News & Analysis
Election 2012: When There's No 'There' There
This election, Obama is the wiser economic choice ... Even as our politicians disagree on a great deal, most experts can agree on the objectives of economic policy. The next president will not have succeeded in the economic area unless he accomplishes three things: 1. Reestablishing economic growth at a rate that makes real reductions in unemployment possible. 2. Placing the nation's finances on a stable foundation by putting in place measures to assure that U.S. sovereign debt is declining relative to America's wealth. 3. Renewing the economy's foundation in a way that can support steady growth in middle-class incomes over the next generation, along with work for all who want it. – Lawrence Summers/Reuters
Dominant Social Theme: Obama understands how government makes economy.
Free-Market Analysis: Lawrence Summers is offering up his usual recipe for a successful national economy. He seeks government involvement in all ways.
Nonetheless, from a perspective of dominant and sub-dominant social themes it is instructive to deconstruct Summers's arguments. They served the power elite well in the 20th century, though not so well in the 21st.
Who is Lawrence Summers? "He is the Charles W. Eliot University Professor at Harvard and former U.S. Treasury Secretary. He speaks and consults widely on economic and financial issues."
Given the level of success that Summers has achieved, the puerility of his thought is noteworthy. We can see that the three issues he highlights in his Reuters article are problems he expects Barack Obama's administration to grapple with, at least semi-successfully. Here's some more:
President Obama has recognized that the inadequacy of demand is the principal barrier to growth and has sought to bolster both public- and private-sector demand since becoming president.
Recent work by the IMF has confirmed the premise of his policies: namely, that at a time when short-term interest rates are at zero, fiscal policies are especially potent. The president has also respected the independence of the Federal Reserve as it has sought to respond creatively to the challenge of increasing demand even with short-term interest rates zeroed out.
And he has put the economy on track to nearly doubling exports over five years through a series of measures, such as increasing government support for exporters. He has made clear his commitment to taking advantage of current low interest rates to finance public investment and protect public-sector jobs, and to continue to promote US exports.
In contrast, Governor Romney supports immediate efforts to sharply reduce government spending even as economic slack remains and Congress—at the president's behest—has already legislated the most draconian domestic discretionary spending cuts in history.
Through some set of intellectual gymnastics, Mitt Romney concludes that a government purchasing a new weapon systems or the recipient of a tax cut buying luxury goods creates jobs, but spending on fixing schools and highways does not.
He also seems comfortable involving himself in monetary policy, favoring a reduction in the supply of credit relative to current Fed policy. And his insistence that he will name China a currency manipulator on his first day as president, even before his appointees have moved into their offices, surely increases uncertainty by making a trade war possible.
Where to start? Summers likes the idea of zero-percent interest rates. Presumably he doesn't have an aged mother or father with life insurance. Low interest rates are not just killing yields; they are destroying variable and whole-life instruments themselves.
Summers is pleased the president has supported "exporters," though he delicately skates over exactly what these exports are. We have a funny feeling many may be weapons-based.
The idea that Obama "respects the independence of the Fed" is also satisfying. Of course, this is the same Fed that may have printed and disseminated US$16 trillion in short-term loans in a very short period of time. Many of the loans may not have been repaid.
How on Earth did the US reach a place where a handful of men entirely dominate the money system and can print as much as they choose? These men fix the rate, price and volume of money – even though it is self-evident that price-fixing never works. Summers should know that elementary principle but it seems to elude him.
What bothers Summers is the idea that Romney wants to reduce government spending sharply. This actually is not true, as Romney is an ally of the trillion-dollar military-industrial complex that engorges itself on both tax dollars and debt.
But Summers doesn't seem to have met a problem government can't solve. Here he sums up the case for government action:
Governor Romney has not suggested even a partial approach to the budget that has enough detail for independent experts to fully evaluate ... He has spoken of "closing loopholes" without naming any specific items. And he's done so in the face of repeated demonstrations that even the elimination of every tax benefit for those with income over $200 thousand would raise far less than the totality of his proposals would cost.
From the Lewis and Clark expedition to the land-grant colleges to the transcontinental railroad to the interstate highway system to the original research and development that led to the Internet, the federal government—with leadership from both political parties—has always sought to lay a foundation for future prosperity. President Obama has continued this tradition, recognizing that in an uncertain world some investments will work out better than others.
While audits have found many fewer problems with public investments than most expected over the last few years, much has been accomplished. Major efforts to measure and act on student achievement results are now in place in most states. Medical records are being systematically computerized. Domestic fossil fuels and renewable energy sources are meeting more and more of our energy needs. New financial protections are in place for consumers even as the capital reserves required of financial institutions have been substantially increased and student lending has been streamlined. These steps illustrate the kinds of progress that a second Obama administration would strive towards.
What world does Dr. Summers live in? The US is some US$200 trillion in debt (all in), is embroiled in about five undeclared wars, has poisoned people with depleted uranium throughout the Middle East, has created such wild booms and busts via central banking that the dollar reserve system has basically foundered, putting millions out of work and shutting down large swaths of the private sector.
Obama has been laboriously trying to restart the economic engine of prosperity using the same bankrupt tools that Summers proposes. The idea that Summers suggests all this in face of widespread knowledge of the failure of these policies – and of what is generally called the United States – only illustrates the bankruptcy of elite memes.
Conclusion: There's no "there" there anymore. Nothing but recycled nostrums that offer no conviction and less cohesion. With the advent of the Internet, the old dominant social themes are dying and every day via elitists like Summers we are shown there is nothing to put in their place.
Posted by beaker55 on 11/03/12 02:38 PM
If you plan to cast a protest vote for Ron Paul or Gary Johnson, or if you have decided to not cast a vote next Tuesday... Please, PLEASE(!) watch Bill Whittles Firewall presentation to the end. Thank YOU!
Click to view link
Posted by Merridth80 on 11/02/12 10:28 AM
It infuriates me that you could publish anything soetoro"Says, reiterates or publishes in any way!
Any man who won't use his own name, release his history, educational, parental or economic, is hiding pretty big secrets. And no way is he going to tell the truth, to anyone or at anytime!!!
He has been duping the Stupid in America long enough.
I used to watch the Nightly News religiously! Not Now. Our Press is lieing for soetoro/ Whatever he calls himself.
Katie Couric did it for me, it was like she was having sex with him, openly on camera, Just Revolting, a time & place for everything, but not on Nightly News!!! All those that are his fan club shoud go with him.
But No one has mentioned the fact that He signed a contract with a Chinese Co. to count our Election votes, a company that soros now owns!
I Think That will be our November Surprise. What will America Do About That??????????
Posted by Libertarian Jerry on 11/02/12 09:26 AM
For the New World Order Globalists things are working out well. First,through Cultural Marxism,you destroy the culture of self reliance and self responsiblity and replace it with a culture of dependency. Next,you undermine and bankrupt the most successful economy in history with high taxes,large government employment,debauching and watering down of the currency,large unpayable debts, huge volumns of regulations and controls and a dependency class that overwelms the government gravy train.
Next you villify the successful and then propagandize the population by saying that the government can run everything. Eventually,if the Globalists win out,America will be wedded to a one world government run by these same Elitists. Finally,1000 years from now,when the historians write of the decline and fall of the American Empire,people like Mr.Summers,Mr.Obama and Click to view linkmney will be looked back upon as some of the useful idiots who helped facilitate that decline and fall. For the New World Odor a complete and total victory.
Posted by mava on 11/02/12 02:15 AM
What a joke. I don't know why would I care what either Summers or Obama says. Or Romney, for that matter. None of them are interested in America. What they are interested in is sustaining the status quo. This is exactly the same thing observed with a captain of a sinking ship who is frozen at the controls.
I know that no matter what, how or why, Obama or Romney, they will be interested first in taxing me, and it doesn't even matter if I even need the "services" they are "providing". You can take this to the bank.
Posted by Danny B on 11/02/12 12:31 AM
What do you do when you can't have a teleprompter?
Click to view link
Posted by William3 on 11/01/12 11:23 PM
"With the advent of the Internet, the old dominant social themes are dying and every day via elitists like Summers we are shown there is nothing to put in their place."
That's encouraging, DB! May this trend continue.
Posted by dave jr on 11/01/12 06:57 PM
1. Reestablishing economic growth at a rate that makes real reductions in unemployment possible.
Which will require a reduction of government.
2. Placing the nation's finances on a stable foundation by putting in place measures to assure that U.S. sovereign debt is declining relative to America's wealth.
Which will require a reduction of government.
3. Renewing the economy's foundation in a way that can support steady growth in middle-class incomes over the next generation, along with work for all who want it.
Which will require a reduction of government.
What is the chance that government will voluntarily give back power to the people, the markets, the REAL economy; that took so long to seize?
Good one Larry. I didn't laugh with you.
Posted by annmarie on 11/01/12 06:46 PM
The job of the president is to defend American citizens against enemies both foriegn and domestic.
The lies, the videos,and the murder of our American SEALS in bin ghazi is grounds for impeachment in my opinion. (Clinton was thus charged for sleeping w/an intern and lying about it) - why isn't Romney using his power as a candidate to get what happened in the face of ALL Americans? The MSM has not covered this story fully. The evidence IS there. Americans are patriotic. If they knew, the election would be over.
I think Romney is a decent human being. He can't fix everything, especially as Obama's regime has institutionalized much of its agenda. Romney may be a globalist, but I do think he's an American first. I think he will get us out of the Mid East, and not a moment too soon! There is not one country under Muslim rule that isn't a complete mess. Obama's Muslim "Outreach" scares me more than any of Larry Summmer's stats!