How do you react to the lack of interest? Just that I don't run with crowds, the crowds are usually wrong, especially about economics. This is no exception.
The thrust of Kudlow's argument is that the administration doesn't have a growth policy in effect. The administration is depending totally upon government spending and monetary stimulus in order to grow the economy, which isn't going to work, and hasn't worked, and has never worked in history. Yet, these leftists have conned millions into thinking that it will work this time.
Once again, I explain my usage of the term "left". It is the term that the left applies to themselves when they aren't trying to fool everybody. Thus, conservatives should never refer to themselves as being "right", as they are following the premises of the left. That is to say, the debate should be framed as Ronald Reagan framed it---freedom v. tyranny. Now, if Rush Limbaugh and those like him on the so-called "right" would just stop referring to themselves as being on the so-called "right", he may get a clue about what to do about Obama. Ah yes. Rush said he didn't know what to do about Obama. Rush can't be a leader if he admits that he doesn't know what to do. But I digress.
This chart, on Zero Hedge, caught my eye this morning. What does it say? It may help to annotate it with historical guideposts, so I tried that. It may give us a clue about what is happening right now.
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| http://www.zerohedge.com/news/2014-02-14/5-things-ponder-cash-qe-investing-1929 |
1968: GDP per capita in terms of gold reached its all-time peak.
1971: Nixon takes US off the gold standard. Molten-salt reactor technology shelved and forgotten about.
1980: Volker conquers inflation with very high interest rates, Reagan gets elected. Reagan ends price controls on energy production.
1992: Bush defeated, Clinton assumes Presidency. Dot com boom shortly follows. ( Growth driver of world wide web begins with invention of web browser in 1993 or so. )
2007: Beginning of Great Recession. ( Dot com boom long ago gone bust, housing bubble collapses ).
Note that the velocity of money ( in the black dashed trend line ) is at an all-time low. Also, the velocity of money was much greater than the GDP rate of growth in the nineties during the dot com boom. Note also that the green GDP trend line and the black dashed velocity of money growth line crossed during the Great Recession and now are BOTH heading downward. That's a unique situation that hasn't occurred in the last 50 years of this chart.
What does this mean? Since 1968, this country has adopted the leftist attitude of limited growth. It was interrupted in the Reagan years, but never did end completely. This is reflected in slower growth rates which is reflected in the chart as lower velocity of money and lower GDP growth rates. As Kudlow pointed out, there's a limited growth policy in this administration. It is entirely consistent with the leftist viewpoint. The left has no hope if the economy is growing. Only when the economy stagnates do they have the hope of pushing their class warfare ideology.
The cure for leftism is a growth policy. The trick is how do you do that? It won't come from just mere tax cuts. That also invites the left wing attack of favoring the rich. You need growth drivers, like the world wide web of the nineties. Clinton got away with raising taxes because of the world wide web. Growth drivers may mean more in terms of economic growth than cutting tax rates.
May I suggest a couple things? Actually, I already have made it many times on this blog. Let's grow the energy sector with new innovations, and let's conquer space.
But that sort of thing isn't what attracts people's interest. The political combat does. Limbaugh offers that and gets the audience. I try to suggest solutions and nobody's interested. Nuff said.
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