Free Markets, Free People
Pete DuPont does a little analysis of what should be major issues in the upcoming election. They don’t bode well for the current administration if, in fact, Republicans can get the media to actually pay attention and address them:
• Taxes. Big tax hikes coming in January will serve as dampers on economic growth.ObamaCare imposes a new 3.8% tax on investment income. On top of that, if the Bush tax [rates] aren’t extended, the top income tax rates will rise to 23.8% from 15% on capital gains and to 43.4% from 15% on dividends.
But beyond the economic impact, the Obama administration’s focus on class warfare fuels the nation’s dissatisfaction and plays on an unwise resentment towards successful businesspeople. Mr. Obama continues to push for higher taxes and does so in a way that is an attack on those who are successful–demanding that higher-income taxpayers pay their "fair share," when they already pay more than that.
The economic impact shouldn’t be waved off. When and if both capital gains and dividend incomes are taxed at a higher rate, they will effect both investment and retirement incomes. Don’t forget those” rich folks” whose retirement income is structured to depend on dividends from blue chip stocks they’ve methodically bought in small quantities over their working years. It obviously doesn’t matter that their incomes really don’t reach the “rich” threshold that the Democrats want you to envy, their retirement incomes will take an almost 200% tax increase hit regardless if the current rates aren’t extended. Apparently to collect less than a trillion dollars over 10 years taxing the “rich” (so they’ll pay their “fair share”) vs. spending $46 trillion Democrats are happy to sacrifice those folks.
As for investments, there’ll be a recalculation given the increase on capital gains and it will dampen investments, thus business expansion and finally job growth.
• Energy. The American people hear Mr. Obama talk about a broad energy strategy, but they see an administration that has attacked the coal industry with onerous regulations, done little or nothing to assist the natural gas boom, done what it can to slow down oil production, and wasted money on other initiatives that please green supporters but don’t lower the cost of energy.
This administration’s energy policy is a joke, but unfortunately it’s a very expensive joke. Its priorities are completely backward, but purposefully so. To call what they are doing a “policy” is simply absurd. This is agenda fulfillment with the people’s money on pie-in-the-sky projects that have yet to yield (nor do they even promise to yield) the energy required to make them viable. Meanwhile they’ve done everything humanly possible to retard the fossil fuel industry’s growth at a critical time for our economy. On the issue of energy, this administration gets an F-.
• Health care. Although ObamaCare remains unpopular, the Supreme Court ruling upholding it means that a 17% transfer of our economy from the marketplace to the control of the federal government is coming unless Congress and a President Romney can stop it. At a time when our nation needs lower taxes and more flexibility in health-care decisions, ObamaCare has increased taxes by hundreds of billions of dollars and allowed government to regulate most of our health care decisions.
The secretary of health and human services can now set rules that constrain doctors and hospitals and mandate prices. Mr. Obama once promised us all that if you were happy with your current health plan, you’d be able to keep it. The more we learn about ObamaCare, the unlikelier that looks–and the more the government will intrude in the relationship between doctor and patient.
Despite the disapproval of a majority of Americans, Democrats and this President rammed the legislation through anyway. That should tell most Americans what they really think of their opinion. It is a classic “we know what’s best for you” elitist move.
The second paragraph gives a hint though to the powers this legislation has given an unaccountable government bureaucrat. The Secretary of HHS now has tremendous power to make unilateral decisions that will effect everyone’s health care. Of course, that’s been discussed by some on the right, but for the most part the level of intrusion these powers will confer won’t really begin to be felt until, conveniently, after the election.
• Spending. Federal expenditures under Mr. Obama is both unparalleled and unsustainable. As National Review’s Jonah Goldberg notes, from the end of World War II until the end of the George W. Bush administration, federal spending never exceeded 23.5% of GDP, and the Bush years’ average was around 20%. The Obama spending rates have stayed above 23.5% in every year of his presidency. In the past four years, America has added $5 trillion in federal debt, and around $4 trillion of that was from Obama policies, according to The Wall Street Journal. Federal debt held by the public was 40.5% of gross domestic product in 2008. It’s now 74.2% and rising.
Despite the attempts by Democrats using fudged numbers and trying to spin it so Bush gets the blame, the spending by this administration is, as DuPont points out, “both unparalleled and unsustainable”. And, don’t forget, the President hasn’t signed a budget in over 1,000 days because the Democratic Senate has refused to pass one, despite the Constitutional requirement it do so.
Those are the things we ought to be talking about. Not whether or not Romney pissed off the Palestinians (who doesn’t piss off the Palestinians when they take a principled stand on Israel? How is this even news?).
These are where Obama’s skeleton’s are to be found. He’d prefer to keep this closet door firmly closed. The media, for the most part, seems content to help in that endeavor.
This election isn’t about anything but his administration’s abysmal record. Spending time talking anything else is simply a distraction. Unfortunately, given its unprecedented level of economic intrusion, we’re going to live or die economically with the policies that government applies. Talking about whether a candidate may or may not have insulted the London Olympics isn’t going to change that fact one iota. But it sure does distract from examining the previous administration’s record, doesn’t it?
From the Wall Street Journal:
Egypt’s highest court ruled on Thursday to allow a former regime loyalist to run in presidential elections starting Saturday and to dissolve both houses of Egypt’s parliament, in verdicts that could add another pressure point to Egypt’s already fraught transition from military rule to democracy.
Actually it’s a little worse than that:
According to Ahram Online, a news website owned by the Egyptian government, a constitutional court judge announced that the ruling effectively dissolves both houses of Egypt’s parliament.
Taken together, the verdicts return the military—and the civilian cabinet it appointed—to full authority over the country, unhindered by an elected parliament.
One assumes there may be some resistance to this.
On Wednesday afternoon, Egypt’s ministry of justice endowed the military and intelligence services with expanded powers to arrest and detain people for participating in protests and disseminating media the military finds offensive—a decision that human rights groups said smacked of a return to the draconian justice of the former regime.
You think? Probably cut down a lot on the molesting of women in Tahrir square too … well maybe.
It has been fairly well established that unless something that happens on his watch reflects well on him, President Obama is in the habit of trying to pass off all bad things to someone or something else.
In the case of our economic woes, the latest pass off target is Europe. But the Wall Street Journal does a pretty darn good job of taking that argument apart. First with history:
In 1997 Asia’s economy imploded. Currencies collapsed, countries had their ratings downgraded to junk, millions of people lost their jobs, governments were replaced, regimes fell. In October a jittery Dow, fearing the effects of "Asian contagion," lost 7.2% of its value in a single day. Trading had to be halted twice.
And yet the American economy was unscathed. In 1997 GDP grew by 4.5%. In 1998 it grew again by 4.5%, this time despite the Russian ruble crisis. In 1999, annual growth reached 4.9%, a pace it hasn’t exceeded since. Unemployment fell to 4.2%. The government ran a surplus.
Obama claims that Europe is our “largest trading partner”. Well, they’re not:
Europe is not our largest trading partner. Canada is. Followed by China. Followed by Mexico. Followed by Japan. "Europe" only counts as America’s largest trading partner in an aggregate sense. An honest apples-to-apples comparison would find that U.S. trade with North America or East Asia dwarfs trade across the Atlantic.
And, tossing his blatantly false claim aside, is trade where our problem really lies?
Now take the question of how much trade matters to America. In 2009, foreign trade accounted for 24.3% of the U.S. economy. By contrast, the foreign-trade-to-GDP ratio was 51.9% for China, 71.1% for Canada and 89.2% for Germany. When it comes to foreign trade, the U.S. is the world’s least dependent major economy.
That’s right, it isn’t Europe and it isn’t trade that’s the problem. It is economic policy. Domestic economic policy and a rudderless ship of state, the captain more interested in fund raising and re-election than doing the hard work of trying to turn the situation around.
Which brings us to another excuse – Congressional Republicans:
Again, a little history is in order. The Bush tax cuts of 2001 passed the Senate 58-33 in an evenly split chamber. Bill Clinton managed to do business with a GOP that controlled both houses of Congress for six of his eight years in office. Ronald Reagan passed all of his economic agenda through a House that was under constant Democratic control.
Somehow it is only Barack Obama—whose party, in an inconvenient truth for his campaign, still runs the Senate—who seems incapable of working with any Congress not under full partisan control. (And even then he had trouble.) Americans expect their presidents to be able to assemble coalitions of the politically willing in order to achieve pragmatic and relatively popular results. The Obama administration method, by contrast, has been to shove what it can down the public throat, then act surprised when the public gags, or throws up.
Leadership, of course, makes a difference – Clinton, Reagan and Bush were able to exert the sort of leadership necessary to work with Congress to get what they wanted. Obama seems to think “working with” means he dictates and Congress passes what he dictates. And when that doesn’t happen, well, it’s off to another fund raiser.
Peggy Noonan talked about politicians “laying down lines” before an event so they can spin what happens in a positive way even if what happens isn’t at all positive. That’s what you see here – the President of the United States laying down a line of BS about Europe and trade so, if and when Europe collapses he can point his finger across the Atlantic and blame that continent for the problems here.
For the record, it isn’t the first or last time:
As president, Mr. Obama has attempted to make scapegoats of bankers, bondholders, private-equity firms, insurance companies, energy companies, ATMs, the Chamber of Commerce, the Catholic Church, opponents of illegal immigration, European politicians, Supreme Court justices and even Japanese tsunamis.
But he got bin Laden, didn’t he?
However, the 14.3% unemployed are not particularly impressed.
With these debt ceiling negotiations underway, it is useful to remind ourselves, especially with an election year looming, how we got in this spot that has Moody’s threatening to downgrade our bonds based on the possibility of default on the debt.
On spending, it is important to recall how extraordinary the blowout of the last three years has been. We’ve seen nothing like it since World War II. Nothing close. The nearby chart tracks federal outlays as a share of GDP since 1960. The early peaks coincide with the rise of the Great Society, the recession of 1974-75, and then a high of 23.5% with the recession of 1982 and the Reagan defense buildup.
From there, spending declines, most rapidly during the 1990s as defense outlays fell to 3% of GDP in 2000 from its Reagan peak of 6.2% in 1986. The early George W. Bush years saw spending bounce up to a plateau of roughly 20% of GDP, but no more than 20.7% as recently as 2008.
Then came the Obama blowout, in league with Nancy Pelosi’s Congress. With the recession as a rationale, Democrats consciously blew up the national balance sheet, lifting federal outlays to 25% in 2009, the highest level since 1945. (Even in 1946, with millions still in the military, spending was only 24.8% of GDP. In 1947 it fell to 14.8%.) Though the recession ended in June 2009, spending in 2010 stayed high at nearly 24%, and this year it is heading back toward 25%.
This is the main reason that federal debt held by the public as a share of GDP has climbed from 40.3% in 2008, to 53.5% in 2009, 62.2% in 2010 and an estimated 72% this year, and is expected to keep rising in the future. These are heights not seen since the Korean War, and many analysts think U.S. debt will soon hit 90% or 100% of GDP.
Here’s the WSJ chart talked about above:
In terms of percentage of the GDP, only WWII compares to the outlays we’ve seen in the past 3 years. And not only did the Democratic Congress and Obama “consciously blow up” the debt, they never offered a budget as required by law. This was just money thrown to the wind with the hope it would land somewhere where it might help. To call what they did a “plan” is to give real plans a bad name.
Now, suddenly, Obama is “serious” about this stuff, making demands that a fix be found, etc. Where the heck was he when this money was going out faster than little Timmy Geithner could print it? So let’s be clear, as Obama likes to say:
Congress is responsible for the way so much of this spending was wasted, resulting in little job creation and the slowest economic recovery since the 1930s. But in the U.S. political system, Presidents are supposed to be the fiscal adults. When they abdicate, the teenagers invite over their special interest friends and blow the inheritance.
The President is now claiming to have found fiscal virtue, but notice how hard he has fought House Republicans as they’ve sought to abate the spending boom. First he used the threat of a government shutdown to whittle the fiscal 2011 spending cuts down to very little. Then he invited Paul Ryan to sit in the front row for a speech while he called his House budget un-American.
How does one take this President seriously given this litany?
Easy answer – you don’t. I mean, look at this:
Now Mr. Obama is using the debt-ceiling debate as a battering ram not to control spending but to command a tax increase. We’re told the White House list of immediate budget savings, the ones that matter most because they are enforceable by the current Congress, are negligible. His offer for immediate domestic nondefense discretionary cuts: $2 billion.
As for Mr. Obama’s proposed entitlement cuts, they are all nibbling around the edges of programs that are growing far faster than inflation. He’s offering few reforms that would make a difference in the long run. Oh, and ObamaCare is untouchable, despite its $1 trillion in new spending over the next several years, growing even faster after that.
And this goes to the point of my previous post. When you look at how we got here and who is responsible (yeah, he didn’t inherit this – this is all his) it is hard to find any grounds for confidence that the same people have any idea or desire to change their ways. And yet they’re going to try to convince the American people that Obama should keep his job and Nancy Pelosi should be returned to the House speakership (with a sweeping victory putting a Democratic majority back in the House).
It’s enough to make a grown man cry.
It is a restriction of your freedom to choose. It is government assuming the role of deciding what is best for you instead of allowing market and consumers the freedom of making that decision and choice.
The greens and the Obama Administration assert that the new light bulbs are good for the lumpen bourgeoisie because they will cut electricity use and save the average household $50 a year. Mr. Obama’s Energy Department told Congress recently that to repeal the ban would "detrimentally affect the nation’s economy, energy security, and environmental imperatives." Yes, and cause the seas to rise to swamp Miami and New York too.
If you catch the sarcasm in the WSJ column cited, I believe it is well deserved. You see, if the average household found it worth $50 a year to make such a change, they’d do so based on their priorities, not government’s. That’s freedom. Instead we have the government forcing that decision on households whether they like it or not. And the reasoning? Well it has become almost cliché to cite Orwell when talking about many things modern government does, but in this case, and after the reading the following, tell me if you don’t agree it is entirely appropriate:
In classic doublespeak, the Department of Energy explains that outlawing incandescent bulbs will "empower consumers with lighting choices." Unless your choice is to buy the light bulb the government doesn’t like.
Indeed. There is no “choice” involved here at all, except to refuse to buy CFLs and sit in the dark.
When government can reach down to the level of deciding what you can and can’t buy for lighting your house, then you have seen your freedom diminished. And it can be for all sorts of good intentions – but it doesn’t change the simple fact that your freedom to choose is less today than yesterday. In fact, we need to update an old saying. The road to serfdom is paved with freedom killing laws based on good but collectivist intentions. Yeah, it’s not really very snappy but you get the idea.
Our freedom is slowly bleeding away, suffering a death by a thousand cuts. And we’re as much to blame as the government.
The question an (allegedly) free society should ask is if CFL bulbs are so clearly superior, why does the government have to force people to buy them?
Because it can. And we let it.
Insist Congress repeal the ban. Meanwhile – stock up on incandescent bulbs. I am.
President Obama has an op/ed in the Wall Street Journal (a carefully chosen venue to project a “pro-business” lean, I’m sure) in which he touts an Executive Order he is signing which orders a review of all federal regulation ostensibly to bring them inline with today’s realities and help root out those which stifle job creation.
On the surface, nothing at all objectionable in the premise. Obama claims the purpose of the effort is to ensure that what regulation is kept represents “common sense rules of the road that strengthen our country without unduly interfering with the pursuit of progress and the growth of our economy.”
Fine and dandy. I’d love to see that applied to the letter. I just have no real confidence that this is anything other than show (a visible move toward the center) or that bureaucracies will pay it any attention. Of course that’s something we’ll have to see and monitor.
But … again, backing government out of much of the present regulatory regime (“unduly interfering” in Obama’s words) would indeed be a help.
More on the stated premise:
But creating a 21st-century regulatory system is about more than which rules to add and which rules to subtract. As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends—giving careful consideration to benefits and costs. This means writing rules with more input from experts, businesses and ordinary citizens. It means using disclosure as a tool to inform consumers of their choices, rather than restricting those choices. And it means making sure the government does more of its work online, just like companies are doing.
Again, wonderful words (“more affordable, less intrusive” and more choice instead of “restricting those choices”) in an op/ed, but I have to say despite Obama’s claim this has been the aim of his administration the last two years, I’d dispute that. Look at the route the EPA is taking right now in terms of trying to impose a regulatory regime on greenhouse gases. Or how the Interior Department has unilaterally blocked oil and gas exploration.
Certainly simplifying the regulatory regime, removing conflicting and overlapping rules, eliminating redundant reporting requirements and moving much of what can be done on-line to that venue would help. But while that may make things more understandable and less onerous to do, it doesn’t really mean that intrusive regulation is going to go away or even be lessened.
We’re back to how you define such regulation and what level of intrusiveness you believe is too much. There’s no doubt that the Obama administration believes in a level of intrusion far greater than do most on the right. An example of the difference can be found in the article itself:
One important example of this overall approach is the fuel-economy standards for cars and trucks. When I took office, the country faced years of litigation and confusion because of conflicting rules set by Congress, federal regulators and states.
The EPA and the Department of Transportation worked with auto makers, labor unions, states like California, and environmental advocates this past spring to turn a tangle of rules into one aggressive new standard. It was a victory for car companies that wanted regulatory certainty; for consumers who will pay less at the pump; for our security, as we save 1.8 billion barrels of oil; and for the environment as we reduce pollution.
Of course on the other side of that are those saying “since when is it a function of government to decide what gas mileage a car must get?” The entire premise that it is a function of government is built on belief in a “justified” level of intrusion far beyond that which any Constitutional scholar would or could objectively support (that’s assuming he is a scholar and an honest one). In fact the example perfectly states the obvious difference between big government advocates and small government advocates. BGA’s think it is government’s job to dictate such things – that it is a function of government to do so. SGAs believe it is the market’s job to dictate such things and that government shouldn’t be involved in these sorts of things.
So in essence, while the Obama op/ed has all the proper buzz words to attempt to sell it as a pro-business, small government move, it is in fact simply a restatement of an old premise that essentially says “government belongs in the areas it is now, we just need to clean it up a little”.
This really isn’t about backing off, it’s about cleaning up. It isn’t about letting the market work, it’s about hopefully making government work better. And while Obama claims to want to inform us about our choices rather than restricting them, I’ll still be unable to buy a car that doesn’t meet government standards on gas mileage even if I want one.
Now that may not seem like something most of us would want – few if any of us want bad gas mileage and the cost it brings – but it does illustrate the point that government regulation really isn’t about providing choice at all, it is and always will be about limiting them. And all the smooth talking in the world doesn’t change that. It’s the nature of the beast.
So when you hear wonderful things like this…
Our economy is not a zero-sum game. Regulations do have costs; often, as a country, we have to make tough decisions about whether those costs are necessary. But what is clear is that we can strike the right balance. We can make our economy stronger and more competitive, while meeting our fundamental responsibilities to one another.
…just remember the reality of regulation and understand that all the great sounding words you hear coming from the administration about regulatory overhaul are most likely based on a completely different premise than the right has. And as all of us have learned from the 2 years in which this administration has been in power, never, ever, ever just go by what they say they’re going to do. Always judge them on what they actually do, because rarely do they ever do what they say in speeches or op/eds like this.
That’s the central theme of a Ken Langone op/ed in the Wall Street Journal. Langone is a co-founder of Home Depot who gives Obama a lecture he’s long deserved. He does a good job of summarizing the absurd rhetoric used by Obama and his administration and the attitude they project that has done nothing to help and everything to hurt the recovery:
Your insistence that your policies are necessary and beneficial to business is utterly at odds with what you and your administration are saying elsewhere. You pick a fight with the U.S. Chamber of Commerce, accusing it of using foreign money to influence congressional elections, something the chamber adamantly denies. Your U.S. attorney in New York, Preet Bahrara, compares investment firms to Mexican drug cartels and says he wants the power to wiretap Wall Street when he sees fit. And you drew guffaws of approving laughter with your car-wreck metaphor, recently telling a crowd that those who differ with your approach are "standing up on the road, sipping a Slurpee" while you are "shoving" and "sweating" to fix the broken-down jalopy of state.
That short-sighted wavering—between condescending encouragement one day and hostile disparagement the next—creates uncertainty that, as any investor could tell you, causes economic paralysis. That’s because no one can tell what to expect next.
Again we confront the difference between a politician in a permanent campaign and a leader. And we see the result.
Obama seems mystified by the role of the president. He seems not to understand that leaders don’t use the old, divisive and politically charged rhetoric of the campaign trail, but instead have the job of doing (and saying) what is necessary to move things in a positive direction. That has not been something Obama has done at all when it comes to business.
There’s another point Langone made that is worth featuring:
A little more than 30 years ago, Bernie Marcus, Arthur Blank, Pat Farrah and I got together and founded The Home Depot. Our dream was to create (memo to DNC activists: that’s build, not take or coerce) a new kind of home-improvement center catering to do-it-yourselfers. The concept was to have a wide assortment, a high level of service, and the lowest pricing possible.
We opened the front door in 1979, also a time of severe economic slowdown. Yet today, Home Depot is staffed by more than 325,000 dedicated, well-trained, and highly motivated people offering outstanding service and knowledge to millions of consumers.
If we tried to start Home Depot today, under the kind of onerous regulatory controls that you have advocated, it’s a stone cold certainty that our business would never get off the ground, much less thrive. Rules against providing stock options would have prevented us from incentivizing worthy employees in the start-up phase—never mind the incredibly high cost of regulatory compliance overall and mandatory health insurance. Still worse are the ever-rapacious trial lawyers.
Regulations, taxes, compliance and mandates cost businesses billions each year. That’s billions that aren’t spent on employees, customers, expansion or growth. And it is especially stupid to increase all of those in a recession – yet that’s precisely what is going on now. And it keeps the market unsettled and at least defers or may in fact kill any possible action by businesses which may benefit the overall economy.
Obama’s actions and rhetoric are a case study of someone who doesn’t understand his job, doesn’t understand the power of the words he utters (because he doesn’t understand his job) and has been very irresponsible with his rhetoric at a time when the damage that rhetoric can do are compounded by the situation (recession).
OJT is not something a president should be doing – especially in a recession. And for the supposed “smartest guy in the room”, he sure seems like a slow learner when it comes to his job and the requirements of leadership.
Note the operative word – "may". It doesn’t say it will, it doesn’t say it might, it says it "may" drop it because of the type of health insurance it offers and the impact of new regulations governing what amount of money must be spent by insurance companies for care. Specifically:
The requirement concerns the percentage of premiums that must be spent on benefits.
Last week, a senior McDonald’s official informed the Department of Health and Human Services that the restaurant chain’s insurer won’t meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care.
It is called the "medical loss ratio", but in reality it is government telling a business how it must spend its money. What the business is telling the government is, given the type of insurance offered by the business, driven primarily by the type of business it does, it won’t be able to comply with the regulation and will have to drop it’s present coverage altogether.
Of course this is bad news for the administration which is still out there pushing the lie that if you like your insurance nothing changes and you get to keep it. Naturally this flies right in the face of the lie and it’s such a high profile company that, well, something has to be done.
Like, make them an exception to the rule maybe? You know, special interest government. If you’re big enough and you can cause us enough embarrassment, we’ll “except” you from that which we require all the other drones to comply.
And that appears to be exactly what’s in the works if Jonathan Cohn is to be believed:
By this morning, both McDonalds and the administration were saying the story is overblown. McDonalds says it has no plans to drop the coverage and that it’s been in discussions with the administration over how to make sure it can keep offering the policies. The administration is saying much the same thing–that it’s aware of the issue, has been talking to industry representatives, and has already made clear these plans will be exempt from some of the early regulations on insurance.
Of course those plans obviously aren’t yet exempt since one assumes the legal team at Mickey D’s was able to successfully interpret how the new law would apply to them. So what Cohn is really saying is “nothing to see here citizen, move along, nothing to see” – a fairly routine attempt at spinning a situation in which the administration got caught with its pants around its ankles on the road in front of a school into one that’s “no big deal”.
But it is a big deal. And, if “these plans” are exempt, why? And which plans aren’t exempt. Is Burger King off the hook too? How about Taco Bell?
More importantly, where does the government get off telling a business how to spend its money? Cohn tells us it is because the want to make sure executive salaries and perks aren’t excessive and overhead is kept to a minimum. I say it is plain and simple unwarranted government intrusion that is becoming all too familiar since this administration has been in charge:
More important, the administration has yet to finalize the rule about how insurance companies spend their money (or what is known as the "Medical Loss Ratio".) It’s entirely possible the administration will phase in the requirement slowly. Most likely, then, McDonald’s employees who like these plans will get to keep buying them, at least for the immediate future.
Good thing we can read the bill now to find out what’s really in it, isn’t it?
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.