Despite economic columnist Paul Krugman’s attempts to rehabilitate Barack Obama’s economic record, the fact remains that the current recovery is the most anemic since World War II.
The indecipherable regulations of Obamacare and Dodd-Frank and President Obama’s constant bashing of the private sector have so filled businesses with apprehension that they have been reluctant to take advantage of the Fed’s easy money policies and expand their operations. On the other hand, the November spurt in gross domestic product just might be due to increased business confidence after the GOP landslide, as well as the decline in energy prices due to America’s oil production boom, for which President Obama can take absolutely no credit.
Mr. Krugman doesn’t mention that the stagflation of the 1970s was largely a consequence of the easy-money policies he so enthusiastically endorses. The resulting monetary instability stifled business expansion. Paul Volker cured the runaway inflation by restricting the money supply. After two years of recession, the Reagan tax cuts, a stable dollar, and the opening of new overseas markets after the collapse of the Soviet Union combined to encourage businesses to invest.
Mr. Krugman’s assertion that “the Fed rules the economy” is simplistic nonsense.