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The State of the Economy is Alarming
Byron Williams
Listening to the president during the State of the Union address, one would have thought the economy is doing great and all that is required to insure permanent growth is permanent tax cuts.
The president's alternative universe soliloquy belies some economic truths that cannot be dismissed by thunderous partisan applause.
The state of the economy is alarming.
If the Gallup poll bears any reflection on the national pulse, what the president said at the State of the Union and how the people actually feel about the economy do not quite match.
The recent Gallup poll indicates that 55 percent of Americans rate the economy as "poor" or "fair" and 52 percent expect it to get worse. Moreover, the distressing news about the less than stellar GDP growth only reinforces the public's concerns.
Up to now, the administration has tried to address these worries by trying to persuade the American people that they are unfounded - and that the economic indicators tell a much more hopeful story than the polls show.
According the Economic Policy Institute, the 2 million jobs created in 2005 represents a modest 1.5% growth, less than half as fast as the average for this point in past recoveries. When one adds the accelerated inflation, due largely to rising energy prices, it translates into a realized pain that no economic indicator can offset.
Furthering the economic concern is the recent EPI report that demonstrates in state after state, regardless if they voted blue or red, the trend is practically the same: the highest income families are realizing an increase in wages, while poor and middle income families are staring at stagnating or declining wages.
Since when did our economic growth depend on ones position in the income scale? According EPI Senior economist, Jared Bernstein, this trend represents an "unprecedented gap between the growth of the typical family's income and productivity." Adding, "It is our most pressing economic problem."
Turning around these current trends will require more than a Pollyannaish economic report during State of the Union address, offering permanent tax cuts, or giving lip service to reducing our dependency of foreign oil.
I appreciate the president addressing the issue but what does it mean substantively to reduce our dependency of "Middle Eastern oil"? The United States top 5 oil importers are Canada, Mexico, Saudi Arabia, and Venezuela.
I would have like to have seen the president adopt the philosophy of the Apollo Alliance, which is committed to rejuvenating the nation's economy by creating the next generation of American industrial jobs.
Why not propose a project utilizing Ford and General Motors, providing financial incentives to become the global leader in creating cars that use alternative fuels?
Since healthcare is 16 percent GDP, why not also expand Medicare to the employees of Ford and GM? The United States must follow the lead of every other advanced country in world by taking healthcare out of marketplace.
Ford's recent announcement that it will cut up to 30,000 jobs over the next six years is much a commentary on escalating healthcare cost as it is their inability to produce a quality product.
Such a project could be funded by a windfall profit tax on oil companies, who seem to enjoy an annual occurrence of record profits. The president could realize additional resources by also allowing his tax cuts to sunset.
This has the potential to create a new wave of manufacturing jobs as well as looking at new ways to provide health care.
Underlining our current economy are some very serious trends that, if unchecked, could have a long-term catastrophic impact. Advocating for the tax cuts to be permanent or cut the services of those who cannot afford high priced lobbyist will not solve these problems.
We are at a moment that requires non-traditional, out-of-the-box thinking. So far all we have seen is an administration that sees tax cuts as its only tool.
We can only hope this time around will be different. But as the axiom goes: If your only tool is a hammer everything looks like a nail.