The Commerce Department reported on Thursday that real gross domestic product increased 3.2 percent in the last quarter of 2013. Why, then, is the stock market slumping?
For one thing, growth in the fourth quarter actually dropped in comparison with the third quarter, when it hit 4.1 per cent. For another, there was slippage in two key sectors that had been driving the recovery — housing and cars. According to the New York Times, “The residential housing sector contracted in the fourth quarter, for the first time since 2010, and motor vehicle sales slowed from the third to the fourth quarter.”
Consumers just don’t have the confidence needed to make the major spending commitments homes and cars require. And why should they? The ranks of the long-term unemployed are growing by 72,000 per month — and those unemployed the longest no longer receive unemployment insurance, thanks to Republican opposition. The minimum wage remains stuck at $7.25 per hour, and the Republicans controlling the House of Representatives are not going to let it rise. The Tea Party continues to push for cuts in government spending, even though wise investments in infrastructure, education, science, and research are desperately needed to get the economy moving again.
In his State of the Union Address on Tuesday, President Obama again called for increasing the minimum wage to $10.10. Our own congressman, Rep. Tom Reed, has yet to co-sponsor a bill that would achieve this.
Reed has, however, proposed a bill that could do some good in terms of helping the economy, as the NewNY23rd has noted. The Revitalize American Manufacturing and Innovation Act, introduced by Reed and Democratic congressman Joe Kennedy of Massachusetts, would create a network of regional institutes intended to spur manufacturing by promoting advanced technologies, materials, and processes. President Obama has endorsed the legislation, pointing out that his administration has already established two such institutes and plans for four more. He could do more, the President says, if the Reed-Kennedy bill became law.
But here’s the curious thing: a proposal that has Joe Kennedy on board and that has been endorsed by President Obama has almost no chance of passing the Republican-dominated House of Representatives. Passage of any significant measures to boost the economy will require a House controlled by Democrats rather than Republicans. President Obama knows this, and has decided to manage as best he can without Congress, but within existing law, to get the economy moving through executive action.
By electing Martha Robertson on November 4, voters in New York’s 23rd can help give the President the Congress he needs in order to take stronger action to bolster the economy.