published Monday, December 16th, 2013

Smith: The agenda: Economic growth badly needed

By Robin Smith

Our nation's economy has been in a downward cycle since late 2007.

The last seven years have been marked by the regulation-created housing bubble that burst after the subprime lending crisis, where those who could not carry the burden of a loan received lending due to lowered standards resulting in high-risk mortgage investments and ultimately a devaluing of all commercial and residential real estate.

Then, taxpayer-funded bailouts propped up major banks which had made these risky loans. This, in turn, yielded a freeze of capital that hampered investment and the expansion of our economy.

The uncertainties of lending, access to lines of credit and the "Affordable Care Act" have impacted businesses large and small and roiled the jobs market.

Unemployment in December 2007 was 5 percent and doubled to 10 percent in October 2009. The current report of 7 percent unemployment masks a labor market that has reduced the number of working adults to levels not seen since the "stagflation" of Jimmy Carter's administration.

The "underemployed" are not counted in the 7 percent. Mort Zuckerman, editor-in-chief of U.S. News & World Report noted on PBS' "The McLaughlin Group" that 88 percent of jobs created in 2013 through October were part-time jobs, historic by every measurement available.

Food stamp participation has doubled since 2008 and a surge in disability claims parallels the high unemployment and underemployed trends.

The answer, according to Barack Obama, the Democrats and other "progressives" is to raise the minimum wage and expand programs that function as wealth redistribution in an attempt to address inequality of income.

While a state-controlled economy and the idea of government-induced redistribution of wealth have been discredited, that is exactly the policy being offered as a solution by too many in our government "leadership."

Have you ever heard the phrase, "A rising tide lifts all boats?"

It was President John F. Kennedy who proclaimed this well-known reference to the benefit of a healthy economy -- one with expanding businesses and companies where workers of all skills are needed and employed.

But do you know the rest of the quote from President Kennedy?

Here's the complete statement: "No American is ever made better off by pulling a fellow American down, and every American is made better off whenever any one of us is made better off. A rising tide raises all boats."

A dependent class finding its sustenance from government is politically advantageous to some; it's destructive to those seeking to be independent, pursuing competition and success.

Another quote penned by a Christian minister echoes the same theme: "You cannot bring about prosperity by discouraging thrift. You cannot strengthen the weak by weakening the strong. You cannot help the wage earner by pulling down the wage payer. You cannot further the brotherhood of man by encouraging class hatred. You cannot help the poor by destroying the rich. ... You cannot help men permanently by doing for them what they could and should do for themselves."

To address "income inequality" the navigation must be toward higher seas of private-sector job growth and commercial expansion. Right now, we're splashing in a mud puddle with some slinging mud while others are trying to get out of the mire.

Robin Smith served as chairwoman of the Tennessee Republican Party, 2007 to 2009. She is a partner at the SmithWaterhouse Strategies business development and strategic planning firm and serves on Tennessee's Economic Council on Women.

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nucanuck said...

Ms Smith just doesn't get it.

Globalizing the economy transferred millions of blue collar jobs to low wage countries. Technological advances are eliminating millions more good jobs. The resulting worker glut is driving down wages for most middle class workers and that trend continues. Millions of good, well educated workers are scrounging at part time jobs and low wage jobs just to try to stay afloat. Millions more have quit looking out of total despair. There is no political formula that can replace those jobs.

The fabulous growth of the twentieth century is over. Global demographics and resources seem to indicate that the US is in for decades of zero or negative growth while trying to pay back what has been borrowed from the future. Politicians of any stripe who promise sugar plums are either liars or fools.

The Kondratieff Winter is upon us and we must prepare as best we can for difficult times.

December 16, 2013 at 2:01 a.m.
SaraB said...

I wish the writer would address how the call for amnesty by many of our Republicans pushed by big business and the pro-abortion crowd would not be an issue if the 55 million abortions had not been performed since 1972.

I am so angry that spending and debt is going to ruin the opportunities for my generation. I completely get it that when the government is doing all the work, the private sector gets pushed out.

I'm looking for anyone with vision and this article has some points in that direction. I want to see everyone have a chance to rise. It's not happening now.

December 16, 2013 at 7:02 a.m.
inquiringmind said...

I'm not sure about 2 things, why Ms. Smith has such a short memory about who was president and caused the ballooning unemployment with ego-fueled military interventions; and why some "Christian minister" and an editorialist would turn Jesus' teachings on its head to praise the greed of the rich.

It is insidious propaganda using sweeping generalization to couch one's refusal to aid the poor (with a living wage, perhaps?) into an argument that the poor are abusing(destroying) the rich because they are not "thrifty," but greedy! Perhaps the two writers are blinded by their own greed and political perspective.

Maybe a better sermon for the preacher and his congregation goes like this:

"You cannot be true to the Kingdom of God by refusing to help the poor, the ill, the blind, the captive and the oppressed. If you go to bed with a full stomach, you need to be on the street looking for the one who goes to bed with an empty one, feed them and help them find a sustainable Christian vocation. You have too much and they too little. "

"You cannot get into heaven by trampling the shoulders of the poor, only into Hell. You cannot change another person's mind, you can only change your own."

"You cannot get into heaven by criticizing others for not doing their duty. You can get into heaven only by doing your own duty that shows you believe. Begin by reading Matthew 25:14-46, the parable of 'talents' and judgment of nations."

December 16, 2013 at 8:02 a.m.
AgentX said...

Give a man a fish and you feed him for a day, teach a man to fish and you feed him for a lifetime.

December 16, 2013 at 9:54 a.m.
soakya said...

Robin does what all local politicians do, blame Washington, but not just Washington the other party in Washington.

While a state-controlled economy and the idea of government-induced redistribution of wealth have been discredited, that is exactly the policy being offered as a solution by too many in our government "leadership."-Robin

it is the same exact policy being offered by the so called conservatives of TN and Hamilton county.

December 16, 2013 at 10:27 a.m.
Facts said...

The majority of these comments above prove that either those making them do not own or run a business, and may not be employed, or simply show up at work and get the check for the week.

There is absolutely a massive change in the level of regulation and government interference that is stalling any expansion or hiring during the last 5 years as compared to prior to the Obama election.

I was no fan of Bush. But the last 5 years of incompetence has improved his legacy dramatically.

Unemployment has soared due to uncertainties and government policy led by the White House since 2009.

December 16, 2013 at 10:38 a.m.
nucanuck said...

Facts, you are seeing what you want to see, but certainly not the big economic picture. Since 2001, artificially low interest rates, lowered taxes, and massive government deficit spending have sustained the US economy. Demand has been so soft that new business formation and loans for that formation have slowed to a trickle. Obama driven regulation on small business is mostly a figment of your imagination.

Wages for the bottom 80% have stagnated or dropped while the cost of necessities has risen. Any spending growth has had to come from the 20% who still have earnings growth.

The class warfare and redistribution of wealth that began in 1980 has not yet ended, but the rich have won. America's huge middle class has been brought to her knees, all while riches beyond all reason have been cornered by the few. The land of opportunity has become an exclusive preserve for the few in just 33 years. Now those few are making alternative living arrangements in other parts of the world, not realizing that it is because of the very redistribution of wealth that they fought for that has contributed so much to impoverishment of the nation.

The rape and pillage has been a bi-partisan affair, now America will need a unified effort to rebuild the country. Taxes will have to rise, the military will have to be slashed. Pensions and social programs will be decimated. The moneychangers will get their hats handed to them. America is in for a full restart and trying to place blame for the collapse will only poison the debate about what comes next.

December 16, 2013 at 11:46 a.m.
Rickaroo said...

Sounds like Robin Smith is a disciple of Thomas Sowell. I have read a lot of what he says about the Great Recession of '08 and he always lays the blame ENTIRELY at the feet of Fannie and Freddie and a dictatorial government forcing them, in bleeding-heart liberal fashion, to make housing loans to minorities and the poor whether they were credit-worthy or not. But the FACT of the matter is that Freddie and Fannie did not get into the subprime lending scheme until late in the game and even then they accounted for no more than 24%, at their peak, of the shaky loans. Subprime lending was exploding between 2004 and 2006 and the private banksters (whom Sowell NEVER mentions as culprits in the housing bubble) were making the vast majority of those repackaged loans. By 2007 only 17% of Freddie's and Fannie's loans were sub-prime. And another FACT worth mentioning is that their loans actually proved to be more sound, with fewer defaults, than those made by the private banksters.

If there is ONE thing that can be said to have precipitated the housing bubble and the financial sector meltdown it is the repeal of Glass-Steagall, which can be laid at the feet of Clinton, who seemed to have drunk too much of the Kool-Aid of Reaganomics. If that law had remained in place the sort of casino-style investing (with other people's money) would never have been allowed to occur.

And what about Allen Greenspan? Neither Sowell nor any other conservatively biased economist/pundit dares to mention him when discussing the housing bubble. He (Greenspan) who had said repeatedly before, when others were speaking out about how these risky investments needed reigning in, that the market was strong and capable of regulating itself. But in the end he ate crow, stating that he was in FACT wrong.

I often wonder why Sowell and his fawning disciples on the right never mention the private banksters/wheeler-dealers when discussing the reasons for the financial meltdown. But the reason is clear: their culpability is so obvious that there is no way to get around dismissing their blame if they dare to mention them. It's much easier if they just keep repeating the conservative meme: if anything goes wrong with the economy it's always the fault of bleeding-heart liberalism or pesky government regulation and never the fault of an out-of-control, greed-driven free market.

December 16, 2013 at 1:13 p.m.
inquiringmind said...

facts, please spare us your tears, if your business can't pull its load perhaps it isn't such a viable business...and please read your history, you cannot blame unemployment on the current administration - and keep a straight face.

December 16, 2013 at 2:50 p.m.
soakya said...

so do you give them credit for the rate coming down?

December 16, 2013 at 4:28 p.m.
nucanuck said...

Not much credit due when the size of the workforce hasn't increased.

December 16, 2013 at 11:12 p.m.
soakya said...

just making sure, this administration wants to credit for every minor bit of good news but refuses to take responsibility for any failures, and there have been numerous failures with no one held responsible.

December 17, 2013 at 3:35 p.m.
nucanuck said...

What administration in modern history stepped forward to take responsibility for failures? None comes to mind.

December 17, 2013 at 3:58 p.m.
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