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Economic Crisis

For the Love of Keynes

As Henry Paulson recently stated, an economic crisis of this magnitude only comes around once or twice a century. I’m not exactly sure what the basis for such an argument might be other than looking at a sample size of… about one century. Whether there is merit in this assumption or not, we certainly are facing an economic crisis. In times like these, our government leaders look to policy experts and lessons of history - and possibly listen to them more than usual. This doesn’t mean they stop looking to lobbyists and the next election.

Ron Paul Discusses Alan Greenspan on CNN

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Dr. Paul laments Greenspan’s departure from the free market principles he once stood for and what effect the November election will have on the future of the Republican party.

Bernanke’s reappointment is in trouble

As was noted in this morning’s headlines, Jake Tapper is reporting that Senate Majority Leader Harry Reid (D-NV) may not have the votes necessary to confirm President Barack Obama’s reappointment of Federal Reserve Chairman Ben Bernanke:

Amidst the voter anger at Wall Street and Washington, D.C., ABC News has learned that the Senate Democratic leadership isn’t sure there are enough votes to re-confirm Ben Bernanke for another term as chairman of the Federal Reserve.

Bernanke’s term expires on Jan. 31.

The White House did not respond to many requests for comment.
[…]
Roll Call reported this week that at the Senate Democratic caucus meeting on Wednesday, “according to senators, liberals spoke out against confirming Bernanke for a second term. Those liberals tried to make the case that the White House needs to put in place fresh economic advisers to focus on ‘Main Street’ issues like unemployment rather than Wall Street concerns. Moderates were more reserved, senators said, but have similarly withheld their support for Bernanke.

Tapper also quotes from a statement from Sen. Reid:

The majority leader met with Bernanke earlier today and issued a statement saying that he believes “more pressure needs to be applied to banks to lend money to small businesses and keep more Americans in their homes.” Reid said that the “American people expect our economic leaders to keep Wall Street honest and level the playing field for middle class families, and I will continue to hold their feet to the fire to ensure this happens. As the Senate prepares to take up Chairman Bernanke’s nomination, I look forward to hearing more from him about how he intends to address these issues.”

The Government: America’s Biggest Employer

A recent Rasmussen poll revealed substantial support for small government amongst Americans:

Sixty-six percent (66%) of U.S. voters prefer a smaller government with fewer services and lower taxes over a more active government with more services and higher taxes.

Even if they prefer a small government, Americans are faced with a country in which the federal government is the largest employer and the pay afforded its employees dwarfs that of a private worker:

While many workers in the private sector have despaired of a pay increase in the past few years, Congress takes care of federal employees with annual raises, awarding 3.9 percent in 2009, 3.5 percent in 2008 and 2.7 percent in 2007.

The average pay for the nation’s 1.9 million federal workers is a little over $71,000, with the 372,041 federal workers in the Washington area earning an average of $94,047. The average salary for the nation’s 108 million private-sector workers is $50,028.

Government employees are often unionized and have infrastructure built to keep them from being fired even if they fail to perform their job functions. They tend to vote Democratic and their unions are among the biggest contributors to the Democratic Party. Is it any wonder then that the average American continues to face a vacant job market while a Democratic Congress provides increasing raises for federal employees?

 

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