It seems that the world is beginning to wake up to the economic situation. Mario Draghi at the European Central Bank (ECB) has finally decided to act, and act forcefully, by introducing quantitative (QE) to help prevent a downward spiral in the EuroZone. It may be too late, but at least we’re finally starting to see some movement toward a more sensible monetary policy. Paul Krugman, the Nobel laureate economist, has been screaming for this and other expansionary policies for years to prevent a meltdown world wide. Of course, the Germans, ever looking out for their own interests, are bellyaching about it.
President Obama has held America steady by ensuring that we have someone at the Federal Reserve who understands this and doesn’t let us slip into the same downward spiral being experience by European economies. The Fed has been using QE as an economic stimulus, over the shrill objections of Republicans, having been started by Ben Bernanke while he was the head of the Fed (2006-2014) and continued by Janet Yellen who took over from him in 2014. Republicans said that Obama was debasing the dollar and that QE would cause runaway inflation, which of course never happened. Deflation and a downward spiral into a depression was the real worry, and President Obama’s policies prevented that from happening in America and may well have prevented the world economy from collapsing. He would have done more to strengthen our economy if the Republicans in Congress would have let him.
Republicans haven’t want President Obama to succeed. When he first took office, the economy was in a downward spiral, and it appeared that it was possible that nothing could be done to prevent a complete collapse. This was the situation in 2008, just before Obama took office. Of course, Republicans have their “values” and one of them is abhorring all intervention by the Federal Government in the American economy. Obama also held as much ground as he could against damaging austerity programs Republicans wanted instituted. Obama saved us, but he didn’t get any credit for it.
And now the American economic recovery has set an example for the world to follow and that’s what Shinzo Abe is doing in Japan and Mario Draghi at the ECB by introducing QE in the EuroZone. Also, Greece, as a part of the EuroZone, has been subject to brutal austerity policies, but today Greece has a national election, and it appears that they may elect the leftwing anti-austerity Syriza party. The world is waking up to the fact that these conservative economic policies are on the verge of ruining the world economy.
All this being true, you might think that President Obama would be seen as our savior, that Democrats would be reveling in the president’s successes. But the Democrats are a cowardly bunch and have refused to support their own president, and even during the election just two months gone, stayed away from Obama. Republicans had convinced the American electorate that the president had ruined the economy and crippled America. It is the cowardliness of the Democrats that has let this happen. But President Obama is beginning to show more initiative and combativeness himself, and his popularity in the polls is increasing, so perhaps all is not lost.
So here come the Republicans again, and if they can get their man or woman in the White House, we could well see a complete collapse in the world economy that we have narrowly averted in recent years.