The Fisherian common sense

If you are looking for statistical verification of the malaise that was afflicting the U.S. economy, go back and read last Thursday’s excellent op-ed by former Senator Phil Gramm and Michael Solon in the Wall Street Journal. They documented the fact that “Economic growth during the (past eight) years averaged an astonishingly low 1.47%, as compared with the 3.4% average throughout all of the post-war booms and busts before 2009.” They pointed out that in the recovery from the recent recession, “real growth in gross domestic product – our nation’s output – averaged 2.1% per year, less than half the 4.5% average during previous recoveries of similar duration.”

Mind you, these anemic growth rates followed a devastating downturn that crippled employment and depleted the savings of the vast majority of Americans. As we approached the election, we were indeed in the throes of what many economists described as “secular stagnation”. Small wonder that voters took a risk with a change agent who offered hope of relief. And with change agents that ran the table not just in the Electoral College but in the lower and upper houses of Congress, governors mansions and state legislatures, 27 state attorneys generals offices and a majority of counties across the land. The choice was between a candidate and a platform advocating more of the same and one who offered to provide relief by changing gears entirely.

Changing the gears of a ship of state as large as ours is not easy. Yesterday, the Wall Street Journal and NBC released a poll with a startling statistic: when asked if government should do more – more – to solve problems and help people needs, 57% of the respondents said “yes”, while less than 49% said “no”, that initiative should come from individuals themselves and businesses.

In the same issue of the Journal, there is another poll reported, this one from the Washington Post, that declares President Trump “the least popular president in modern times.” And yet if you read the fine print of those poll results, while almost half of those polled said they had voted for Mrs. Clinton in November, only 40% said they would do so again. Despite the President’s high disapproval rating and much-reported problems in getting things done in his first 100 days, he would still win the election if it were held today. [Link]

Those are extracts from a speech delivered by Richard Fisher, former President of the Federal Reserve Bank of Dallas in April 2017.

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