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NEW YORK ( TheStreet) -- Easy money is a painkiller, not a cure. The U.S. economy has unaddressed woes that neither President Obama and his liberal friends nor Speaker of the House John Boehner and his Tea Party rebels are willing to admit or address.
The new normal is nothing new: economic growth at 2%; Wall Street grabbing massive wealth and creeping impoverishment on Main Street. President Bush's recovery was equally anemic and the benefits similarly lopsided.
Before the financial crisis, ordinary Americans borrowed from banks to finance a spending binge, and housing and stock prices rocketed. When homeowners and car buyers couldn't make payments, the housing market crashed and retirement accounts tanked with stock prices.
This time, the Obama Administration has racked up huge federal deficits and the
Federal Reserve has helped finance those by buying massive amounts of long-term Treasury securities and bonds issued by government-owned
Fannie Mae and
All the while, the underlying causes of weak private sector growth go unaddressed: China's protectionism that steals American manufacturing jobs; bans on offshore drilling that keep America dependent on oil imports and tied down in endless Middle East wars; health care costs as much as double those in Europe that make exports uncompetitive; an increasing concentration of bank deposits at large Wall Street institutions not much interested in lending to small businesses; burdensome regulations that raise the cost of investing and jobs creation; and an IRS witch hunt against reform-minded entrepreneurs who dare speak publicly.
Nothing the Obama Administration nor the right wing in the House proposes does anything to fix those problems. Instead, they reflexively quarrel and cling to ideological remedies patterned after past failures.
In the face of all this, the Fed has been purchasing about $85 billion each month in long-term bonds to push down borrowing rates and boost the housing and auto industries.
Wider benefits -- for example, banks lending cheap money to small businesses -- have not materialized, because entrepreneurs are too terrorized by government regulators and a politicized IRS to invest, and the big banks would rather gamble with the money than make honest loans. J.P. Morgan's admission of wrongdoing in the infamous London Whale is just the tip of near criminal activity in Manhattan.