Reuters reports that employers cut back on hiring, again, in the month of April. Certainly this is a very important outcome in an election year. The perceived health of the economy can play in favor or against the candidate – in the opposite direction. A perceived healthy economic outlook favors the incumbent President, but works against the challenger. If the economy is doing fine, why change the policy? But if it is not, the necessity for change seems obvious.
Unemployment has been a central aspect of the economic recovery plan. Employment, it was promised, will increase and the American economy will take off to recovery again. Worried by the effect of employment figures on the electorate, Obama is urging the Congress to take “common sense ideas” to accelerate job creation. Luckily, common sense ideas are easy to find. Classic works as old as the Wealth of Nations by Adam Smith could reveal the common-sense that seems to be lacking in the recent economic policies. Unluckily, this is not the common sense that will most likely be discussed.
It won’t come as a surprise if the new “common sense ideas” are the same old failed ones but with a different semantics or frameworks. Spain followed similar policies to those of the United States, with fiscal stimulus as a central player. Today, Spain poses a great danger to the European Union. A comparison should be done with Germany, which despite no absence of fiscal stimulus, followed a more conservative policy and is in a better shape than other countries. Some common sense can sometimes be found looking beyond the political frontiers.
Nicolas Cachanosky is a doctoral student in economics at Suffolk University, as well as a previous Sound Money Essay Contest winner.