And more of that may be in store. "The smell of trade war is suddenly in the air," writes The Wall Street Journal, and Global Trade Alert reports that 130 protectionist measures are ready to be implemented by countries around the world. Are we seeing a repeat of the job-destroying protectionism that followed the Smoot-Hawley tariff of 1930? It's starting to look like it.
Then there are the additional burdens on the private-sector economy that would be piled on by the congressional Democrats' health care bills and the cap-and-trade legislation passed by the House in June. In the job boom of the middle years of this decade, these policies looked like something we might be able to afford. They look less like that now.
Meanwhile, it's plain that consumers are not going to spend money anytime soon at the rates they did when their house prices were bubbling up and that the $787 billion stimulus package passed last February was not -- how to put this? -- optimally designed for job creation.
The Obama administration, along with the Federal Reserve, deserves credit for stabilizing financial markets. But administration policies have put us on the path to increasing the national debt from 40 percent to about 80 percent of gross domestic product -- a level we haven't seen since the years just after World War II. Interest rates are low now, but when they rise it's going to take an uncomfortably large chunk of federal revenues just to service this debt.
"After the health care debate ends, and whatever its outcome may be," writes William Galston, deputy domestic adviser in the Clinton White House, "the administration and congressional Democrats would be well advised to turn their attention back to the economy and ask themselves whether there is anything more to be done to jumpstart job creation."
Good advice, but why wait? The Office of Management and Budget now projects unemployment at 9.7 percent, the same as last month, in the fourth quarter of 2010, when the off-year elections take place. Maybe the administration and congressional Democrats should consider job-creating rather than job-destroying policies right now.
Michael Barone
Michael Barone, senior political analyst for The Washington Examiner (
www.washingtonexaminer.com), is a resident fellow at the American Enterprise Institute, a Fox News Channel contributor and a co-author of The Almanac of American Politics. To find out more about Michael Barone, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
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