I have a much different perspective of the economic recovery from the Great Recession than most others.
You always hear the recovery described in guarded comments with no one wanting to sound too optimistic or speak of it in any glowing terms.
My question would be, what would Herbert Hoover think of this economic recovery? I would surmise that he would have thought of it as pretty darn good, something that he would have traded for in a minute.
The Great Recession would have been, “The Greatest Depression,” were it not for the aggressive unprecedented actions of the Fed and Treasury. I know that some do not believe that, but they are wrong. The Federal Reserve Board and Treasury do not get the credit they deserve.
It is not politically acceptable to do so. The Great Recession was not your garden variety recession that some compare to this current recovery.
The Obama administration has done everything it could do given the obstructionist Congress to get the economy going. Congress added structural obstacles to the economic recovery, failing to enact the jobs bill for political reasons, while attempting to handicap the independence of the Fed.
Congress gripes and moans about how poor the economic recovery has been criticizing the very officers and officials who should be praised for how well they guided the economy back from the brink.
The economic policy was right despite what Congress says. It is working. It would have worked even better had Congress not been so political. They didn’t want this recovery to be strong making Obama look too good there-in dimming their election prospects.
There is a term in business called, “acting in good faith.” They have no clue what that means in Washington. There is no acting in good faith between members, political parties or ideological extremes for what is in the interest of the country anymore.
The opposition to the mechanics of this economic recovery did not act in good faith, instead putting political interests first. Their political strategy succeeded at the expense of the country. The great irony is that they may well be politically rewarded for it.
The Fed had to get the economy stabilized and growing before Congress could address the fiscal issues that still represent economic threats to future solvency. That means that for the economic recovery to be sustained long term Congress has to now step up and act by reforming fiscal policy.
Is it going to act in good faith or pursue an ideological fatwa? Isn’t that where the economic policy in Washington fails?
I think Congress actually looks at things like the failure of the Secret Service to stop intruders from entering the White House as useful so it can hold hearings and declare others to be incompetent calling for resignations.
It is a wonderful opportunity for deflection with less notice of how incompetent and deserving of being fired Congress is. If Congress can keep finding things to point fingers at then fingers won’t be pointed at them.
Congress is the most ineffectual institution in this country yet we don’t fire them. Incumbents are almost always re-elected and the coming House election will not be much different.
People complain incessantly about Congress, but repeatedly re-elect their congressmen which is the definition of insanity.
Both political parties have been working to successfully insulate themselves from the ire of the voting public for some time. Congress has single-digit approval ratings, but as a body will stay on the job.
It has this democracy thing well managed through gerrymandering and incumbency.
The Political Advisory Committees lead public opinion where those who purchase the ads want it to go. I am not all that impressed with how well our democracy is working.
Voters seem to somehow shirk responsibility for the government that we have when they are indeed primarily responsible for it. The failure here is derived from the electorate.
While I have been as disappointed as many others over many decisions made by the Obama administration, it did shepherd this economic recovery which was one of its primary responsibilities.
Likely the biggest surprise from the market reaction to the positive monthly jobs report was the failure of the bond market to respond negatively to it.
There is still no inflation which was one of the benchmarks for Fed tightening. The dollar soared which is bearish on commodities and is deflationary. Gold led the way lower. The U.S. economy is outperforming virtually every other economy in the world right now.
The U.S. economy is still strengthening, while there are big problems with Europe, Japan, Brazil, India, Russia and China where economies are slowing. The Fed is on a path toward withdrawing liquidity, while the central banks in the rest of the world are adding liquidity.
That is causing inflow into the U.S. dollar. Dollar strength, if it continues, is going to be a major problem to the farm sector.
The farm sector performed very well when the rest of the economy was struggling, but may now struggle even though the U.S. economy is improving.
David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.
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