As oil and gas prices head to new highs, we're hearing more calls from the President and his media minions about how this is all the fault of Wall Street investors.
On "Fox News Sunday," the Weekly Standard's Bill Kristol said the two biggest speculators who have damaged the U.S. economy are President Obama and Federal Reserve chairman Ben Bernanke (video follows with transcript and commentary):
MARA LIASSON, NPR: The Republicans are seen as better able to handle the deficit. The deficit has been a Republican issue. Now the president is playing on their turf and trying to reframe the debate, not from how much do you cut the deficit, but how do you go about cutting the deficit?
And I think that one of the reasons that people's pessimism about the economy and the overall right track/wrong track numbers are so bad is because the deficit is the definition of pessimism about the future.The long-term outlook for the country, Standard & Poor's came out this week and showed they were pessimistic. You've got Warren Buffett saying don't invest in long-term dollar-based assets. I mean, that is part of why people are so pessimistic.
BILL KRISTOL, WEEKLY STANDARD: Juan mentioned speculators before. The two biggest speculators who have damaged the U.S. economy are Barack Obama, who speculated on the huge stimulus package, which has boomed the deficit. We now have $3.6 trillion of deficit under Obama, which has really created a huge fiscal problem for us. And Ben Bernanke, who did quantitative easing, a second quantitative easing with $600 billion.
CHRIS WALLACE, HOST: And explain what that is.
KRISTOL: And that was buying up government bonds, government paper, to try to stimulate the stock market, which he did a little bit with a little bit of a --
WALLACE: And lowered interest rates.
KRISTOL: And he's kept interest rates at zero percent.
So, we have had a wildly stimulative fiscal policy and monetary policy. Growth is slowing down anyway. It has been a total failure.
I think the key for Republicans, in my view, is to run comprehensively against the Obama/Geithner/Bernanke policy -- fiscal and monetary policy -- and say the whole Keynesian model has failed. This has been a perfect test of it, this is what --
WALLACE: So that's the bumper sticker, "Keynes was wrong"?
KRISTOL: Yes. Obama and the Washington establishment was wrong, including, incidentally -- I think with Geithner and Bernanke, who were holdovers from Bush, a populist Republican running against the entire establishment, understanding that more government spending and unbelievably cheap money depreciating, debasing the dollar, that that is the way to make America strong, that is the wrong model. And I think Republicans need to articulate an alternative model, as Reagan did, to come back to this, in 1979.
I don't completely agree with Kristol when it comes to monetary policy. Low interest rates are essential until job growth signficantly rebounds.
However, quantitative easing has clearly failed to stimulate the economy while adding further to the dollar's decline as well as driving commodity prices and inflation higher.
Obama's Keynesian spending has also been a disaster. What's worse is history has consistently shown this concept to be a failure, and it should have never been tried again.
Not only didn't it work in the '30s during the Great Depression, but America's best economic periods in the modern era have been when government restrained spending rather than exploded it with reckless abandon.
Sadly, Americans continue to repeat failed history rather than learn from it.
Why is that?