When Bill Clinton ran for president, the slogan inside his campaign’s war room was a blunt reminder to focus on “the Economy, Stupid.” This was Clinton’s first enduring contribution to the American stock of catch-phrases.
Now, Bill’s wife, Hillary, seeks the top banana position. But she has a harder job than Bill: he could fight against a lackluster incumbent caught in a big lie (“No New Taxes,” another slogan). Hillary is almost required to defend the outgoing president, in no small part because she served in his Cabinet.
If she were candid, she’d address the weak recovery and long-term stagnation.
Her slogan could be, “It’s the Stupid Economy.”
No matter what politicians say, however, secular (long-term) stagnation is a thing. Lots of people have given up, are off the roles of job-searchers and so don’t appear in official unemployment statistics, and too many people have taken early retirements on trumped-up disability claims.
At least, economist Lawrence Summers is decrying it, jet-setting around the world to meet with financial leaders and political functionaries.
I doubt his diagnosis, however. Summers talks Keynesian, pointing to inadequate aggregate demand. While there may be something to the general shift in the desire to hold monetary assets, leading to deflation and even negative interest rates, I bet the underlying problem is regime uncertainty — when widespread fears of the future and doubts about governmental consistency and follow-through lead the owners of capital to withhold investing in production.
There are also the effects of general regulatory and redistributionist kludge.
When the problems stem from your favored policies, you can’t revive FDR’s slogan “nothing to fear but fear itself” and let it go at that.
Hillary will surely explain — Thursday night.
This is Common Sense. I’m Paul Jacob.
