The classic image of the Emperor Nero playing the fiddle while around him Rome burns has been used in everything from Bugs Bunny cartoons to various political campaigns. But on the heels of lack luster economic reports indicating that retail sales are slumping as we go into back-to-school season, it would take only the most blind of individuals to wonder if Congress is the organization doing the fiddling.
As we roll into full on election season, it is easy to target the Office of the President as responsible for the poor economy. After all, the Representatives are the ones bringing home the bacon, in theory, to their districts, while the President sits in Washington, fiddling with the economy. Of course, anyone with a modicum of economic theory knows that this is absolutely not the case.
Gasoline prices are up. That is normal during the summer driving season, but also because of additional sabre rattling in the Middle East, mainly in Iran, with additional pressures from speculators hoping to make a quick buck and processors who have sliced production capabilities. All of this is not the fault of a single individual, but is the result of a complex market. But it is something that Congress has a bit of control over. Least of which is the massive incentives that the oil companies have been given for everything from tax credits for pretending to search for alternative energy solutions to tax credits for cleaning up their own messes.
Congress has been dragging their feet over several other issues this summer. The biggest two are the extension of the Bush era tax cuts, and extending the Federal Highway funding. The latter was passed at the last minute, but the uncertainty that it would be passed put a significant number of workers, and companies on edge. Would you go out on a limb and hire someone if you were unsure the money you had been counting on was not approved? The same is true with the tax cuts. Congress is generating enough uncertainty over extending these cuts, that the average consumer is bogarting their limited funds.
Finally, a report out this morning should come as a cold splash of water in the face of even the most head-in-the-sand Representative. The Aerospace Industries Association has concluded a study that indicates, unless Congress gets off its collective ass, upwards of two million government contractors will be out of work if the cuts implemented as part of the debt ceiling debacle late last year and the failure of the Super Committee to come up with a realistic workaround. This is an additional million over reports out of Lockheed Martin earlier this year. And these are only the jobs lost at the primary level and does not include jobs lost as a result of the primary level not spending money. If retail sales are down now, can you imagine how back Christmas will be if Congress does not act?
When you go to the polls in November, and cast your vote for President and Congressional representative, think hard about the damage that Congress has been doing to the economy over the last four years. From the failure to reach a consensus on cuts needed to avoid the loss of jobs, to the give aways to companies that are securing record profits, these are issues that only the Congress can deal with. The President is little more than a figurehead in all of this.