Obama’s Economics Hurt the Poor

In the article below, Valerie Jarrett, President Obama’s closest White House advisor, argues that Democrats help the poor while Republicans just stand in the way.

There are two things that would help the poor the most. One would be a thriving economy creating millions of new jobs. What this requires is a functioning market price system, and almost every single thing the administration does undermines the free price system.

Of course the Federal Reserve is even more to blame. Its chronic money printing is designed to manipulate interest rates. The result is that the interest rates, which are the price of money, and among the most important prices in the economy, no longer signal what is happening to market participants. The result is confusion, imbalances between investment and consumption, imbalances between final prices and costs (which are also prices) all leading to chaos, and as a direct result, needless unemployment.

Money printing also leads to inflation, either inflation of asset prices, which benefits the rich, who have the assets, or inflation of consumer prices. This latter inflation is especially hard on, yes, the poor. The poor would benefit enormously if the productive power of the US economy were allowed to reduce consumer prices a few percentage points a year. But for Fed intervention, we could have reduced the price of goods bought by the poor by as much as half over the past few decades.

Instead the government clings to failed Keynesian policies which hurt rather than help the poor, while directing its newly printed money to Wall Street and its deficit spending to other supporters.

In short, to really help the poor, we don’t need more of Valerie Jarrett’s version of crony capitalism. We need radical reforms to eliminate it.

Click here for the article.