Free Markets, Free People

Jobs speech – falsehoods, blame shifting and fantasy (update)

A reasonable summary?  How about, ‘”let’s put aside partisan bickering because I need a political boost and spend half of what was spent on the stimulus to do exactly the same thing that hasn’t yet worked.”

As most predicted two things were evident in the speech.  A president out of ideas and trying once again to shift blame to Congress.  And the fact that he still doesn’t understand that the spending spree is over.

Instead of suggesting a regulatory roll back, or cutting government red tape, or even, horror of horrors, a corporate tax cut, we’re essentially get much of the failed stimulus plan repackaged.  The entire purpose of addressing a joint session of Congress (instead of doing the speech from the Oval Office) was to again attempt to establish the House GOP as the bad guys in all of this.

The proposal is simply a redo of the stimulus plan, something Obama has been trying to get Congress to do since the first one failed.  Obama proposed a payroll tax cut extension, an extension of unemployment benefits, the creation of an infrastructure bank, a new job training initiative, and providing aid to state and local governments, which have been hard hit by job losses.

The infrastructure bank is somewhat new, but aimed at the same sort of programs at which we previously threw over $800 billion in stimulus money.  How did that work out?  The payroll tax and unemployment benefit extensions haven’t produced more jobs yet, have they?  In fact some argue the continuing extension of unemployment benefits works to the opposite effect.   We’ve had job training programs since time immemorial and they too have very little positive effect.  The one key point that those who propose such initiatives always seem to miss is there have to be jobs available for such a program to be successful.   And finally, pumping money into state and local governments is a very temporary fix.  It allows them to keep employed workers who they otherwise couldn’t, at least for a while.  But, as they learned with the stimulus funds, once the money ends, so do the jobs.   Hardly what one would consider a “jobs program”.

Obama also tried to waive off criticism of cost by claiming his plan was all paid for.  AP disputes that:

OBAMA: "Everything in this bill will be paid for. Everything."

THE FACTS: Obama did not spell out exactly how he would pay for the measures contained in his nearly $450 billion American Jobs Act but said he would send his proposed specifics in a week to the new congressional supercommittee charged with finding budget savings. White House aides suggested that new deficit spending in the near term to try to promote job creation would be paid for in the future – the "out years," in legislative jargon – but they did not specify what would be cut or what revenues they would use.

Essentially, the jobs plan is an IOU from a president and lawmakers who may not even be in office down the road when the bills come due. Today’s Congress cannot bind a later one for future spending. A future Congress could simply reverse it.

Currently, roughly all federal taxes and other revenues are consumed in spending on various federal benefit programs, including Social Security, Medicare, Medicaid, veterans’ benefits, food stamps, farm subsidies and other social-assistance programs and payments on the national debt. Pretty much everything else is done on credit with borrowed money.

So there is no guarantee that programs that clearly will increase annual deficits in the near term will be paid for in the long term.

To actually pay for this, the revenue must be diverted from this years budget, not some future year(s) budget.  Again smoke and mirrors to sell more spending.   Eric Cantor caught all sorts of grief for claiming disaster relief needed to be paid for elsewhere in the budget.  That is how you cut and control spending.   What Obama has again done is use the old DC jargon that claims something is paid for if they say they plan for it in the future. 

That’s simply not acceptable.

Obama challenged the Republicans with a falsehood:

OBAMA: "Everything in here is the kind of proposal that’s been supported by both Democrats and Republicans, including many who sit here tonight."

THE FACTS: Obama’s proposed cut in the Social Security payroll tax does seem likely to garner significant GOP support. But Obama proposes paying for the plan in part with tax increases that have already generated stiff Republican opposition.

For instance, Obama makes a pitch anew to end Bush-era tax cuts for the wealthiest Americans, which he has defined as couples earning over $250,000 a year or individuals over $200,000 a year. Republicans have adamantly blocked what they view as new taxes. As recently as last month, House Republicans refused to go along with any deal to raise the government’s borrowing authority that included new revenues, or taxes.

So, as AP points out, the claim is fraudulent.  In fact, there are many things in the proposal that the GOP has been against.

And perhaps the biggest falsehood of the night?

OBAMA: "It will not add to the deficit."

THE FACTS: It’s hard to see how the program would not raise the deficit over the next year or two because most of the envisioned spending cuts and tax increases are designed to come later rather than now, when they could jeopardize the fragile recovery. Deficits are calculated for individual years. The accumulation of years of deficit spending has produced a national debt headed toward $15 trillion. Perhaps Obama meant to say that, in the long run, his hoped-for programs would not further increase the national debt, not annual deficits.

Perhaps.  But then if that was so, he should have said it, shouldn’t he?  Instead he played politics.

Probably most interesting was the man who has been driving the lead clown car in the political parade admonishing Congress to “stop the political circus and do something”.  It has taken the circus ringmaster 3 years to figure out this is what he should have been focused on from the beginning.   And for 2 of those years, he had an all Democratic Congress. 

They guy who called for an end to politics has done nothing but played politics throughout this whole ordeal.  And now, with his popularity at an all time low, his political future dimming and with him finally turning from his political agenda to that to which he should have been paying full attention from day one, he falls back on one of his favorite political tricks – blame shifting.

What he doesn’t seem to understand is this is all his now.   And while the GOP should consider the proposal, it should also be unremitting in pointing out that the proposal isn’t paid for, will add to the deficit and is simply another attempt at a second stimulus throwing money at old programs and ideas which have yet to prove their worth in either improving the economy or increasing jobs.

(UPDATE) If you really want to know how bad the plan is, Krugman liked it:

First things first: I was favorably surprised by the new Obama jobs plan, which is significantly bolder and better than I expected. It’s not nearly as bold as the plan I’d want in an ideal world. But if it actually became law, it would probably make a significant dent in unemployment.

Yeah, just like the last one did, huh Paul?

~McQ

Twitter: @McQandO

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11 Responses to Jobs speech – falsehoods, blame shifting and fantasy (update)

  • Did anybody besides the dwindling number of his cheerleaders in MiniTru and the lefty blogosphere take this speech seriously?  Hell, did Bad Luck Barry himself take it seriously?  Or was this just a case of throwing out a “plan” so that he could claim, “Hey, I tried, but those nasty ol’ Republicans just blocked everything, so it’s THEIR FAULT” when the economy is still in the dumper a year from now?

    McQWe’ve had job training programs since time immemorial and they too have very little positive effect.  The one key point that those who propose such initiatives always seem to miss is there have to be jobs available for such a program to be successful.

    I would also add:

    — There’s a time lag involved: a person doesn’t learn to be a plumber or a computer programmer in a day;

    — How does a person know WHAT training to get?  What companies will be hiring in six months or more when he emerges from school or training with a shiny diploma or certificate in hand?

    — People have been conditioned to “pursue their dreams” and, on a more basic level, to regard many types of careers as somehow beneath them.  I suggest that, to many people, it’s a far better thing to get a BA in Lithuanian Feminist Impressionism of the Mid-14th Century than learn how to lay brick, wire a building, or fix a car;

    — Not everybody is suitable for any training that comes along: it’s not reasonable to assume that we can turn former auto workers who’ve spent the past twenty years bolting on hubcaps into computer programmers just by waving the magic wand.

    • job training programs”

      Yeah, they keep training them in things on one wants – like enviro friendly upgrades to their homes, solar installs, etc, where there just isn’t a HUGE market in a crappy economy.
       
      When there aren’t jobs to be had, EXACTLY WHAT are they being trained to do?  (heh, jobs no Mexican illegal will do?)
       
      and from the other side – employing these trained people –   Let’s see,  hire someone to install Solar panels with a government tax subsidy and credit I can claim next April, or, buy gas to get to work….oh, decisions decisions decisions.
       
      And meanwhile, let’s make sure we spend another 4 billion in tax credits to illegals, and make sure we don’t deport any of those illegals we bother to catch who may be taking jobs here or collecting government benefits here.

  • I like what Rick Perry said during the debate. He pronounced Keynesian economics dead. I don’t think it can ever die, just like socialism, a truly bad idea has an eternal life.  Nevertheless, it might be put into a coma for a while.

  • By “Republicans,” as in “supported by Republicans,” Obama means David Brooks and John McCain.

  • TM over at JOM makes it clear …

    But let’s credit Obama with a great idea for stimulating the economy – I am going to buy a sports car and tell my wife it is already already paid for, with savings that she and I will identify later. That will work!

    Yeah. That’s the ticket !
    Meanwhile, the market have opened.  The verdict — the President of the United States of America is a f’n loon.
    If Obama gets re-elected, the American people will deserve 4 more years of pain.

  • “You LIE, Mr. President”…
    Was on every mind…save only a few…who heard that speech/plan/campaign address.  (I did not, since I did not want to get that drunk last night).  I have listened to clips, which is all I can stand.
    It was intended to save ONE job…HIS.

  • David Brooks says, in view of the risk of a double-dip:

    Personally, my bottom line is this: I think the president has earned a second date. He’s put together a moderate set of stimulus ideas. His plan may not be enough to jolt prosperity, but it might maintain its current slow growth.

    Of course I don’t expect readers here to agree that another stimulus will work or that Obama has earned trust on another date — hardly the second btw. Since it was a speech not a bill, we won’t see how it is packaged for some time. But regardless, I don’t see how it can pass, given GOP dominance in the House. I can’t believe that Obama doesn’t know that either.

    Therefore, the speech’s purpose would seem purely to be laying the ground work for blaming the GOP next year, so Obama can go into the campaign swinging like it’s 1948 and “Give ‘em H*ll, Barry!”

    McQ covered blame-shifting in his post, but I want to emphasize it here as I can’t say any other plan here. Not that Obama wouldn’t enjoy having another half-tril chunked into his lap for his dispersal, but I don’t believe even he expects that to happen.

  • I’m waiting for Erb to come out of the woodwork to proclaim to the world how Obama just pulled off the political ploy of the century and will for sure win the election in 2012.  His entry should appear in five . . four . . three . . two . . one . .