In a very well written article, CNBC columnist and Professor Peter Morici explains why government inaction is hurting the US economy as it flirts with recession. Here is an excerpt:
“Lost exports [from a weakening Euro and Yuan] could easily slice $120 billion from U.S. GDP, destroy over a million jobs and raise unemployment to 9 percent—and a meltdown in Europe could trigger even worse conditions.
… Demand for U.S. products is burdened by huge trade deficits on oil and consumer goods with China—both result from government inaction.
Two years ago, President Obama warned China he could act if it did not abandon its cheap yuan policy, which he says slows U.S. growth, but he hasn’t taken substantive steps.
Imposed by the President and Congress, stiff restrictions and bans on drilling in the Gulf, off the Atlantic and Pacific Coasts, and in Alaska are reducing U.S. production 4 million barrels a day and doubling imports.
Monetary policy can’t compensate for those policy missteps.
… Wall Street banks continue to run casinos, but won’t make enough loans to regional banks or small and medium sized businesses—simply, trading securities creates million dollar bonuses, old fashioned lending does not.
… Chinese currency mercantilism, oil imports, expensive health care, and big bonuses on Wall Street are smothering U.S. growth.”
Blame it on the