Paul Krugman wrote a column this week in The New York Times titled “Wasting Our Minds.” The column was basically a criticism of conservative policies that prioritized short-term budget issues over the future of the country and its economy: the young.
The candidates are up in arms about the economy, and right now, the most salient issue (especially for us) is student loans, which are about to double in July. Both candidates have said they support an extension of a law that keeps the interest rates on some student loans low, but Obama has captured the sentiment of it. Romney, as Krugman points out, isn’t very empathetic about the non-elite. He recently told students, “Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.”
Romney is an elite, no question about it. He’s a multi-millionaire with a political pedigree (his dad was a Michigan governor and Presidential candidate), and he lives in one of the richest states in the nation. Obama, on the other hand, has been touting his rags-to-riches story of being raised by a single mom and paying off law school loans until about eight years ago.
While Obama tries to project an image of helping out the youth with more federal aid and a safer economy to enter into, Romney is going for an image of strength. A robust economy with free enterprise and small government is the key to growing the workforce, he says. Otherwise, we’ll be like Greece.
So we’re back to the essential ideological argument that faces this year’s election: will big government, complete with stimulus money and federal aid, or small government, with lower taxes and a more balanced budget, spur the nation to recovery and economic stability?
But is this really the question that needs to be asked? Shouldn’t we be asking what has spurred job growth and economic vitality in the past? Of course, both sides use statistics and arguments to say their party has historically been on the side of a good economy. So what is actually true?
What’s true is that the President doesn’t have too much of an influence on the economy at all.
Congress holds the purse-strings, and the President simply approves or vetoes a law. He can state his opinions and rally the public around an issue (much like what he’s trying to do with the loan interest rate extension), but Congress has the real control over most economic policy.
This clip by seekingalpha explains how presidents affect the economy, but not in the way we think (or vote):
“Much of what a President can affect requires a “trickle-down” effect which may take years to for its impact to be felt. Presidents are politicians and not economists, but so often a boom or a bust is credited to the sitting President when there was little they actually did to create the situation…One of the wonderful things about being a politician is that when the day of reckoning comes, it is almost always someone else’s problem. In conclusion, voters should certainly be aware of each candidate’s economic philosophy and goals, but they must recognize that Presidents are one cog in the political machine. And politics rarely has an answer for a slowdown in the business cycle, inflation, or other economic challenges that are best solved by market forces. If a candidate tells you differently, don’t believe it.”
So really, while the economy is the biggest issue in nearly every election, and both candidates are vying for the public’s support of HIS way of directing the US back to prosperity, we really should focus on Congress. And, frankly, what the economy would probably be doing anyway thanks to nongovernmental forces.