Wednesday, June 8, 2011

WSJ’s Moore: US Would Be Better Off Without Obama and Bernanke

Everything the Obama administration has done to right the country from the Great Recession has misfired, and any change of the guard after the 2012 elections will be a welcome one, says Stephen Moore, editorial board member and senior economics writer at The Wall Street Journal.

Federal Reserve Chairman Ben Bernanke needs to go as well, as his money-printing campaign, known as quantitative easing, hasn't lead to a more-lasting economic recovery.

“First of all, anyone’s policies would be an improvement over this president’s policies,” Moore tells Newsmax.TV. “Really, everything that Barack Obama has done on the economy — with very few exceptions — has actually hurt the economy.”

Government spending has been excessive and has failed to fuel meaningful growth, taxes are on the rise, and dependence on increasingly more expensive foreign oil shows no signs of abating, Moore says.

“Our public policies are completely out of whack, and they are working against growth and they are working against jobs. We need a dramatic, 180-degree turn away from what Obama has done toward tax cuts, debt reduction, spending reforms, regulatory relief and sound money,” Moore says.

Tax Relief Needed

Take taxes.

Current tax rates on millionaires comes to about 40 percent officially but when factoring in taxes that Obama has applied to the country via his healthcare-reform laws, increased regulation and payroll taxes, the figure jumps as high as 62 percent. That percentage, Moore says, means the economy will fail because taxes are hitting the very people who could hire workers and get the country out of the doldrums.

“About two-thirds of those people are the small-business owners, the operators and investors — they are the people who create the jobs,” Moore says.

“So if you’re going to take 62 cents out of every dollar they earn, they’re not going to have a lot of money left over to reinvest in the business and reinvest in job creation.”

For Moore, several Republicans look promising to replace Obama, including Mitt Romney, Herman Cain, Tim Pawlenty and Michele Bachmann.

“Just about any Republican who is running of the seven or eight that have thrown their names or hats in the ring has a much more pro-growth policy,” Moore says. “I think Republicans have very strong ideas about rebuilding this economy. And boy, does it need to be rebuilt.”

Whoever takes the country’s reins, the new president needs to fire Fed Chairman Ben Bernanke, Moore says.

Under Bernanke, quantitative easing hasn't made fundamental improvements to the economy but rather, artificially inflated it, putting everyone living here at risk to rising inflation rates. “Ben Bernanke has been running an extraordinarily inflationary monetary policy,” Moore says.

“We have to stop pretending that we can get out of this economic recession by printing money. It’s never worked in the United States. It didn’t work in Argentina, Bolivia, Mexico, Russia — all the countries that have tried this.”

Otherwise, the dollar will cease to be the world’s reserve currency, which could serve as a serious blow to the U.S. economy and financial system.

On a lighter note, the housing market appears to be bottoming out.

Home prices in 20 U.S. cities dropped in March to their lowest level since 2003, according to the most recent S&P/Case-Shiller index of property values. “I actually think that we are actually close to the bottom. I actually think that real estate and housing is a pretty good buy right now,” he said.

President Barack Obama, meanwhile, may want to make sure consumer sentiment rises between now and November 2012.

Weak consumer sentiment can ruin a president’s chances of getting re-elected like it did for Jimmy Carter and George H.W. Bush.

The consumer confidence index shrank in May to 60.8 from 66.0 in April due to growing pessimism about jobs and incomes, according to the Conference Board.

The index stood at 76.4 in May 1991 and at 96.0 in May 1979.

Analysts are taking note.

“There is plenty of time for the national mood to change, but the decline in income expectations is particularly telling,” says Steve Blitz, an economist at ITG Investment Research, The Wall Street Journal reports.

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