Chart from Jim Pethokoukis of AEI.
America faces an unprecedented debt crisis, true. What is not conventional wisdom is that America could face renewed, even unprecedented, greatness if a decent leader comes forward.
Given that the Republican party seems incapable of getting its collective crap together, that scenario seems unlikely, though.
Businesses are, at this point, forcing themselves to not grow. They are unwilling to take on more risk. They’re keeping cash on hand. They’re paying down debt. They’re waiting.
Individuals are doing the same. Part of it is that they don’t qualify for credit even if they wanted it. Part of it is that they don’t want it.
Still, this unrealized creation and growth waits for the right catalyst.
Obama, is not a catalyst. Quite the contrary, he’s an inhibitor. Hell, he antagonizes any growth potential.
Obama’s actions are so frustrating to expansion that even apathetic business people are paying attention. Usually business folks lobby hard for their interests–they win some, they lose some and they work around the bureaucracy and incorporate the rules and regulations and taxes and fees into the cost of doing business. Not so now. Everyone can thank Obama for being so persecutorial rhetorically and prosecutorial policy-wise, businesses are being put out of business. That’s attention-getting.
The business world is now in open rebellion. Screw you, Obama, we’ll just not spend any money, period. Zilch. The cozy win-win we had going on is over. Sure, we’ll throw some money at you on the outside chance you get re-elected–we don’t want to be the subject of your direct ire. Instead, we’ll do just enough to get by everywhere.
A couple things about this:
America should never be so beholden to the executive branch that one person can do so much damage to the economy. And yet, here we are, and business is mostly to blame. By lobbying tirelessly for the government’s favor and selling their souls (Walmart and the AARP’s obsequious deference on Obamacare comes to mind) to obtain that favor, business leaders find out [surprise!] that’s what’s given can be taken away. Obama has been busily taking away or threatening to do so.
Businesses can afford to lobby the government, but the individual has been marginalized. Businesses were totally fine with that so long as individuals could still afford to buy their wares. Nothing like a long, deep recession to drive home the point that poor people don’t buy stuff.
So, while the cozy relationship benefits businesses for a while, eventually, people have to be forced to buy stuff and people resist being forced to buy stuff (see also really expensive light bulbs). So they just stop buying stuff they don’t want (see also solar panels and the Chevy volt.) And those businesses, warmed by the loving embrace of government tax breaks, bailouts and inducements find themselves screwed. No one wants expensive, useless crap. It’s bad enough when it’s cheap. But the stuff the government touches gets very expensive.
So the individual revolts, too. He stops buying. And if the government creates perverse economic incentives long enough, he loses his job and can’t buy stuff.
And that’s where were at in America.
America is profoundly in debt. America is jobless. America is sitting on the capital it does have.
Obama is making everything worse.
And yet, America is primed for some success–if the GOP can muster something. A steady hand, reduced government interference, positive rhetoric, assurances that businesses aren’t going to be raked over the coals (or given an unfair advantage either), etc.
In a word: growth.
That requires political change and a person willing to articulate a sunny, hopeful message to encourage growth but willing to make some tough decisions–i.e. cut government spending.
More on why this is not likely to happen in the next post.