In this week’s election, Democrats attempted to label Republicans as “the party of ‘no.’ ” Instead, voters labeled Democrats as the party of no jobs, no growth and no clue.
As a political strategist for Bill Clinton, James Carville coined the now over-used phrase, “The economy, stupid.” (which more commonly appears as “It’s the economy, stupid.”). By focusing on the economy, Bill Clinton won the 1992 presidential campaign, defeating President George H.W. Bush. 
More than 20 years later, it’s still the economy, stupid. According to Bloomberg, “The economy was voters’ most pressing concern as they cast their ballots in the midterm election, with seven of 10 rating conditions poor, preliminary exit polls showed.”
Apparently, voters didn’t realize that 2% annual growth and a workforce participation rate of 62.7% represent an economic boom.
In a Gallup poll, climate change, the Democrats’ raison de vivre, ranked 14th out of 15 in a poll about issues that worry voters. It finished just ahead of “race relations” and just behind “the quality of the environment” – two other big issues for Democrats. Meanwhile, in the real world, the top voter worries were “the economy,” followed by “federal spending and the budget deficit.”
Ignoring the Economy
You’d think it would be obvious since the Great Recession began in 2007 that the economy is the most important issue to voters, but you wouldn’t know it based on the actions – and inactions – of President Obama and Congress.
If you’re at all surprised by this week’s election results, take the following test. Name one thing that President Obama has done to improve the economy since the 2007 financial crisis. Name one thing that Congress has done to improve the economy over the same period.
Can you do it?
You may suggest the American Recovery and Reinvestment Act of 2009, which allocated nearly $800 billion to “stimulate” the economy. But most of the money was allocated to entitlement programs, adding to the federal debt without having any noticeable positive impact on the economy.
About $224 billion went toward extending unemployment benefits, which some would argue hurt the economy by encouraging people to delay looking for employment. That’s more than four times the $48 billion that went toward infrastructure improvements.
The one piece of legislation that may come closest to being designed to help the economy was The JOBS Act, for Jumpstart Our Business Startups, which was approved in 2012 to help the economy by stimulating the growth of startups. Among other things, it was supposed to enable startups to use crowdfunding to finance their businesses, but the Securities and Exchange Commission took more than a year to write the rules and the public comment period didn’t end until February 2014.
Even with the SEC finally taking action, it’s unlikely that crowdfunding, with a $1 million limit per business imposed by law, will provide much of a boost to the U.S. economy.
And the JOBS Act should be weighed against everything that was done to stifle economic growth – passage of the Affordable Care Act, the Dodd-Frank Act and the Foreign Account Tax Compliance Act (FATCA); creation of the Consumer Financial Protection Bureau; new regulations dictated by the U.S. Environmental Protection Agency; appointment of anti-business officials and more.
The Democratic Party, which controlled the White House and the Senate, deserves most of the blame for ignoring the economy. Not to defend Republicans, but under soon-to-be-former Majority Leader Harry Reid’s leadership, any legislation that reached the U.S. Senate became a dead letter. Talk about the “party of no!”
A Fish Tale
Many regulations are also being broadly interpreted by regulators, who may soon be fining Americans for wasting air by breathing too heavily.
If you think that’s an exaggeration, consider the poor fisherman in Florida who was charged with violating Sarbanes-Oxley’s anti-shredding provision, which carries a maximum sentence of up to 20 years in prison.
A Florida Fish and Wildlife Commissioner determined that 72 of the approximately 3,000 fish on his boat were undersized, but when his boat reached shore, federal agents counted only 69 undersized fish. So what was the fisherman’s crime? Allegedly “shredding” three fish! Incredibly, the case is going to be heard by the U.S. Supreme Court.
Putting the Fed in Charge
Defenders of President Barack Obama have said that he’s such an intellect he becomes easily bored with trivial matters, such as the economy, which explains why he’s ceded economic issues to the Federal Reserve Board. Doing so has enabled him to focus on more intellectual pursuits, such as working on his golf swing.
As Daniel Henninger wrote in The Wall Street Journal, “The Obama economic policy has had essentially two prongs: 1) the 2009 stimulus bill’s Keynesian Multiplier (the government spends, and new jobs appear); and 2) let the Federal Reserve figure out the rest.”
The Fed never did figure it out. And if there’s a bright side to the income-destroying economy of recent years, it’s that Keynesian economics may finally be relegated to the economic dustbin.
As for the Fed, Camden Fine, president of the Independent Community Bankers of America, said, “If the Republicans take control of the Senate and thus have control of both the House and the Senate—two words for the Federal Reserve: Watch out.”