Here’s how to stifle recovery

Clouds of faux economic doom hover, their presence perpetuated by factors real and perceived. Food and energy prices have soared, the dollar has stumbled, unemployment is rising and Detroit is staggering. The economy is ailing, but its rumored demise is an exaggeration and the discomposure it engenders among some who ought to know better is a hindrance rather than a hastener of recovery.
In fact, the economy grew by 1.9 percent last year, meager but not an indicator of recession, oil prices have fallen slightly and the housing market might have hit bottom. The downturn’s end has not arrived and might not be near, but the bleakest days appear already to have passed. A good place to turn beyond the numbers for a glimpse into the state of economic affairs are developers, a group who will play a vital part in shaking the doldrums. Several local projects are cases in point:
Petrie-Ross Ventures plans to build retail and cultural venues off U.S. 250 in Staunton as part of a deal with the Frontier Culture Museum. Several miles to the east, in Fishersville, Charlottesville-based Crescent Development has gained backing from Augusta County for $3.6 million in tax increment financing to help launch a 420-unit residential development with a mix of retail. A third project, calling for almost 900 homes off U.S. 250 in Fishersville, has stalled over financing concerns.
All of this demonstrates that while the economy remains fragile, not all are convinced that a second Depression is inevitable. Developers are preparing for the day when light penetrates the gloom, and the economic wheels begin anew to turn.
Government can accelerate the process but needs to take greater care in the effort. Stimulus checks give an appearance that contrasts sharply with reality. Consumers’ wallets are padded marginally and then quickly deflated as the budget deficit swells. Similarly, the massive housing bailout rescues banks and homeowners from their indiscretions while burdening taxpayers and widening the budget gap.
Reducing taxes is a more appealing option, though decidedly less so to those whose solutions to crises imagined and actual invariably involves more government spending. The economy is starved not for the infusion of tax dollars but investment money, which produces jobs and sustains economic life. Similarly, government could have eased today’s fuel costs, and the spinoff inflation they produce, by easing into the shadows a decade ago rather than tightening its regulatory grip on oil exploration and drilling.
The upcoming presidential election represents to an extent more limited than we would like a philosophical clash precisely along these lines. Is America better for greater government intrusion in the form of taxes and restrictions on our capacity to supply ourselves? Barack Obama argues in the affirmative, and backs his position with a plan to send tax rates soaring. John McCain argues in the negative, so much as his instincts for compromise in defiance of straight talk will allow. He plans to keep Bush tax cuts in place.
America recoils at the prospect of a reincarnate Bush, and so do we. On the subject of spending in particular, Bush’s legacy is one of capitulation and excess. But his tax policies helped the economy remain upright amid the withering blows of 9/11 and through most of a tumultuous presidency. This is easily forgotten amid Bush’s considerable failings. Government’s panic-driven zeal to intercede in the face of the economy’s wavering, with Bush’s assent, has worsened matters.
An Obama presidency would expand rather than restrain government’s most dangerous impulses regarding all things economic. Developers and investors such as those envisioning growth along U.S. 250 will drive America’s return to the level of prosperity to which we have all grown accustomed. They need government to facilitate, regulate only so much as is necessary and then stand aside. Obama’s ascension accompanied by his tax program would fell a recovery just as its welcome vestiges finally turn visible.