- The Washington Times - Friday, March 25, 2011

ANALYSIS/OPINION:

Consumers are more depressed about the economy than they have ever been in the past three decades, according to a Reuters-University of Michigan consumer-confidence survey released Friday. The nosedive in the national mood is most striking in the fact that only 21 percent think better times are coming in the year ahead. A rudderless administration presiding over the expansion of counterproductive leftist public policies has suffocated hope.

The survey’s chief economist, Richard Curtin, pinned the sour attitude on three specific factors: the rise in gas prices, more expensive food and the widespread understanding that real incomes are going to remain flat. As has been widely discussed, the Obama administration’s anti-drilling policies have thwarted development of America’s vast oil reserves, ensuring this country remains unnecessarily dependent upon unstable foreign sources of crude. That makes things more expensive at the pump, but longer-term forces are also at work. Since 1995, car-hating liberals claiming to be saviors of the environment have required refiners to produce dozens of “boutique” fuel blends that change based on region and season. Previously, the Environmental Protection Agency mandated use of a substance known as MTBE to adulterate gasoline and create these blends. Never mind that this groundwater-polluting additive is a carcinogen.

Ethanol has mostly supplanted MTBE, transferring billions out of the pockets of drivers and into the hands of large agribusiness firms like Archer Daniels Midland, the largest producer of the corn-based substance. With the government lavishing subsidies on this useless product, less crop land is available for food production. That not only drives up the cost of corn flakes but beef and all the other products that depend on corn for feed.

In despair, Americans have looked to the Oval Office for a message of growth and prosperity. Instead, they hear lectures about “the rich” and the need for more stimulus. The public isn’t buying. Only 31 percent of likely voters believed Mr. Obama has been doing a good job with the economy in a March 20 Rasmussen Reports survey. Mr. Obama gives off the impression that he is confused as to why the policy plays of President Franklin D. Roosevelt, Jimmy Carter and discredited economist John Maynard Keynes haven’t paid off.

To the contrary, instead of generating more wealth year after year, America ended 2010 roughly with the same real gross domestic product we had at the close of 2007, according to figures released Friday by the Commerce Department. There are positive signs, but three years have been lost. The most upbeat news is that Mr. Obama’s spending spree has come to an official end. After boosting outlays 8.8 percent in 2010’s third quarter, federal spending dipped 0.3 percent in the fourth, according to the department’s figures. Local and state governments likewise had no choice but to reduce overall spending by 1.4 percent.

Less government gives the private sector more room to recover and expand, but that tiny rollback is nowhere near what’s needed to put the country back on the road to prosperity. House Republicans need to draw a line in the sand and refuse to continue on the path of borrowing trillions from future generations to pay for today’s bureaucracy.

So far, the GOP strategy of short-term budget extensions with noncontroversial cuts in spending has only put off the inevitable showdown between the two competing visions for the country’s future. The Keynesian model has failed once again. The time has never been better for the right to articulate a coherent, limited government philosophy against a president who looks increasingly out of touch.