touched by a disaster lately.
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