I spent some time over the break reviewing my work as a columnist for The Eastern Echo, which has been decent, but my arguments have not always been as persuasive as desired. I also realized I’ve often used my space in the publication to fire attacks on the Republican Party from the opposite side of the political spectrum.
I’m in the mood for reflection, so, I want to offer a critique of the Democratic Party’s approach to macroeconomic policy and the U.S. economy. However, after this, I plan to restart my fusillade on Speaker of the House John Boehner (R-OH) and Sen. Min. Leader Mitch McConnell (R-KY).
My assessment will follow three areas of public-policy: the Fannie Mae and Freddie Mac, the Patient Protection and Affordable Care Act of 2010 and the corporate tax rate in the U.S. As a side note, my views on economics have been influenced by economists Milton Friedman, Paul Volcker, Joseph Stiglitz and Paul Krugman.
The economic prescriptions ordered by the Democratic Party, many of which were influenced by John Maynard Keynes, have been a cacophony of populist ideas and a mixture of uppers and downers – more economic stimulus, now austerity!
Most noticeably has been the absence of any kind of underlying philosophy, sans the tenet certain services and responsibilities should be carried out by the public sector rather than the private sector. But the failures of this concept
can be observed in the in the aftermath of crash on Wall Street.
Now, I certainly don’t believe the U.S. government caused the crash; more specifically I don’t believe Fannie Mae and Freddie Mac caused the crash.
Technically, Fannie Mae and Freddie Mac aren’t a part of the U.S. government – they’re government-sponsored entities. The Office of Federal Housing Enterprise Oversight oversees the companies, and both are publicly traded on the New York Stock Exchange.
But in Sept. 2008, the distance between the U.S. government and the two companies closed, as they were seized by the Federal Housing Finance Agency.
Unfortunately, before this the Democratic Party was as enthusiastic as President Bush and his administration in touting homeownership for those who ordinarily wouldn’t be able to get a loan from banks. Sounds populist, doesn’t it?
I don’t want to mince words – Fannie Mae and Freddie Mac are failures. As a consequence of their failures, specifically as bad actors in a role the U.S. government should never have tried to play, taxpayers might be on the hook for the companies’ toxic assets, and homebuyers are likely to be punished with higher interest rates.
In another instance where there was the attempt to have the public sector supplant the private sector – a case where I support it – the attempt by President Obama to reform health insurance and care was woefully a pusillanimous attempt at what President Truman and President Clinton tried before.
I wanted a public insurance option, as did most liberals, as did most Americans – 57 percent – according to a poll by The Washington Post conducted in Oct.
2009. Instead, President Obama and the Democratic Party settled for the orphaned brain-child of the Heritage Foundation, which proposed the idea for an insurance mandate only a decade or so earlier. All this did was force Americans onto the balance sheets of insurance companies, and leave unanswered the questions of access and affordability.
Lastly, the corporate tax rate needs to be lowered from 35 percent to 26 percent. I know the idea kind of disrupts the narrative of the richest of the rich and multinational corporations needing to pay their fair share, but the U.S. needs a tax code more in line with the international community.
This doesn’t mean the Democratic Party needs to accept every demand of the U.S. Chamber of Commerce, but this is an area where they can find commonality with the Republican Party.