It Isn't Complicated

Dean Baker:

The world doesn't work that way. Firms create jobs when they have more demand, not because we are nice to their rich owners.

President Obama and the Democratic leadership have refused to put forward a serious alternative path. While they have been willing to argue that rich people should have to pay some taxes, they have not come to grips with the nature of this downturn, as if hoping that, somehow, the economy will just jump back to its pre-recession level of output through some magical process. There is no magic that will allow the economy to override basic arithmetic. In the short term, only the government can provide the boost necessary to support the economy. Over the longer term, we will need to get the trade deficit down through a more competitive dollar.

It's a simple story. But as long as people are obsessed with short-term, weather-induced fluctuations, we will not see a serious discussion of the underlying state of the economy.