E-News 8/19/11

1) The Week Just Past: More of the Same from the White House

2) An Economic ‘Flight to Safety’

3) It’s About Time: Obama Administration Asks For Assad Resignation


The Week Just Past:  More of the Same from the White House

“The story in yesterday’s Washington Post had a familiar ring to it: ‘President Obama has decided to press Congress for a new round of stimulus spending and tax cuts as he seeks to address the great domestic policy quandary of his tenure: how to spur job growth in an age of austerity. Obama will lay out a series of ideas in a major address right after Labor Day...’

“To paraphrase another President, Ronald Reagan, ‘Here they go again!’

“Two years ago, the Obama Administration promised that their first ‘stimulus’ package, which carried a trillion dollar price-tag, would keep the national unemployment rate below 8%.  Officially, joblessness stands stubbornly at over 9% and if you count all the people who are underemployed or who have stopped looking for work, the ‘real’ unemployment rate exceeds 17%.  We all know someone looking for work, including many graduates who cannot find that all-important first job.

“Oh, and by the way, that failed ‘stimulus’ measure exploded the federal budget deficit and the national debt to crisis levels. 

“In his latest attempt to show he’s serious about jobs, the President spent three days this week on a Midwestern ‘bus tour’, trying to convince Americans in small towns that we need more of the same.    

“Well, we’ve tried that approach, Mr. President.  Enough is enough.  It’s time to move an action plan designed to foster an environment that is conducive to private-sector job creation.  Among its key components are tax reforms that broaden the base and lower the rates for everyone, while making the tax code more fair by closing loopholes.  We also need to empower small business owners and reduce regulatory burdens to get government ‘out of the way’ of our job creators and make America more globally competitive by opening new markets to American-made goods through free trade agreements like those we’ve negotiated with Colombia, Panama, and South Korea.

“Instead of more government borrowing and spending and higher taxes, these are the building blocks of an economy that will provide security and opportunity for current Americans and future generations.”

Rodney Frelinghuysen

Recommended Reading:  On his “bus tour” this week, the President again cited Warren Buffet’s now familiar argument that “billionaires and millionaires” are taxed too little.  For a closer look at what the billionaire is NOT saying, read “Warren Buffett's Tax Dodge: The billionaire volunteers the middle class for a tax increase” in Wednesday’s Wall Street Journal.

An Economic ‘Flight to Safety’

It was another week of wild swings on Wall Street.  But buried under all of the 24/7 media coverage of the last week, there were a number of additional reports worthy of attention. 

Last Tuesday, the Treasury Department sold $32 billion in 3 year notes at 0.5% yield -- the lowest ever for that maturity.  The very next day, Treasury sold $24 billion in 10 year notes at 2.14% yield, the lowest level ever recorded.  These records were set after S&P downgraded the U.S. debt.  NOTE: After.

On Wednesday, a report from MarketWatch and FactSet Research revealed that cash and short-term investments for 24 of the 30 companies in the Dow Jones Industrial Average surged 18% to $256 billion from a year ago.

So what does all this mean and what does it have to do with our top priority of creating private sector jobs?

It is clear that there is a “flight to safety” in the markets.  Gold (which set new records) and Treasuries benefitted from being viewed as safe investments.  For major companies, ready cash is the safest way to ride out whatever lies on the road ahead.

To be clear, there is no single explanation for what is causing this flight to safety.  Investors and businesses alike are clearly concerned about a double-dip recession, the sovereign debt problems (and their impact on banks) in Europe, and, yes, our own debt crisis here at home.  But it is also the case that policy uncertainty in Washington is contributing to the unease about the economy and the future.  People lack confidence in the economic policies of the Administration.

There is no doubt that it is critical that in the days and months ahead we do our best to minimize unnecessary uncertainty and adopt policies that will lead to economic security for the largest group of Americans possible.

Recommended Reading II: Now that we’ve started to get a handle on out-of-control government spending, there’s more work to be done.  Speaker John Boehner and House Majority Leader Eric Cantor outlined the challenges in this week’s USA Today.  Read “Mr. President, it’s time to get to work” here.

It’s About Time: Obama Administration Asks For Assad Resignation

The Obama Administration this week called on Syrian leader Bashir al-Assad to step down and announced new sanctions against his regime.

“I join the President in calling for Assad’s resignation” said Rodney, a member of the House Defense Appropriations Subcommittee and a liaison to the House Intelligence Committee.  “Syria has been an active supporter of international terrorists and a threat to United States interests and our allies in the region.  Assad's brutalization of his own people in Syria are extremely alarming.” 

Earlier this month, Rodney and a bipartisan group of House Members wrote to President Obama asking him to toughen existing sanctions against the Syrian regime.  “No government should be allowed to inflict such suffering on its people without a stern response from the United States and the broader international community” the letter said. 

You can read the entire letter here.