Everyday low prices are no longer enough -- middle class consumers are fleeing to dollar stores to stretch shrinking paychecks. Yet, Democratic politicians and economists who fashioned their failed policies tell us the economy is on the mend.
Janet Yellen at her confirmation hearing bragged that the economy has created 7.8 million new jobs, and assured Senators it's just a matter of time before the Federal Reserve stops printing money to purchase $85 billion in government debt. Incidentally this funds President Obama's stimulus spending and reckless expansion of government into health care.
She reassures us that Fed policymakers are just waiting for the right moment. That may be when hell freezes over, because President Obama's spending and borrowing are visiting Eurosclerosis on America: slow growth, high youth unemployment and a level of debt that will force presidents in the next decade to either dry dock the navy and stand down the army to pay all the interest and the entitlements he has created.Washington will have to dramatically curtail most federal spending for road building, medical research, education and support for law enforcement to maintain the barest levels of government administration. Welcome to Italy or worse, Detroit's woes, generalized across America, where it takes nearly an hour to summons police in an emergency. Since unemployment peaked at 10% in 2009, the economy has grown at a paltry 2.3% annual rate. By way of contrast, unemployment peaked at nearly 11% for Ronald Reagan, and over the same period as the current recovery he delivered 4.9% growth and 12 million new jobs. College graduates driving taxis during the Carter years found bright new futures and ultimately gave us the New Economy of the Clinton presidency. Reagan tackled ailments that besieged the country, whereas Obama ducks the economic challenges that hold back growth -- a dollar that is overvalued, government regulations shutting down new oil and gas offshore and on the North Slope, and business regulations that are more burdensome than effective. Dodd-Frank is forcing small and regional banks to sell out to their larger brethren who take the virtually free money the Fed is stuffing on their balance sheets to gamble and worse. Consider JPMorgan's (JPM) mammoth losses in the London Whale trading debacle -- and criminal activities. Many of its executives, and perhaps the bank itself, face criminal indictment according to the recent settlement of civil and regulatory claims with the Justice Department.
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