This morning’s dismal U.S. gross domestic product (GDP) growth numbers should give Federal Reserve Chairman Ben Bernanke pause about the prospects for the U.S. economic outlook. Despite the fact that the U.S. economy is still recovering from its worst postwar economic recession, and that it has been on steroids of fiscal stimulus and quantitative easing, all that the U.S. economy could do in the first quarter of 2011 was to muster 1.75 percent GDP growth. Such anemic economic growth offers little prospect that U.S. unemployment will decline from its current level of almost 9 percent anytime soon.Yesterday, ever optimistic, Bernanke suggested that while the economy had hit a soft patch it would recover in the remainder of the year to around 3 percent growth. His reassuring words would have had more credence had he not given similar assurances that the economy was gaining traction in early 2010, only to have found himself forced to introduce a second round of quantitative easing towards the middle of that year to boost a flagging economy.
Bernanke’s current optimism about the prospects for a pickup in U.S. economic growth are all the more surprising given the very strong headwinds that the U.S. economy now faces. Not only are sky-high gasoline prices sapping consumer purchasing power, but housing prices are again declining under the weight of the foreclosure crisis at the same time that the states are engaged in another round of spending cuts. It would seem to be only a matter of time before Bernanke introduces us to a third round of quantitative easing.
And speaking of sky-high energy prices, Investor’s Business Daily explores “Obama’s ‘Annie’ Energy Policy:”
Gas Cost: Is it just us, or do Obama’s policies sound suspiciously like that “Annie” song: Don’t worry about today’s killer pump prices, a bright energy sun will come out tomorrow.
When gasoline prices topped $4 a gallon in 2008, presidential candidate Barack Obama had a simple message for voters: There’s nothing that can be done about it today.
Certainly not offshore drilling. Obama trashed Sen. John McCain’s call to open up vast tracts of offshore oil to exploration and drilling. It would not, he said in June 2008, “lower gas prices today. It would not lower gas prices this summer. It would not lower gas prices this year.”
Nor a gas tax break. Letting consumers temporarily off the 18.4-cents-per-gallon federal gas tax hook was, Obama argued, merely a “gimmick” that would “only worsen our addiction to oil.”
And not even opening up more oil and gas leases. Obama said oil companies “already own drilling rights to 68 million acres of federal lands, onshore and offshore, that they haven’t touched.”
Indeed, Obama claimed that anyone suggesting a short-term fix was just trying to peddle “false promises, irresponsible policy and cheap gimmicks that might get politicians through the next election.”
Nope. What we needed, Obama argued in June 2008, was a plan for tomorrow that provided more money for alternative energy: “I will invest $150 billion over the next 10 years in alternative sources of energy.”
Fast-forward three years to this past Saturday. Gas prices again top $4 a gallon, and what’s the president’s message to struggling families? “There’s no silver bullet that can bring down gas prices right away.” And anyone who suggests otherwise is just “trying to grab headlines or score a few points.”
In a recent op-ed, Jonah Goldberg noted the Catch-22 of Obama’s do-nothing energy policy:
One suspects that Obama would dearly love to drill a lot for more oil and gas, simply for the political windfall in jobs and economic growth. But after he flipped on offshore drilling, then flopped after the Gulf of Mexico oil spill, he cannot flip again without infuriating his base. So he brags about how much more drilling there is today, even though that’s the result of policies already in the pipeline.
Obama and the greens are in an exquisite bind. Without economic recovery, Americans won’t support Obama’s “investments,” but Obama’s investments are a hindrance to recovery.
Liberalism has become a cargo cult to the New Deal, but many of the achievements of the New Deal would be impossible now. Just try to get a Hoover Dam built today.
Thus it’s time for the inevitable “Obama’s just too darn smart for this gig” op-ed from one of his supporters, and Dana Milbank of the Obama-friendly Washington Post is happy to oblige:
Seeking a template to understand the enigmatic president, I consulted three leading academics in the fields of psychology and behavior. With their help, I put Obama on the couch and came away with a reasonably coherent diagnosis: There’s too much going on in the poor guy’s head.
This is of course boilerplate stuff whenever there’s a Democrat in the White House who’s in too deep: smart Democrats are invariably too wonky for their own good.