With news that the economy “unexpectedly” contracted in the last quarter of 2012, one does not have to be an economist to sense that whatever we have been doing for the last four years is not working and we may not see the long-promised “summer of recovery.” The naturally robust recoveries that usually follow deep recessions haven’t happened. With astronomical new borrowing, we now find ourselves in the same predicament as the proverbial end-stage addict who cannot continue with his lethal habit or survive without his toxic infusions.
In the last four years, we haven’t had a budget without a $1 trillion deficit; we have added over $5 trillion in new debt. And yet for all such stimulatory dope, we have not witnessed a single month of unemployment lower than 7.8 percent—in a country in which well under 6 percent unemployment as recently as 2004 was derided as a “jobless recovery,” and in which a prior administration in eight years did not have a single month with an unemployment rate higher than every month of the present administration.
Is the new normal about 8 percent unemployment, GDP growth of about 0 to 1 percent, and budget deficits at $1 trillion? The one bright spot, the stock market, seems predicated on the shrug that the economy is so calcified that even massive infusions of new money cannot quite yet prompt inflation—and with near-zero interest rates, there is really nowhere else to put money.
More troubling still, at a time of historically high gas prices, there has been an inexplicable hesitancy to exploit fully the natural bonanza of new North American gas and oil finds, whether defined by the reluctance to open public lands to new leasing or the cancellation of the Keystone pipeline project. What most see as a godsend apparently is seen by the administration as an unwelcome impediment to a subsidized wind-and-solar future, and European-level gas prices. It is almost as if evil frackers and horizontal drillers have come along and rained on Steven Chu’s envisioned carbon-free parade.
Add in the weird anger at the private sector (e.g., you didn’t build that business, pay your fair share, fat cats, corporate-jet owners, millionaires and billionaires, junketeering to Las Vegas, one-percent, no time to profit, at some point you’ve made enough money, etc.), harangues about raising taxes, and new regulatory activism from the NLRB to the EPA, and for some reason we seem to be trash-talking the very business leaders who we assume must have the confidence and moral support to help lead us out of hard times.
Stranger still, the administration offers no introspection, no self-critique, no reexamination about the present strategy, which remains more or less undefined, but has gone from four years of sloganeering “Bush did it” to the new blame-gaming of ‘The Republican House did it.’ But what incoherent logic: Whereas a supposedly impotent Democrat-controlled House and Senate between 2006–2010 were not responsible for hard times, the now all-powerful Republican House alone from 2010–12 can be suddenly culpable in two years in a way that both houses of Congress were not in four?
Ultimately, either the economy is going to have to get better fast, or the administration, to avoid Carterization, is going to have to alter course radically in the manner that it quietly flip-flopped on other issues like the Bush-Cheney anti-terrorism protocols and campaign finance/ethics—or it must come up with even more demonic wars of distraction than the present one waged on the xenophobes, the assault-weapons shooters, and the entitlement slashers.