From Art Laffer’s letter to the editor in today’s WSJ:
It’s normal practice in business, professional football and politics that the leaders of a losing organization also lose their jobs, even when fault is nigh on impossible to prove. The Obama administration has obsessed on accountability, whether it’s TARP recipients paying bonuses, or the firing of GM’s CEO Rick Wagoner. It wants businesses and banks to be held accountable.
Applying accountability principles, there’s no way Chairman Bernanke should be reconfirmed by the Senate, let alone reappointed by the Obama administration. Over the past six years, during the U.S. economy’s biggest train wreck since the Great Depression, Ben Bernanke has been involved in policy at the highest levels. He was a member of the Federal Reserve Board and Alan Greenspan’s right-hand person from 2002 to June 2005. He then became chairman of President George W. Bush’s Council of Economic Advisors from June 2005 to January 2006, and finally Federal Reserve chairman from February 2006 to the present. He’s been at the helm from the very beginning of this Great Recession. That alone warrants a “no” vote on reconfirmation.
In addition, the Fed’s behavior over the past 15 months has put America on a very dangerous path. The Fed has increased the monetary base (high-powered or wholesale money) by the largest amount ever, from colonial times to the present, times 10. Without an exit strategy, inflation is a virtual certainty over the coming decade, while an effective exit strategy virtually assures a further weakening of the U.S. economy. Chairman Bernanke has put the U.S. economy in a lose/lose situation. So on substantive grounds he also should not be reconfirmed.
Well, yeah, but there’s no accountability in politics.
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He’s right, of course. But I don’t much care for Laffer because he’s such an opportunist. The man has no principles.
What were his opportunities?
This would be the same Art Laffer that laughed at Peter Schiff and insisted that our economy and monetary policy were spectacular, correct? Boy, has he changed his tune.
Opportunist, indeed.
Clip and save for the first time Laffer opposes the printing press!
Fortunately for us (in this case), wishy-washiness based on a lack of principles is exactly what one needs to have your opinion respected these days. We should count ourselves lucky that he happens to be correct in this instance.
Economic difficulties are very real, just look at the main economic factors. High unemployment with increased foreclosure rates, banks violating foreclosure laws, the middle-class is getting screwed every single day and it keeps shrinking. Middle class is the backbone of the American economy and the future of the United States. Nothing has been done, or to be more correct there are no real results that show us positive economic trends for the future… I don’t think it’s correct to try to estimate our economic well being with Dow Jones numbers, there are many more complex economic factors at play… What’s even worse is that the Fed has run out of tools to deal with the situation.
The Republicans have captured majority in the House but that does not guarantee the GOP automatic win in 2012. If the GOP won’t be able to deliver what it has promised, they will be in the same situation as Democrats today…and time is working against both parties, much needs to be done very soon, unfortunately for some politicians they’d rather spend their time for political infighting and other obscure reasons, rather than try to decrease unemployment and create real solutions for our economic woes.
Just look at these facts:
#1 Ten years ago, the United States was ranked number one in average wealth per adult. In 2010, the United States has fallen to seventh.
#2 The United States once had the highest proportion of young adults with post-secondary degrees in the world. Today, the U.S. has fallen to 12th.
#3 In the 2009 “prosperity index” published by the Legatum Institute, the United States was ranked as just the ninth most prosperous country in the world. That was down five places from 2008.
#4 In 2001, the United States ranked fourth in the world in per capita broadband Internet use. Today it ranks 15th.
#5 The economy of India is projected to become larger than the U.S. economy by the year 2050.
#6 One prominent economist now says that the Chinese economy will be three times larger than the U.S. economy by the year 2040.
#7 According to a new study conducted by Thomson Reuters, China could become the global leader in patent filings by next year.
#8 The United States has lost approximately 42,400 factories since 2001.
#9 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.
#10 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.
#11 In 1959, manufacturing represented 28 percent of all U.S. economic output. In 2008, it represented only 11.5 percent.
#12 The television manufacturing industry began in the United States. So how many televisions are manufactured in the United States today? According to Princeton University economist Alan S. Blinder, the grand total is zero.
#13 As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time that less than 12 million Americans were employed in manufacturing was in 1941.
#14 Back in 1980, the United States imported approximately 37 percent of the oil that we use. Now we import nearly 60 percent of the oil that we use.
#15 The U.S. trade deficit is running about 40 or 50 billion dollars a month in 2010. That means that by the end of the year approximately half a trillion dollars (or more) will have left the United States for good.
#16 Between 2000 and 2009, America’s trade deficit with China increased nearly 300 percent.
#17 Today, the United States spends approximately $3.90 on Chinese goods for every $1 that China spends on goods from the United States.
#18 According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.
#19 American 15-year-olds do not even rank in the top half of all advanced nations when it comes to math or science literacy.
#20 Median household income in the U.S. declined from $51,726 in 2008 to $50,221 in 2009. That was the second yearly decline in a row.
#21 The United States has the third worst poverty rate among the advanced nations tracked by the Organization for Economic Cooperation and Development.
#22 Since the Federal Reserve was created in 1913, the U.S. dollar has lost over 95 percent of its purchasing power.
#23 U.S. government spending as a percentage of GDP is now up to approximately 36 percent.
#24 The Congressional Budget Office is projecting that U.S. government public debt will hit 716 percent of GDP by the year 2080.
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