Michael Schaus

Yeah, this economic recovery is pretty abysmal. And no matter how bad it might seem, it’s actually a little bit worse. Last week we learned that GDP actually showed a contraction in the first quarter of 2014. Pundits and politicos blamed the weather (because nobody was expecting snow in January and February), but in reality the numbers demonstrated that the prediction for an economic breakout was little more than propaganda.

Most economists, pundits, and investors have started to view these numbers through the political prism of Federal Reserve Policy (which I contend is actually more akin to a kaleidoscope); but the Fed might not actually matter that much anymore… Don’t get me wrong: I’m all for the idea of putting Janet Yellen out of work, I just don’t think such a move will suddenly create millions of jobs and bring prosperity back to the American economy.

Despite the fact that the Federal Reserve has been pumping trillions of dollars into the economy with their Quantitative Easing program, our nation has seen anemic economic growth. In real dollars, the Fed (mostly under the leadership of Ben “easy money” Bernanke) has injected about $2 trillion into financial markets. This money (according to people who read Keynes as if he penned the economic gospel) was supposed to increase liquidity in the system and multiply, thereby creating jobs and prosperity. According to the theory of that guy who once said “we’re all dead in the long run”, the free Fed cash was supposed to result in massive job creation, and intense credit growth…

Overpriced homes, new cars, and standard 9-5 jobs for everyone!

Of course, this hasn’t happened. In fact, despite the $2 trillion of “free” Fed monies, our ailing economy only managed to grow about $1.1 trillion in that same time span… So, to be clear: The Fed printed up $2 trillion worth of cash, and handed it to Wall Street. Stocks climbed steadily, and the economy only grew by half as much as the Fed had printed… This is apparently what happens when Liberals run the government.

Which brings us to the main point (I know, I know… “Finally”, right?):

Michael Schaus

Michael Schaus is communications director at the Nevada Policy Research Institute and is responsible for managing the organization’s messaging with the public, the media and NPRI’s membership.

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