I am truly fed up with our current climate in Washington and my wrath extends to both political parties as well as to the media that reports their actions.  Much has been made of the responsibilities that one party or the other holds for the current state of the economy.  I’d like everyone to consider the following:

In the last 30 years we have moved from horrible recession coupled with hyper inflation that consumed the Carter administration and was inherited in 1981 by the Reagan administration.  Reagan cut taxes and more than doubled revenue building an era of prosperity that was alive through the end of his term and into the Bush (41) administration.  But Bush (41) increased taxes and engulfed us in a minor recession, a recession made somewhat worse by an increase in taxes by the Clinton administration.  A new Congress came to town in 1995 that enacted welfare reform and threatened a balanced budget amendment.  Tighter controls on spending resulted in prosperity again that lasted through most of the remainder of the Clinton years.   In the waning years of the Clinton administration recession again loomed.  Bush (43) cut taxes in 2001 and we began to leave that recession behind and would have except for 9/11 and a lack of control over Republican spending.  Eventually the recession did end and despite 9/11 we came out of recession during the Bush (43) administration with 4% unemployment and 4% and lower interest rates and next to zero inflation.  In 2006 another new Congress came to town and the last two years of the Bush (43) administration was marked again by a deeper recession that was then inherited by the Obama administration.  Each of these administrations was marked by periods of both recession and prosperity.  Also accompanying the recession inherited in 1981 by Ronald Reagan was high super-inflation that has been kept relatively stable since then but promises by current economic decisions to raise its head again soon.  So, what is different during these periods?  Why would the Bush (43) eight-year term of office have been marked with low inflation, low unemployment and high prosperity only to give way in the last two years to rising unemployment , recession and the promise for higher inflation in our near future? 

It was the Congress!

Barack Obama is no more directly responsible for the entire calamity that faces our nation today than Ronald Reagan was in 1981 or that George W Bush was in 2001.  Let’s look at the Congress during this same period.

The Congress was controlled almost entirely by the Democrat party from the early 1950’s until 1994.  There was a brief period during the Reagan administration during which Republicans controlled the Senate but never with a filibuster proof numbers as the Democrats enjoyed from January 2009 until early 2010.  George H.W. Bush (41) broke a campaign promise made in 1988 that resulted in a recession.  It may have been a compromise he made with the Congress to achieve something else but that very act alone was probably responsible more than anything else for causing the economy to slide into a small recession and it certainly cost him the 1992 election. 

When Clinton came to power in 1993, his original push was for healthcare reform similar to that which is being debated today.  This promised to extend the recession because of the unpredictability this presented employers.  Without the knowledge of what healthcare reform was going to cost employers, the job market dried up in 1993 and unemployment increased.  Clinton passed a tax increase by a 51 – 50 vote of the senate with Vice President Al Gore casting a tie-breaking vote.  The measure included the taxation of Social Security benefits and the recipe was there for continued recession.  This is a lesson that seemingly is never learned by some in government, you don’t end recession by taking more money out of the economy to enable the Government to finance entitlements. 

In 1994, a Contract with America was signed by Republicans seeking Congressional office and Republicans took control of both Houses of Congress.  There was not full control of the Senate given the ability for Democrats to filibuster but the House was under full control of the Republican Party.  Welfare reform was passed and the very threat of a Balanced Budget Amendment caused the Congress to rein itself in and control some of its costs.  Republicans were then criticized for taking food from the mouths of children and they were accused of threatening the stipends of those on entitlement programs, not for cuts they were making in actual programs but for reducing the amounts of increase in those programs to something less than was promoted by the Democrat minority.  Nevertheless, prosperity returned in the mid and late 1990’s but recession followed due in my opinion to a Republican Congress that failed to live up to its ideology and that began to spend beyond what they had promised in their conservative agenda. 

George W. Bush inherited this recession and immediately called for a tax cut.  As happened in both the Kennedy and the Reagan administrations, the tax cut ultimately ended the recession.   Neither Kennedy nor Reagan had to deal with an attack like that on 9/11 but the tax cuts clearly reduced the impact of the September 11 attack on this country and ultimately pulled us completely out of the recession.  The majority of the period from 2002 until 2007 was marked by prosperity.  In 2005 and 2006 economists had to redefine what it regarded as full employment.  In the past, economists had considered unemployment rates just above 5% as representing full employment, recognizing that a certain amount of churn always exists in the labor market.  People leave jobs and move on.  Students graduate and join the labor market.  These things resulted in a 5% rate during what was considered to be a full employment economy in the past as the rate was primarily composed of people who were only unemployed for a short period of time or who were not actively seeking work.  During the period 2002 until 2007 the unemployment rate got down to between 4.4 and 4.5%.  In 2005 and 2006 the rate remained consistently below 5%.  What happened then in 2007 that changed the unemployment rate and cause this job measure to increase to 7% at the end of 2008 and to 10.2% in 2009? 

When people go to vote they must recognize that the President does not control the economy without the support of the Congress.  The President can use the bully pulpit as Ronald Reagan did in the early 1980’s to get a recalcitrant Congress to enact legislation.  Reagan went to the people and got the people to pressure their representatives to enact his legislation.  As a result, the conservative agenda resulted in prosperity during the last several Reagan years.  Bush (41) violated conservative tenets and created a recession in his term.  He approved a Congressional plan to raise taxes and this drove him from office in 1992.  Clinton had the support of Congress in 1993 and 1994 and he raised taxes making the recovery from the Bush recession stagnate.  To Clinton’s credit however he was a pragmatist.  His failed policies and his push for socialized medicine in 1994 resulted in a Republican Congress in 1994 that dragged him kicking and screaming toward both welfare reform and a balanced budget but he did sign that Welfare Reform bill.  Prosperity reigned again until the last year of the Clinton administration.  When Bush (43) inherited a recession in 2001 he immediately adopted a new economic policy that cut taxes through 2010 leaving money in the private sector for businesses to spend on new equipment and new employees.   Prosperity was in obvious abundance until 2007 when Radical Progressives took control and they began a downhill slide that included such economic failures as Fannie Mae and Freddie Mac.  Legislation that had been pushed beginning with the Carter administration for “affordable housing” and that had resulted in more people owning their own homes suddenly came into difficult times because banks were being incentivized to make loans to people that could not afford them and Fannie Mae and Freddie Mac were purchasing these loans from these banks leading them and us into a financial disaster.  At the end of the Bush administration a stimulus bill was passed under the belief that somehow government could borrow and spend itself into prosperity.  If anyone believed then that this would work and still believes it, just look at the result.  Hundreds of billions have been spent to stimulate the economy with no results.  Only a small portion of that money was actually spent in the first two years despite the cries that there was no time to read the bill and the Congress had to vote on it now.  Still, of the money actually spent, nothing has resulted from it.  Unemployment increased more.  In early 2009 the Obama administration presented its own stimulus plan to the Congress and it too passed as emergency legislation with no results.   The last stimulus bill appears to have only provided enrichment to Obama’s political cronies.  Thousands of earmarks were included in that legislation as payoffs to persons and companies that had helped House and Senate members get elected.  The unemployment rate was promised to be held at 8.5% if only Congress would act immediately.  It did and the unemployment rate went to 10.2% and is still hovering just under 10%.  The economic policies of this Congress that are supported by the Obama administration include Cap and Trade legislation that promises to multiply, perhaps exponentially, the cost of all energy consumption and that will result in higher personal energy bills, higher costs to manufacture, higher costs to ship product to market and higher unemployment.  The current monetary policy has resulted in printing of new money to monetize the debt.  Simply put this revalues the dollar to something less than it was worth before and the value of the dollar has lost something like 19%.  It isn’t known what these economic and monetary policies will cost the producers in this economy and as a result employers wait to see before they do any hiring.  Environmental legislation that has long since exceeded its original mandate to clean the air, the land and the water now provide preference to minnows trapped in irrigation pumps.  Utter lunacy in California has created unemployment in California’s San Joaquin  Valley, destroyed the businesses that feed America and chased Americans from their jobs and into food lines and unemployment lines.  Our preference for the spotted owl prevents foresters from harvesting trees and many workers in the Pacific Northwest are harvesting unemployment checks instead of our nation’s abundant natural resources.  Environmental studies and licenses prevent mining companies from tapping the nation’s abundant mineral resources and the same environmentalists prevent off-shore drilling for oil as well as drilling in our Arctic regions of Alaska for known oil supplies that could help this country be more energy independent. 

The current healthcare proposals known as Obamacare are more truly the designs of Radical Progressives like Nancy Pelosi and Harry Reid.  At least the legislation moving through the Congress is out of synchronization with the promises Obama made during and since his successful presidential campaign.  Either he is lying or they are not listening to what he is asking them to enact.  In any event, the promise for extensive increases in the cost to provide healthcare insurance to employees results again in the nation’s employers sitting and waiting to see what will happen before they begin to hire again, if they ever do. 

This is madness.  It is the Congress that must be reined in.  We can live with a foolish president such as the one we have now as long as we don’t have a foolish Congress at the same time.  The example we did not learn from was the Carter administration.  Carter was a foolish president with a foolish Congress and the late 1970’s were a disaster marked by double digit inflation rates, double digit interest rates and high unemployment.  Home mortgages were at 13, 14 and 15%.  A new index was created, the Misery Index.  It combined interest rates, the unemployment rate and the inflation rate.  Similarly, since the beginning of 2009 we have a foolish president with a foolish Congress.  It is in 2010 that we have the opportunity to change this and this we must do. 

The powers of the Congress and the President are enumerated in the Constitution in Articles I and II respectively.  The President may only “recommend for Consideration such Measures as he shall judge necessary and expedient”.  He has no power beyond this to effect taxation or spending.  All of the president’s actual powers are included in Article II.  Everyone should read the Constitution and become familiar with the limits that are in place and compare these limits to the powers that our current president and previous presidents have assumed.  Article I identifies the true powers of the Congress.  Periodically I intend to discuss some of these to illustrate how this and prior Congresses have stepped beyond their Constitutional limitations to pass legislation that currently burdens us today and that were never considered to be within the province of that group.  Article III identifies the makeup and the power of the courts.  These too should be reviewed and understood. 

It is only if we remain ignorant of our Constitution that these three branches of government will be able to usurp their authority and deny citizens their liberty.