Friday, July 10, 2009

Trouble in River City

That's right...trouble...starts with T and ends with e. The economy is continuing to weaken. There are just no green shoots to speak of. Today, the consumer confidence numbers confirmed what most of us have been sensing. Folks are reluctant to spend; businesses are reluctant to hire.

Looming large is the set of problems faced by state and local governments. The next shoe to fall will be layoffs of teachers and other state and local government employees. State and local government finances are in free fall. California is by no means a unique situation.

A real stimulus plan might have helped. We will never know, since the stimulus plan was converted into a relief plan by the Congress and President Obama, pretending this was the real deal, signed it into law. It has done no good. It has simply added another trillion dollars to our national debt for no good reason. And now we are back to square one.

So, what do we do now? Obama has basically run out of ammunition. "Cap and trade" is a depressant, not a stimulus. All "cap and trade" does is increase electricity bills with no real impact on global carbon emissions. Health care reform is a budget buster. No stimulus impact there either. Congress is busily rigging our banking and financial system so that serious lending will by stymied for years to come. That won't help much. "Card check" is on the horizon. That's a job depressant. Meanwhile the Obama folks still trumpet the "greed and corruption" theme that discourages businessmen from taking any positive actions. The Obama legislative program penalizes businesses that hire and rewards those who don't hire. It's not obvious how that helps.

Tragically, there is no Obama recovery plan.

This economy may be headed for another leg down. This seems more and more likely. The Obama Adminstration has fumbled away their opportunity to be helpful. Sooner or later, even the fawning media will have to face the reality. This Administration is on the wrong track. Beating up on the business community is not an effective way to promote job growth. Wasting taxpayer dollars and running up massive deficits for no reason is not much of a plan either.

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