An Economic Thought Experiment
September 29, 2011 - 9:05 am
Suppose you’re the president and the economy is in terrible shape. The national debt has soared to the point that it endangers the nation’s future. Suppose further that skyrocketing fuel prices are leading to inflation that eats up family budgets, leading to less economic activity. This weakens the economy, and with it, your prospects for re-election.
You’re the president. That doesn’t mean you have unlimited power, but you do have a great deal of power. You can’t overcome the global economic forces that are contributing to rising fuel prices, but you’re not powerless. You can marshal the federal bureaucracy to take action, and you can use the bully pulpit to signal the markets one way or another.
You can embrace proven energy sources, free them up and spur job growth without spending a federal dime, and bring down inflation and unemployment a notch. You can encourage expansion of the domestic energy sources that we know we have. That will help your re-election cause, and help the country at the same time.
Or you can loan federal money we don’t have to unproven energy sources, lose that money, and make no difference at all on the larger economic picture. You can marshal the federal bureaucracy and use it to force energy producers to shut off proven energy sources, lay workers off, and drive energy prices higher. You can demonize proven energy sources and promote alternatives that won’t be ready to supply the nation’s needs for decades, if ever. None of this helps your re-election or the economy, at all.
What do you do?
We know which choice President Obama has made. What we don’t fully know, is why?