The President has doggedly pursued a classic “Keynesian” formula of “pump priming” to resuscitate our economy. Funny, we use the term for restarting a pump to refer to this tactic instead of “jump starting” or “kick starting,” I guess because it is a slightly less intense exercise. Well to use a term from the oil industry we are “pumped out.” Some $5 trillion of deficit spending aided by an untold amount of Federal Reserve Bank “quantative easing,” another form of “pump priming,” has not brought the economy around. It has not even made a dent in the 8 million jobs lost in 2009.
One would think that the administration would rethink its approach and indeed it has. The President made two major new policy announcements in his State of the Union speech last Tuesday. One will be to increase preschool programs to better prepare youngsters for school and insure they have a better school experience so that a dozen years or so in the future we will have a more internationally competitive work force. You have to admire the long term thinking of the president’s team, if we can’t get the job done in four years, we will just add another 12 years to the process.
The other major initiative announced by the president was to raise the minimum wage to $9 an hour. Intrinsicly a good idea, but with unemployment still at the 8% level, the move may serve to raise this number. But at least those still left with a job will enjoy a higher pay base to use when they have to apply for unemployment benefits.
Well I am pleased to see that the president and his crackerjack team are exploring new ideas to get us out of the worse economic recovery in 100 years. Hey, at least they are not still working to keep the economy from goiing over the cliff. Maybe some day we will get back to the “Old Normal” instead of having to lower our expectations to the “New Normal.”