The Federal Reserve hoped that its three-year-old economic rescue campaign would reach a climax at the end of June. It hoped that consumers and businesses by now would be spending more and more, and the central bank could start doing less and less.
That peak now looks like a long plateau. The Fed still is expected to announce Wednesday that it will halt the expansion of its aid programs at the end of June, as scheduled, when it completes the purchase of $600 billion in Treasury securities. But growth is sputtering, and economists now expect that the Fed will leave its $2 trillion of bandages, props and crutches untouched until next year.
The pace of economic expansion has repeatedly fallen short of the Fed’s predictions, and the central bank is expected to lower its eyes once again when its releases a new forecast after a two-day meeting of its policy board, the Federal Open Market Committee.
[A] number of studies have concluded that the Fed’s efforts have had only a modest impact on the economy. Stock prices have climbed. Corporations have rarely been able to borrow money more cheaply. Mortgage loans have seldom been available at such low interest rates. But companies are hiring few new workers, and people are buying few new homes. Almost 25 million Americans cannot find full-time work, a number that is rising again after declining modestly over the last year.
Thanks to the geniuses at the Federal Reserve, the US dollar has the utility value of toilet paper, and our economy is just as bad, maybe even worse, than it was when it first started creating dollars out of thin air. QE1 and QE2 are failures and the Fed wants to double down on some more.
Some call it Obamanomics, but really it’s just more of the same failed Keynesianism. The same economic theories that the left was praising in the pre-inauguration winter of 2009, as the salvation for our economic woes.
No coincidence that Peter Orszag and now, Christina Romer have jumped ship:
Romer is best known for drafting the February 2009 report “The Job Impact of the American Recovery and Reinvestment Plan,” which the White House used as an ammunition belt in the fight to gain passage of its $862 billion economic stimulus bill (the actual cost of which exceeds $1 trillion when interest is included).
Romer predicted that following passage of the stimulus bill, unemployment would plateau below 8 percent last fall and by this month register at 7 percent. That’s not close enough for government work, as unemployment stands at 9.5 percent today. It would be higher except that hundreds of thousands of frustrated job seekers have given up looking for new jobs and dropped out of the labor force.
Those who fail miserably in the real world, go back to teaching at Berkeley I guess.
Meanwhile, the $787 billion porkulus is flushed down the toilet:
…[T]he stimulus bill has proven to be an extraordinary waste of borrowed money that has failed to create jobs, generate economic growth or do much of anything other than line the pockets of White House political allies. That and give $308 million in subsidies to BP before the Gulf oil spill disaster, and subsidize a study on what happens when monkeys snort coke.
As Romer fades back to her teaching post at Berkeley, Obama is adding to the economic misery by creating an environment of regulatory uncertainty.
There is no accountability at all to what these people bring to the table. The Obama administration was heralded by the press and the blogosphere as young blood, a haven of Democratic intellectualism that was supposed to do away with fiscal recklessness of the past, repudiate a failed Republican agenda, and jump-start the economy.
Now, with the better part of two years behind them (not to mention almost four years of a Democratically-controlled congress), the administration is trying to put lipstick on a pig of an economic landscape.
The worst part of all of this is that real Americans are suffering. Nobody is asking for a handout, but the government’s actions appear to exacerbate the problems.
Last Friday’s Department of Labor jobs report, which showed private sector job creation fell by 190,000 between April and May of this year [...]
In total the U.S. economy has now lost a net of 2.2 million jobs since President Barack Obama signed his stimulus bill, and his administration is now 7.2 million jobs short of what he promised his $862 billion stimulus would help create by 2010.
This morning on MSNBC, former Rep. Joe Scarborough (R-FL) pressed prominent Keynesian economist and director of the Earth Institute at Columbia University Jeffrey Sachs on whether it was too early to declare President Obama’s stimulus a failure. Scarborough had to ask the question twice, but Sachs finally relented: “It did fail.”
The one thing that sticks out in the early days of the Obama administration and its push for the stimulus bill was the focus on jobs. Remember all the talk of “shovel ready” jobs that were part of public works projects that just needed that boost of Federal cash to get them off the ground?
Remember the Vice-President running around the country lying about the number of jobs “created or saved” on such-and-such project?
Meanwhile, the most glaring aspect of this bogus “recovery” is the lack of any job creation at all. And they continue to lie about job creation and the “success” of the stimulus.
Smoke and mirrors, people. Smoke and mirrors.