Economic Insanity

What is worse? A Senate Majority leader who tells Governors to consider bankruptcy because he doesn’t plan on bailing them out, or a Congresswoman from New York who promotes staying at home instead of going back to work as a form of protest? The short answer: none.

Let’s start with Senate Majority Leader Mitch McConnell.

On Wednesday he said he favors allowing states struggling with high public employee pension costs amid the burdens of the pandemic response to declare bankruptcy rather than giving them a federal bailout.

“I would certainly be in favor of allowing states to use the bankruptcy route,” in response to a question on the syndicated Hugh Hewitt radio show. “It’s saved some cities, and there’s no good reason for it not to be available.”

The show’s host cited California, Illinois, and Connecticut as states that had given too much to public employee unions, and McConnell said he was reluctant to take on more debt for any rescue.

“You raised yourself the important issue of what states have done, many of them have done to themselves with their pension programs,” he said. “There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.”

While the irony in that statement is incredible let’s focus next on the most recent statement made by the freshman Congresswoman from New York who goes by her own three-letter acronym, AOC.

The same day the elder Republican made his flippant comments, essentially telling Governors who need financial support to kick rocks, Rep. Alexandria Ocasio-Cortez (D-N.Y.) argued that many Americans should protest economic insecurity by refusing to work after coronavirus-related restrictions are lifted.

“When we talk about this idea of reopening society, you know, only in America does the president — when the president tweets about liberation — does he mean go back to work. When we have this discussion about going back or reopening, I think a lot of people should just say ‘no’ — we’re not going back to that,” she said.

“We’re not going back to working 70-hour weeks just so that we could put food on the table and not even feel any sort of semblance of security in our lives.”

This is coming from the same elected official who two days prior tweeted “You absolutely love to see it” in response to oil prices collapsing.

She later tweeted “This snapshot is being acknowledged as a turning point in the climate movement. Fossil fuels are in long-term structural decline. This along w/ low interest rates means it‘s the right time to create millions of jobs transitioning to renewable and clean energy. A key opportunity.”

Both of her statements and Mitch McConnell’s are infuriating.

My first thought is where did these two go to school and what did they major in?

The Senator graduated with honors from the University of Louisville with a B.A. in political science in 1964. The Congresswoman majored in international relations and economics and graduated in 2011.

Mitch is 78 and has been in the Senate since 1984. AOC is 30 and is still in the middle of her first term in Congress starting less than two years ago. He’s old enough to be her grandfather and has been around since before there was a personal computer and the Internet. She has never known a time when there weren’t computers and Internet access in public schools. Different generations, different life experiences, yet both couldn’t be any more wrong on the economy and how to help the American worker.

When McConnell said states that have been historically led by Republicans and Democrats should not look to the government for a bailout, he failed to look at the bipartisan spending spree Congress has been on for the past four decades. Congress will never file bankruptcy itself. The 1971 shift away from the gold standard to the full faith and credit of the United States government gave Congress and the Federal Reserve a license to print money. This is evidenced by the national debt growing from under a trillion in 1980 to over $22 Trillion and counting. Local states and municipalities don’t have that luxury.

AOC is quick to tell her constituents and anyone else who would listen to protest Trump and his desire to get Americans back to work and just say ‘No’. Similar to former first lady Nancy Reagans anti-drug campaign of the 1980s. Never mind that one in four workers are unable to come up with $500 for emergency expenses. Never mind that NY State has been on a 100% lockdown of non-essential businesses since March 20 along with the majority of the rest of the country.

When AOC applauds the decrease in oil prices by saying “you love to see it,” what is it that she loves to see? Many retirement accounts that invest in mutual funds most likely have oil companies as a part of their portfolio. Does she love to see those funds go down in value? Maybe she loves to see the price at the pump go down? Who doesn’t? My wallet appreciates it and so does yours every time you fill up at the pump. 

Let’s think on a macro level since AOC, the economics graduate obviously doesn’t.

For those who missed the news, the price of US Crude turned negative this past Monday for the first time in history. The Guardian.com has an article that helps to explain the significance of this and why it’s a bad thing.

The laws of supply and demand are simple. The demand for oil has become anemic due to the outbreak of the pandemic. The entire world has with limited exceptions promoted a shelter in place economy. The kind where no one, unless essential are authorized to work and non-essential travel or leisure will get you fined and arrested. Every part of our economy is impacted by fossil fuel production. High oil prices make it cost-prohibitive to do business overseas and across state lines. Low oil prices force reduced employment, which translates to economic devastation to communities that rely on oil workers and their tax revenue base. 

Negative prices mean oil companies will go out of business and the United States will lose its status of being energy independent. For those who weren’t alive to see what that looks like in real life, do a search of the 1973 oil crisis.

McConnell is so far removed from reality that he forgets America’s economy and Congress’ ability to spend relies on the financial health of the States and their ability to keep the local government running. Without financial support, the national economy will never get back to the level of prosperity we’ve enjoyed for the past decade. AOC lives in a fantasy world. The kind where people can stay home indefinitely and oil companies going out of business is a good thing. She worships at the altar of climate change and believes fossil fuel production is evil. 

Never mind the fact that the oil and natural gas industry supports 10 million jobs or 5.6% of total US employment.

You can’t grow the economy without people going back to work. You can’t spend your way to recovery and tell the states to deal with the pain. Without financial support, we don’t have a state. Without a state, we don’t have a country. Without a country, we don’t have a home. We won’t have a home because we won’t have a job to go to. 

For all of the commercials that say we are in this together, why don’t our elected leaders get the message, and work together? That is the definition of economic insanity!

AOC Economy Mitch McConnell

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