Weekly Poll: It Takes A Woman To Stimulate...
... The economy. Or so you voters feel. You voted that Hillary Clinton was the Presidential candidate most prepared to deal with the economy.
One person left a comment this past week that pretty much said, "Doesn't the Fed control the economy?"
The answer to that is, "No. Sort of."
The Federal Reserve controls interest rates. In order to help stimulate the economy, they lower rates. However, this is a short-term thing.
The reason why the President matters to the economy is because they need to know how to balance trade policy, tax policy, and spending policy. These three things are critical in dealing with an economy.
Trade policy is dealing with other countries; import-export taxes, and regulations around trade with other countries. Tax policy deals the how much the government takes from you. Taxes can stimulate or stall the economy. Spending policy is how the government spends the money they take from you. Experience is needed to ensure American voters that there will be responsible and wise spending.
New poll is up for this week. Non-political though.
One person left a comment this past week that pretty much said, "Doesn't the Fed control the economy?"
The answer to that is, "No. Sort of."
The Federal Reserve controls interest rates. In order to help stimulate the economy, they lower rates. However, this is a short-term thing.
The reason why the President matters to the economy is because they need to know how to balance trade policy, tax policy, and spending policy. These three things are critical in dealing with an economy.
Trade policy is dealing with other countries; import-export taxes, and regulations around trade with other countries. Tax policy deals the how much the government takes from you. Taxes can stimulate or stall the economy. Spending policy is how the government spends the money they take from you. Experience is needed to ensure American voters that there will be responsible and wise spending.
New poll is up for this week. Non-political though.
Comments
Any President that actively works to lower the federal deficit will help to lower interest rates.
I suspect that a Democratic President—either of the two candidates—would show a stronger commitment to doing that than John McCain would. Although McCain strikes me as being more attuned to the harm that a bulging federal deficit is doing to our economy than the current White House occupant (he who shall not be named….) Sadly, he’s recently admitted he knows next to squat about how the economy works.
By reducing the deficit, we’ll reduce the rate of return on US savings bonds
(inducing lowered interest rates), forcing investors to find other ways to double their money. Those countries that use our bonds as collateral (i.e., China, Japan, India, Uganda) when securing loans from the World Bank or the International Monitary Fund would also be nudged into flooding our bigger and better run companies with capitol.
As the risk of turning the economic policies of an entire decade into a cliff’s note, in the 1990’s it was strictly stocks. In the last eight to ten years, its been all sorts of new fangled financial innovations—with hedge funds being the most popular of these new options.
The real challenge in the next few years for whoever’s running the joint will be to find a way to push foreign and domestic investors back into doing what they did in the 90’s. Clearly, Clinton has the edge in that regard. But, given all the new streams for investment capitol to flow through, perhaps a new outlook is best.
And wow! CT, I had no idea you knew so much about financial opportunities. And you're right... It does seem that Clinton does have the edge in terms of the economy, given the 1990s Clinton administration's ability to spend wisely... But it is hard to judge whether that was because the economy was on an up-swing naturally... Or due solely to the administration's ability to manage things properly.
It will be an interesting year, seeing how this all plays out. But McCain really shot himself in the foot... And didn't he say he would like the tax rate to be 0%?
In McCain’s defense, all the next the President will have to do is sign off on whatever his VP, Commerce and Treasury secretaries come up with. You already hear names like former Commerce Committee Chairman Dick Armey being tossed around as possible VP. And while his domestic policy views totally suck ass (my educated assessment), he’s awfully clear headed on the fiscal front, so we’ll be okay if Mac’s in the West Wing. Although—hate to be crude—I’m not sure how long he’ll live if he’s the one that wins this thing.
As for who should take the credit for the 90’s, I’d say pat the Bob’s—Reich and Rubin—on the back. They were the two who figured out how to best bolster the purchasing power of the dollar while reducing the value of our Bonds without throwing our interest rates out of whack (or increasing inflation). The idea had been on the table for a while, but those two convinced Clinton to take that route to recovery, instead of using the traditional Democratic roadmap to fiscal well being and raising taxes. Which also totally sucks ass.