White House Hopes for Economic Growth... But Won't Change It's Counterproductive Policies

Yeah, Well, Good Luck with that! The Irrational Policies coming from this administration couldn't be more wrong if they are truly attempting to promote an economic expansion, they would change them. The tried and true methods to promote economic growth don't include any of the following: tax hikes, a weak dollar, trade wars, additional regulatory burdens, increased energy costs or a takeover of the health-care industry.

Only a year ago Democrats were mouthing phrases denoting the sheer folly of raising taxes in a recession. Having passed their massive public spending free for all they called a stimulus, which I call the Mother of all things pork, and wasting a mountain of taxpayer dollars the results are in and are at best, unimpressive. It has resulted in the creation of a large number of bogus jobs but very few real ones, but has been fairly good at increasing the wages of public sector employees (people who are already employed)and building a few skate parks. Now their sensible tone along with any notion that fixing the economy was job one, is gone, having been thrown under the progressive bus, in favor of their standard class warfare vernacular, an ideology they are much more comfortable articulating. Once again they wrap themselves in the mantle of Public Savior, guarding the poor, the planet and the working men and women of America from evil capitalists and business owners everywhere. Righteous crusaders, who but for the lack of an extra trillion or so more tax dollars can make all of our wildest dreams come true.

It is the focus of their ire, Businesses and the rich whom I call capitalist (you know, the ones with capital)who will lead us out of this economic malaise or not. Whether the time is right for them to lead is dependent solely upon their own very rational assessment of the business climate going forward, and that outlook is not promising. The President and his advisers hope that brow beating bankers will lead to more business borrowing to expand output and create additional jobs. He acts as though CEO's will plow ahead, willy nilly, borrowing and investing no matter how many additional burdens he and his political allies on the hill ask them to bear.

As far as private sector job creation goes, the President has missed the point entirely, quite possibly because very few of his advisers know anything about the private sector, having never worked in it. So I'm going to let him in on the dirty little secret of job creation, one that those of us out here in the real world already know. Businesses borrow money only so that they can earn additional profits, jobs that are created are really incidental to their focus, which is to grow the bottom line. Many of the policies the President promotes serve only to diminish the ability of a business to earn a profit. No Profit! No Growth! No Jobs!

The Business world is totally different than the political world. Companies don't have to expand. Investors don't have to risk their capital. They only do so when the conditions in place enable them to forecast an increased profits. When CEO's look at projections showing a bottom line that is shrinking, their thoughts are not of expansion and job creation, but rather they work nonstop trying to rationalize their cost structures to insure profitability, enabling them to survive the downturn. Labor savings is at the top of the heap when it comes to cutting expenses.

The good news is that an accelerated recovery can get underway any time the administration wants, but it will require them to make that hard pivot they have been talking about. They need to turn away from raising taxes, encourage the production of our domestic energy resources and stabilize the value of the dollar.

Domestic drilling will directly create thousands of real jobs in US oil fields and have the added benefit of reducing energy prices, enabling a more robust economic recovery and the jobs that come along with it.The prospect of lower taxes and a stable dollar will renew the incentive for investors and their Capital who are clearly watching from the sidelines to get back into the game of providing the fuel for economic growth. The nightmare of a health care bill, which seeks to punish healthy people with higher premiums and younger folks with fines for being young needs, to be scrapped in order to promote an economic environment that is, if not Employer friendly, at least not hostile.

Obama's Golden Opportunities an Anchor for the Dollar A Parachute for Bernanke

President Obama has one opportunity born of this current economic crisis that he shouldn't waste; a crisis that could not have happened but for the mismanagement of monetary policy by the Fed and it's Chairman, Ben Bernanke. The President can right the fiasco that our modern day dalliance with a floating dollar has been. Now is the time to bring back the dollar's Golden anchor, and give Helicopter Ben his Golden Parachute.

Bernanke, like his predecessor at the FED Alan Greenspan, conducts monetary policy by feel and not according to any predictable standard. A “keep them guessing” approach to monetary policy, with it's gyrations in the FED funds rate and the swings it has produced in the dollars value, has been the cause of much of the economic misery that Americans have suffered over the nearly 40 years since Richard Nixon took the US off the gold standard in 1971. The latest fiasco, the housing market blow up and bust, could not have happened on a gold standard, nor would the future inflation that is already baked in the economic cake be a cause for concern.

The dollar's value hasn't always been an ethereal notion. The dollar was defined by Alexander Hamilton as a specific weight of gold in 1792. One ounce of gold was worth $20.67 from the time he initiated this standard until President Roosevelt's devaluation of the dollar in 1931, which changed its value to $35 dollars per ounce, a measurement which held until Nixon took the US off the gold standard in 1971. This protracted period of stable money, and the low interest rate environment it produced in combination with the other economic freedoms enshrined by the founders in our Constitution, are what enabled the US to become the world's economic Superpower.

With the loss of it's golden definition, the value of the dollar has plummeted. The $35 dollars that would have bought you an ounce of gold or a good men's suit in 1971 won't buy you a decent tie today. Today you would need to exchange nearly 1100 dollars for that same ounce of gold. One is hard pressed to see the benefits of our floating dollar!

Mr. Bernanke, who is proclaimed as the world's greatest student of the Great Depression, has taken all the wrong lessons from it. He, like most other Keynesian economists, believe a deflationary monetary policy was the cause of the Great Depression. As a result, he is pursuing a monetary policy designed to avoid a deflation at all cost. There is one very conspicuous problem with his approach. It is a misdiagnosis of both the cause of the Great Depression and our current recession, neither of which are deflationary contractions.

An email exchange that I've have read between Jude Wanniski and Bernanke from 2004 that has been made public clearly demonstrates Bernanke's complete lack of understanding of the stable money a gold standard produces. It is not feasible that he could lead the country back to the hard money policies that played a key part in making the US a safe haven for investors around the globe, enabling us to outpace the world in economic growth and the jobs that come along with it.

The folks who praise Bernanke for getting us past this financial meltdown miss the point that it was his mismanagement of the dollar that was at the very heart of the problem. By giving him the boot and restoring the dollar's golden link, the President will have removed the man who made this financial debacle possible and restored focus to the Fed whose primary mission is to maintain a stable dollar. Relieved of this impossibly conflicting mission of guarding the Dollar's value and keeping unemployment low, the Fed will once again be back to doing what it is supposed to do. Congress can then get busy providing sound fiscal policy and low tax rates, which in combination with the stable dollar, are the surest path to a robust economic expansion and the jobs it will create for Americans and the rest of the world.

Airline Security A Very Dangerous Oxymorn

All this talk about profiling is just a right-wing knee jerk reaction to the failure of one terrorist who tried to blow up his fellow passengers and couldn't pull it off. Had he accomplished his mission we would now all be celebrating with an Alah Akbarh shout out. Wait one minute, that's right, I'm not actually a terrorist, I'm just treated like one every time I fly. Pardon my confusion while I cancel the celebration.

The first problem with our passenger screening process is that it is run by a one size fits all Politically Correct to the bone government agency, which requires that no one get special treatment, and everyone get the same treatment, lest it offend some special interest group. Islamic Terrorists are threatening our lives, and the recent spectacle in Detroit has made it blatantly apparent that the government's real concern is being Politically Correct. How pathetic is that? Thoroughly searching everyone is not possible, and randomly picking people for enhanced security measures isn't working. That's why grandma gets frisked, but not the terrorist. The TSA is just busy going through the motions.

For an administration that is enamored with law enforcement, and apparently thinks that the Panty Bomber was a criminal (why else would you arrest him on criminal charges?) they should take a tip from the NYPD, who when summoned to the scene of a homicide don't question the dead guy. There is simply no need, he has been excluded because he doesn't fit the profile of the killer. He can't,because he's dead, and as such doesn't have much to say anyway. What the police will do is ask people questions to rule them out as suspects, something I've never been subjected to at the airport. The TSA employees that I've encountered do their best not to talk to you, other than to scold you for not putting your shampoo in a clear zip lock bag, or not emptying your pockets completely. Perhaps this is some kind of an advanced terrorist counter measure and I'm just not aware of it.

The second problem is that they are searching luggage and not screening people to determine if they are terrorists. Those in charge say that they must search everyone because finding the one terrorist among all of the passengers boarding planes each day is like searching for a needle in a haystack. I concede that it is a difficult task, one made more difficult by their lack of profiling, but if you are looking at every piece of hay in the stack you are never going to find the needle. You need to focus on the needle. Unless you are just trying to look busy, in which case a lot of people going through the motions will do the trick.

Necessitating that everyone be subjected to the same level of screening is ridiculous. A simple profile would eliminate as suspected terrorist 90% of the flying public, making a thorough screening of the remaining 10% no longer a daunting task, but a small chore. The reason profiling works is that when you put together an accurate threat assessment profile it tends to make the actions of the people you are looking for stand out from the rest of the crowd. You profile to eliminate suspects, greatly reducing the number of people that need to be searched. It's got nothing to do with racism. There, I said it. As a matter of fact, a blind man could have successfully profiled Omar.

These people never learn, which is why, after taking into account what had happened that day, the TSA implemented new rules to prevent further attacks. One of the new rules is that no one can leave their seat for the last hour of the flight. It's a good thing they had not instituted that rule until after the Flying Dutchman had thwarted the Isolated Jihadist on flight 253, or our hero might have waited patiently in his seat on his way to meeting his maker.