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When I lived in Norfolk, a quarter of a century ago, the place took a direct hit from a Category I hurricane.
I don’t recall the name of the storm now. What was memorable was that the hurricane’s eye passed right over us. The storm raged for a while with wind and rain, then it all calmed down. The sun came out and everybody in the neighborhood came out and walked around to see what had gotten knocked over. It was very still and very humid — tropical humidity unlike what we normally experienced in a Tidewater summer. A couple of big trees had been knocked over and power was out, but no houses were damaged.
Of course, we all knew what this was and that Part II was coming. After some time, it clouded up and started to storm again after the eye passed.
I’m wondering if we are currently experiencing the eye of the economic storm that hit us two years ago. Gross Domestic Product (GDP) started rising last summer. States are seeing an uptick in corporate tax receipts and unemployment has stopped growing. Las month, the economy added 162,000 jobs.
On the other hand, federal government hiring for the census accounted for a third of those jobs, and those are only temporary. Unemployment remains stuck at 9.7 percent, the level President Obama said, last year when he was selling his stimulus bill, it would reach if the government did nothing. State income tax receipts are not doing well, reflecting the loss of income that private sector workers have endured. Most Americans remain head-over-heels in debt.
The recovery is fragile and most economists believe it will remain sluggish well into next year. The Business Cycle Dating Committee, a part of the National Bureau of Economic Research that officially proclaims the beginning and ending of recessions, isn’t sure it can officially pronounce the recession as having ended. Some worry that continued unemployment will drag the economy under again. After all, people who don’t have money don’t buy goods and services.
We may be in the eye of the storm, a period of calm before The Great Recession, Part II slams us.
In spite of this, President Obama and the “Democrats” seem ideologically determined to do things to make matters worse. ObamaCare, signed into law last month, has not yet had time to bite and the most likely near term result will be a rise in insurance premiums as the new legislation begins messing with the insurance companies. Such a massive piece of legislation, more than 2,000 pages, is sure to be chock full of all kinds of unintended consequences.
Worse, however, would be a substantial spike in energy prices. This is something that President Obama and the “Democratic” Party’s leftist leadership are deliberately trying to engineer. High energy prices are how they plan to save the world from global warming, even if it kills us.
Raising energy prices is the idea behind cap and trade as well as the Environmental Protection Agency’s threat to regulate carbon dioxide as a pollutant. High energy costs reduce carbon dioxide emissions by discouraging energy consumption. The electric rates you experienced last winter, as well as the high gasoline prices we all paid two years ago, are a taste of how President Obama plans to save the planet.
Ratcheting up energy prices is a good way to wreck a fragile economy. While reducing energy consumption, it will also suck money out of our pockets, leaving most of us with a lot less to spend on everything else.
It would have been nice if President Obama had spent his political capital on something that made sense, such as financial reform. Unfortunately for all of us, he didn’t choose to do that and we’ll all suffer for the decisions that he’s making.