Bernanke's Soft Patch: It's the Uncertainty, Stupid!By Kyle-Anne Shiver
Mr. Fed, Ben Bernanke, told reporters this week that he's clueless as to why America's economy is in this "soft patch."
Note from Mrs. Stretched-to-the-Gills-Scared-out-of-her-Wits-Middle-Class-American to Mr. Fed:
It's the uncertainty, stupid!
Mr. Fed should understand this better than the average American consumer, I think. After all, Mr. Fed is personally responsible for much of the monetary policy which has so heavily contributed to this excruciating consumer angst. Pulling out his fancy little money-printing press and calling it QE1 and QE2, Mr. Fed decreased the value of every dollar and contributed to the inflation which is creeping like kudzu in a stranglehold around the family budget.
At the same time Bernanke had the government printing presses spitting out more Monopoly money (the first time since the Civil War America has done such a stupid thing to try to fix the economy, by the way), the Fed has ferociously kept interest rates low, presumably to spur borrowing. But business certainty that the money they borrow today can be turned into higher profits tomorrow and that those profits will not be eaten whole by the beast of inflation, necessarily precedes that rush to borrow and build, which the economy must have to get out of this "soft patch."
Lacking any certainty whatsoever in this era of blitzkrieg change has put a wrench the size of California in our little economic engine.
The other half of America's economic-policy tag team, of course, is President Obama. This week, Investor's Business Daily published a piece by Scott Powell, of Stanford's Hoover Institution, in which he described Obama's presidential actions as "putting on the brake" to Bernanke's "accelerator" policies:
The bottom line on economic recovery is that only consumer confidence can produce the kind of spending spree necessary to jolt businesses back into high gear. And only business certainty in favorable government policy can spur the decisions to borrow the money, buy the raw materials, and hire the workers to produce the products consumers are once again willing to buy.
Right about now, the massive wave of uncertainty created by a political and financial class with debt-blinders on has scared the everliving daylights out of every American family and every small business without a 7-figure trust fund or a Hollywood contract. This vast middle class is, by the way, the bulk of American families and small businesses, those seemingly inconsequential people who actually pay most of the big-government bills, create most of the jobs, and buy most of the products produced.
Small businesses -- not the tax-avoiding big corporations, like G.E. -- create more than 60% of all new jobs in America. These small businesses are not small potatoes to the U.S. economy; they are the beef.
If Mr. Bernanke wanted a better understanding of the depressing uncertainties facing America's producer class, especially our small businesses, he should have hopped over to the House of Representatives and listened in on Secretary Geithner's appearance there. In a nutshell, with an administration insisting on raising taxes on small businesses (most of whom file tax returns as individuals), America's job-creation engines are in a major stall for the same reason consumers have scaled back spending: uncertainty.
President Obama wants small business taxes raised, according to Secretary Geithner, so that "the administration does not have to shrink the overall size of government programs."
According to Terence Jeffrey, writing for CNS News, Secretary Geithner got a good talking to from Rep. Renee Ellmers (R-NC):
There's that word again: "uncertainties." Yes, everyone seems to be quite uncertain these days about what cockamamie, economy-killing idea the feds will come up with next.
On the tails of Secretary Geithner's and Chairman Bernanke's House testimonies, Representatives Cantor and Kyl suspended their talks with the administration and Democrat representatives, citing an "impasse" due to Democrat insistence on raising taxes on those making more than $250,000/year, most of whom are running those small businesses America needs most. At least someone is willing to fight to help us get out of this "soft patch" before we hurtle over the cliff's edge where civilizations go to die.
And, yes, our situation is actually that dire.
In his column this week for the Washington Times, Peter Ferrara, a veteran of the Reagan White House, reminds us that all the debt figures -- as blood-curdling-scary as they are -- do not even count unfunded future liabilities. Those inconsequential things like Social Security checks, Medicare and Medicaid, public worker pension liabilities, FDIC liabilities, FHA liabilities, and the like are not even figured into the cliff-hanging stats regurgitated to the mouths-already-agape American public. Truly, if you don't have a stomach of cast iron, you really ought not read Mr. Ferrara's more detailed portrait of our coming crash at cliff's bottom.
Is there any hope?
Well, of course there is. But our hope is most certainly not in big government.
When we look to our growing-bigger-by-the-day, fat, insatiable federal government, all we see is uncertainty at best.
When we listen to the guys in charge of that behemoth beast of big government tell us they just can't figure out why America's engine of prosperity can't get past these little "bumps in the road" or the "soft patch" in the ground, all we can think is that the whole lot of them are just plain stupid.
And that inescapable fact is the only thing certain in this most uncertain land.
Kyle-Anne Shiver is an independent citizen journalist. She is a frequent contributor to American Thinker and Pajamas Media. She welcomes your comments at www.commonsenseregained.com.
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