I found
this editorial when searching for a picture of John Maynard Keynes for my slides on Monday. It connects a topic we've been discussing--Keynesian macroeconomics--to a modern day issue: will the president be re-elected? Mr. Wapshott offers:
No president since 1948 has been elected with a jobless figure higher than 7.2 per cent, so with unemployment currently running at 9.1 per cent, he looks headed for certain defeat... With the White House admitting there is little chance unemployment will fall before the election next year, the president needs some good advice on how to get people back to work, and fast.
Fan or not of President Obama, things aren't looking that good for his chances next November. Keynes would say that the stimulus was a good start, but...
...the trillion dollar injection into the economy was far too small to do much good and in many cases went to the wrong people and was spent on the wrong projects... Keynes’s famous “multiplier,” by which every dollar spent is worth far
more as it is passed from hand to hand, doesn’t work if the cash is
placed under a mattress.
The article is a good read, whether or not you agree with Keynes, Obama or government stimulus. It helps clarify the issues that we've been discussing in class, plus reveals that Keynesian economics isn't a partisan issue. For instance, Keynes favored
lowering taxes during recessions, a plan that Republicans have supported wholeheartedly.
I agree with Wapshott's Keyne's recommendation to Obama that he should be "bold and take the fight deep into the opponent's camp" in this case the republican leaders in congress. Ever since Obama was sworn into office, republicans pledged to do everything to make him a one-term president even when he was inheriting a collapsing economy from all possible fronts created by the negligence of the previous republican George W. Bush administration; of a very unregulated economy, precipitated decisions to involve the country into wars without much planning and knowledge about two foreign countries such as Afghanistan and Iraq. Obama's attitude since the beginning was too bureaucratic with eloquent language and willingness to work to induce changes but he definitely lacks determination to take a stance and push on his ideas or proposals. Obama wants to have both sides of the isle satisfied but it is impossible to work with a reactionary group of leaders such as the republicans who have sold their souls to the corporations to defend their interests even if this means moral hazards for the rest of the population and the country itself. Obama will be a one-term president if he keeps being too passive but as John Maynard Keynes would say, interfere in the economy and be more intelligent pressing on to help the economy and put everyone back to work. Personally, i would also love to recall all those republicans along with the current speaker of the House Boehner because all they do is block all legislation that may be positive to fix the economy, seems to me that their pure presence in congress serve as nuisance because republicans leaders and democrats in general are in office to manage the country to prosperity as one functioning organism working towards a common goal. This should be the mission of public service leaders and not a business opportunity for them.
ReplyDeleteCarlos Moya
Good points, Carlos. At this point, I'm not sure what the president can do that the rest of Congress would bother passing.
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