So obviously it has been quite awhile since I have had anything to say – at least not much to say here. We have been locked politically in a twilight zone of do-nothingness since Barack Obama was (re)elected in 2012. Sure, Obamacare was passed (with dubious results to date), but have we really seen anything substantive vis a vis a recovery? True there has been some job creation, but our friends at some of our favorite blogs have pointed out that the vast majority of “good” jobs have come from the shale oil industry while the rest have been temporary or part time jobs.
Why the Republican Congress Will Be a Boost for the Economy
The most important ingredients missing from today’s economic puzzle has been regulatory uncertainty and the lack of wage inflation. Having said that, we can expect that the one thing that Republicans are universally good at (de-regulation) will be one area we will be spending a great deal of time watching. This Congress (in its infancy) has already taken a crack at Dodd-Frank (failed) – the “great” financial reform act of 2010-2011. Other likely targets include Obamacare, minimum wage, and the Keystone Pipeline. We can expect this Congress to attempt to bulldoze impediments to growth, regardless of social cost.
While the rest of the country (and Democrats) cry foul about the de-regulation efforts, the true nature of the Republican Congress of 2015 will reveal itself: earmark spending. While Republican candidates incessantly point fingers at their Democratic counterparts during the campaigns, Republican electorate are masters of the earmark (spending bills attached to non-related legislation). While you may see this Congress talk a great game about “passing a balanced budget” (pipe-dream), or “reducing the deficit” – it will all be a shell game which will not in-fact reduce spending but will instead (net) increase it via hidden earmark spending bills and amendments attached to otherwise critical legislation.
Why You Should Root for Greater Spending
Sadly – one of the great needs of our economy is greater government spending. Critics of this (broader) philosophy (read: Cullen Roche) will rightly point out that what is needed is wise spending on productive investments to increase productivity and demand. What we are more likely to get is pork spending (Bridge to Nowhere anyone?) – which while providing a temporary bit of grease to wheels isn’t going to have the longer-term, substantive impact that a more thoughtful spending plan might.
We are now going on 7+ years of (call it what you want) stagnation, recession, depression, malaise. For the vast majority of the population, things have not gotten substantially better. For the youth of this country (and MANY other nations), things have gotten substantially worse. So to my way of thinking, I say let’s spend some government money… preferably on things that offer some form of return. We really need substantive growth-oriented fiscal policies – and have needed them for some time. The Fed has tried to hold the economy together for the last 7 years with monetary policy and while it has kept the ship from sinking… we are a far cry from righting the ship and moving forward. The hope here is that finally… with the “tight belted” earmarking Republicans maybe enough grease gets to the wheels that the economy actually DOES recover… for the rest of us.