Is Permanent Recession the New Normal?

June 10, 2011 04:51

The economic solution is known, but it cannot be implemented until there’s a Republican president and a Republican Congress.  The reason is the ideology of the Man in the White House.

By James G. Wiles at American Thinker


In a speech on Tuesday, Fed chairman Ben Bernanke essentially threw up his hands.  He’s right.  The Keynesian economic toolbox is empty.  So is monetary policy — unless you want to radically inflate the economy and depreciate the dollar.

Continuation of these levels of unemployment will cause us to lose an entire generation.  The Great Recession is creating a fundamental change in the nature of unemployment, careers, family life, and economic prospects in this country.

President Obama’s only defense — it’s Bush’s fault! — is ludicrous.  And its rejection by most voters is reflected in the latest polls.

The existence of this huge accumulation of corporate capital in cash and marketable securities over the last three years means that the United States is experiencing a classic “capital strike.”  A capital strike occurs under a system of democratic capitalism where unacceptable political risk discourages private investment from taking place.  The result is economic stagnation and a steady build-up of uninvested capital.

That’s exactly what we have at the present time.

Here’s the point: the problem is not a lack of economic knowledge of what to do.  The problem is ideology — and the need for regime change in Washington.  That won’t happen until January, 2013, at the earliest.

The Capital Strike will end when the Obama Administration ends.  Until then, our unemployed children and grandchildren will have to wait…and wait…and wait.


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