20 months after taking office, Obama considers tax breaks to stimulate economic growth
All sorts of things to talk about under that title. So that calls for a bit of a ramble.
First and foremost, the title tells the story. Why is it we’re 20 months into this administration and we’re just now considering tax breaks to stimulate the economy? Note the word – considering. According to POLITICO, there’s been no decision at all made on doing such a thing – if you thought the administration dithered about its strategy change in Afghanistan, this makes that look like a snap decision.
Last November, Obama announced that he would turn his attention to unemployment, calling it "one of the great challenges that remains in our economy." He declared the same intent two months later, telling House Democrats he would focus relentlessly on job creation "over the next several months." Senior aides went on television pledging that the mantra would become "jobs, jobs, jobs."
But other matters – health care, the BP oil spill – continually stole the limelight, creating the impression, some Democrats complain, that the president was barely focused on the economy at all.
And now, “suddenly”, two months before an election, he’s “focused like a laser beam”. A soft weak lit laser that sort of doesn’t do much but emit, well,
words a bit of light.
I mean, read this explanation and tell me those who offered this as proof of his attention to the economy aren’t both tone deaf and just plain politically stupid:
His advisers described his attentiveness – noting, for example, that he discussed the economy with New York Mayor Michael R. Bloomberg (I) for 15 minutes before golfing – but got little traction.
Really? What in the freaking world has NY Mayor Michael Bloomberg got to do with anything to do with the economy. I mean, oh, goodie, he spent 15 minutes being "attentive" before they hit the links. That’ll fix everything. Oh, and what “traction” was he seeking?
In reality what happened was Obama was sold a bill of goods by his economic advisors about the effect of government stimulus. Congress got a hold of the idea and larded it up with pork. Result: spectacular FAIL.
They’re reduced to justifying the stimulus like this:
Many economists say Obama’s policies have been reasonably effective at pulling the nation back from recession. Last year’s stimulus package – now estimated to cost $814 billion – protected as many as 3.3 million jobs, according the independent Congressional Budget Office.
“Many” economists say his policies have been “reasonably effective” because some computer model says it may have “protected” – note the new word – “3.3 million jobs”? Really?
Back to the “this ain’t rocket science” theme, but even if that’s true (and it’s very suspect) that’s about $250,000 deficit funded dollars per job. And most of those, if I were to guess (oh, wait – “according to my model”) would be found in the non-productive government sector. Result? 9.6% unemployment, no growth and no jobs.
So why, you ask at this late juncture, is he and his economic staff finally considering tax cuts?
Well, common sense says that the way to immediately impact spending and consumption is to give consumers more money with which to consume. Make sense? Yeah, it made sense 20 months ago too. And there’s another reason that finally has seemed to penetrate their thinking:
All the talk about taxes—whether to raise them to address the deficit or cut them to stimulate the economy—may be having its own effect on growth. Allan Meltzer, an economics professor at Carnegie Mellon University, said the economy wouldn’t fully revive until Washington resolved uncertainty surrounding business costs, including taxes.
"Companies are cutting their expenditures and not hiring because they’re very uncertain" about these costs, he said.
Precisely. Why in the world – as we’ve been saying for months here – would any business hire and expand in the face of this government made market uncertainty?
Meanwhile the political battle rages with the expected blame-game in full swing:
"Obviously it’s going to be hard to get anything done before the election, but it’s really important for him to try, and to make the case to the American people that he’s trying to do something and the Republicans aren’t letting him," said Steve Elmendorf, a Democratic strategist. "We are at the final moments here."
What the GOP isn’t “letting” them do is wildly throw another huge amount of money we don’t have at the problem.
David Axelrod piles on:
"We’ll continue to do everything we can, understanding that recovery will require persistent effort. There are no silver bullets," senior Obama adviser David Axelrod said in an interview Thursday. "At the same time, we have to make clear our ideas and theirs, and the fact that the Washington Republicans, having helped create this recession, have attempted to block our every effort to deal with it."
Yet the bar to passing any of this may not be “Washington Republicans”. POLITICO reports:
But the administration will have a tough time selling nearly any package to some Democrats who increasingly blame the president and his ambitious legislative agenda for their own dismal prospects this November. And further states:
White House press secretary Robert Gibbs has repeatedly said the administration would go small-ball with any plans to boost the economy — and that the Democrat-controlled Congress had no appetite for costly, sweeping measures two months before what promises to be a difficult election cycle for the party. >
Emphasis mine, but you get the picture. Democrats aren’t sure they want anything but if they do, whatever it is it has to work and work quickly. Reality, however, is much more stark for the Democrats:
"Substantively, there is nothing they could do between now and Election Day that would have any measurable effect on the economy. Nothing," said the Brookings Institution’s William Galston, who was a domestic-policy adviser to President Bill Clinton.
Indeed. As I continue to watch the economic three-ring circus this administration has created, I’m reminded of the words of one of my favorite funny men, Oliver Hardy: “Well, here’s another nice mess you’ve gotten [us] into."
Next up, the Three Stooges do ObamaCare.