Voldemort Economics

We've all heard of Voodoo Economics.

May I introduce Voldemort Economics.  It consists of dealing with our economic woes without mentioning the real problem.

Obama (and to a lesser extent, Romney) believes that the problem with our economy is confidence.  People are afraid to spend and business owners are afraid to expand.  It's sort of like FDR's tag line: "We have nothing to fear but fear itself."

But that simply isn't the case.  If that was the real problem we would have returned to normal when George Bush sent every couple $1,200 with instructions to go out and buy something.

As for stimulating business, Obama's trick to allow businesses to accelerate depreciation was a pretty good idea, but it was a one-shot deal that just gives a tax break early.

No, the real problem, the problem that must not be named, is that our money is worthless and we owe boatloads of cash to people who should be our competitors, if not our enemies.

Obama pays a bit of lip-service to bringing our jobs back home, but that is all it is.  Some days he talks of global expansion, but never isolationism.  To impact the balance of trade in our favor would require tariffs and embargoes...and tax breaks and regulation waivers at home.  No one's talking about such efforts.

At some point we will wake up to the fact that Fed manipulations of the interest rate (how much below zero can you go) and their Quantitative Easing are just not working.  They boost the stock markets but do nothing to actually fix the economy.  In fact, they are making it worse.

They have painted us into a corner by creating a dilemma where the thing we need (HIGHER interest to encourage savings) kills the golden goose of growth.  If interest rates go up, inflation will rise and businesses will stop borrowing.  But with the low rates we have today, people are forced to play the market to get any return at all.  That's fundamentally wrong and only proves that our money has no value.

So, watch for either candidate to talk about returning value to our money.  You're more likely to hear them call out, "Voldemort."

And we will continue to put our faith in the stock market, which is based on perception instead of reality.  By no means a firm economic foundation.