Teeter-Totter? - David Malpass: The Fed's Zero-Rate Policy Is Hurting the Economy - WSJ.com

David Malpass: The Fed's Zero-Rate Policy Is Hurting the Economy - WSJ.com

What Malpass is very right on is that dollars are fleeing the United States.

The Democrats are religious in their orthodoxy of promoting government as the provider of all things good - i.e. retirement, health care, welfare, etc.

The Obama jobs summit confirmed the above. There was nothing that I heard about making America a better (i.e. freer and lower cost) place to do business.

Why we ignore what Democratic policies bring about - just look at Michigan and California - is beyond me.

Malpass is also right, but doesn't go far enough in pointing out that businesses, just like every investor, look for the highest or relatively higher rate of return, based on risk.

He appropriately points out how the Fed is pushing on the economic string with zero interest rates; but, as Bernanke testified yesterday, the Fed wants to stay out of fiscal policy comments. And, it is fiscal policy that is wreaking the havoc - Democratic fiscal policy!

Malpas also appropriately highlights that the dollars fleeing the US for better returns are sucking the money out of US to earn better returns abroad and the money isn't there for small businesses to borrow. What he should add is that the returns small business can earn are either too low or likely will be too low with all the taxes and additions to labor costs that the Democrats are planning and will have to plan.

Not enough people are blaming the Democrats for the economic conditions being wrought. Just take a look at Venezuela. It luckily has oil to export; but, it has roughly 30% inflation at last count and can't feed itself. But, the socialist free lunch is still in full force.

I hope the US isn't on the teeter-totter that it appears to be on and the change in position when it comes, will come quickly.

But, it would seem like basic logic and common sense. You take from a few to give to more than a few and the few feel less inclined to work! Of course, to a Democrat, the average guy or gal just keeps working away - even though they get to keep less and less.

As Malpass points out, even it they want to keep working, the people with the money know it doesn't make any sense so they're moving their funds someplace safer.

Maybe it's crazy to think that people put their own self-interest first - but, my guess is that it's true not only of those clamoring for more government services at even lower prices; but also those who are being asked to pay for providing those services to other people.