What’s more grim than today’s economic news? The politics of yesterday.
On Tuesday, Federal Reserve Chairman Ben Bernanke will deliver his annual report on US monetary policy and is expected to undergo harsh questioning from congressmen about how the Fed plans to stimulate the economy. The irony, of course, is that the policymakers on both sides will aim their barbs at the Fed rather than focusing on where they have become distracted from the pursuit of actual solutions.
The reality of the dire need for solutions was underscored by a new survey released by the National Association of Business Economics. The results of a survey on Monday which found that a majority believed increased profits and sales were short-lived and that many businesses had no plans to expand hiring.
Yet another sign that the unemployment rate is likely to remain above 8 percent until politicians move their focus away from the past and toward the future, according to two insightful op-eds published Monday.
Former Treasury Secretary Larry Summers writes in the Washington Post suggests that “the debate and policy focus needs to shift from inequality in outcomes, where attitudes divide sharply and there are limits to what can be done, to inequalities in opportunity. It is hard to see who could disagree with the aspiration to equalize opportunity, or fail to recognize the manifest inequalities in opportunity today.”
As Robert Samuelson notes in his Washington Post column on Monday, the debate in Washington is more about the politics of yesterday, rather than the policy of tommorow.
“A central issue for November’s winner will be to bridge the gap between government’s spending commitments and its tax resources — without so jolting the economy that its feeble performance deteriorates further or, alternatively, so shocking public opinion that it creates a backlash and collapses. This is the real but ignored challenge: to redefine government in a way that is economically viable and politically acceptable. To the extent that the presidential campaign might clarify choices or encourage a consensus, it is (so far) being squandered. Character assassination is a diversion, not a policy.”