Blame what you like - government policy, 9/11, Iraq, the accounting scandals, the bursting of the dot-com bubble, corporate greed, whatever: The economy is enervated and suffering. Growth stands at only about 1.5 percent annually, compared with the 4 percent of 1996-2000 and consumer spending and corporate investment, routine contributors of 80 percent of growth, limp along. Unemployment has reached 6 percent, with statisticians fearing more than 2 million jobs have simply disappeared.
In three years the stock market has lost 40 percent of its value; the accompanying chart vividly shows the NASDAQ's recent trend lines eerily mimic those of the Dow at the height of the Depression; as many as 50 percent of Americans have lost as much as 80 percent of their savings. Nearly every state has spent itself into a financial hole. Stagnation is not limited to these shores but is worldwide, most notably in Germany and Japan.
As one analyst has noted, "The stock market's character undergoes profound long-term fundamental shifts that last many years." And truly, fundamental imbalances remain in the economy and financial markets; indeed the latter may have entered a phase similar to that of 1966-82, when market averages showed a zero return.
The Republican Congress is failing the Republican president - the economy generally and the public at large. This is not the moment for Republicans, traditionally more conservative, to sway to the rhythms of leftist demagoguery about certain tax cuts aiding "the rich." Rather, it is the hour for both targeted tax cuts and across-the-board tax cuts, combined with cuts in spending.
Investor's Business Daily advises that "this isn't some inventory correction that requires a little fiddling from the Fed and maybe a bit of goosing from Congress. It's a once-in-a-lifetime debacle that needs all the stimulus we've got, and then some, to get things back to normal." Nobel economist Milton Friedman famously summarized in six words the operative philosophy good for (nearly) all time - especially those times, such as this, when the goals are regained economic stability and confidence: (1) Cut taxes. (2) Cut taxes. (3) Cut taxes.
Otherwise, 18 months from now, those Gorean Kerry/Graham dreamers may have their fondest wishes fulfilled.