What if we could go back in time. All the way back to the distant year of 2004. The words we would hear would give us the insight of something hauntingly familiar; and we would see how gloom is a dish served arbitrarily and cold.
“Wages are falling, health care costs are rising and our precious middle-class is shrinking. People are working; two jobs, three jobs and they still can’t get ahead. We’re told-(this) is the best that they can do.”
Are these words from Tea Party rallies or Sarah Palin’s Twitter page? No. These are the words of Democrat Presidential Candidate John Kerry. This is a passage from his acceptance speech at the Democrat Convention. Now, this was hardly an optimistic view of the American economy. To top off Kerry’s gloom campaign, he said repeated times that Bush had the worst job creation record since Herbert Hoover. Kerry also claimed that Iraq was the wrong war, in the wrong place at the wring time.
Here’s the problem with what Kerry was saying then; in 2004 the economy was healthy, unemployment was low and the much bemoaned Middle-Class was shrinking due to a disproportionate amount of them graduating up. In fact 2004 was a year in the middle of one of the largest job creation periods in U.S. history, so the whole Hoover comparison doesn’t work. As far as Iraq goes, the war has been a gift that keeps on giving. The Democrats can claim to be fixing Bush’s mess, until there are no more troops in Iraq. So by keeping troops in Iraq (which is the right thing to do) when bad news comes from the Middle East they can just blame Bush.
Now, if we were to use Kerry’s gloom checklist for the situation today, what would we find?
- Wages are falling. (This is pretty obvious, unless you are fortunate enough to work in the public sector.)
- Health care costs are rising. (This is true in spite of the "bold" legislation to address it.)
- Our precious Middle-Class is shrinking. (This is more true, because middle income is shrinking.)
- People are working two or three jobs when they can and still can’t get ahead. (This is on the off chance that people can find first or second jobs.)
- We are told that this is the best that they can do. (Remember that this is purportedly the first administration to have “inherited” a recession.)
If John Kerry were suddenly struck by objectivity and could look at the current administration in light of his comments in 2004, then his gloom would be more fitting for today. Use of the Hoover comparison would certainly be more fitting for today’s administration.
Hoover had a worsening economic situation and attempted "bold" initiatives to confront it. He took the protectionist route, slapping tariffs on imports. The last few years have seen something in a lesser level of protectionism. Tariffs have been put on imported tires and “buy American” clauses are also common in the spending packages coming from Washington. On another level, the Obama Administration is the first in thirty years to avoid free-trade agreements.
As far as taxes go, Hoover increased regressive taxes on several economic sectors including the Income Tax. The current tax debate is how many taxes should be raised, and by how much. In fact, the several levels of increased taxes, in various economic sectors, is Hoover-like in scope. The regressive increases in taxes can not be over-stated in terms of the potentially detrimental effect on growth.
In terms of spending, the Obama Administration has out spent Hoover and every other administration since, hands down. While real private sector job creation is minimal…like Hoover after two years. Unlike FDR, Obama’s job programs like Hoover’s have been largely at the State level. However, the effectiveness of jobs programs combined with stifling taxes has been pretty poor, at State or Federal levels.
Kerry attempted to create a picture of gloom in 2004; I wonder if he recognizes real gloom in 2010.
