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Right Turn
Posted at 09:30 AM ET, 08/18/2011

Obama’s incoherent economic agenda

Yesterday presidential contender Mitt Romney on a Chicago radio station reacted the president’s road trip and promised speech on jobs, “I think the reason he’s taking the time to wait for his next speech on the economy is that he frankly doesn’t know what to do. I mean, he hasn’t spent his life in the private sector. He doesn’t understand that jobs come and go and he’s looking for help.”

Normally, you’d chalk that up to campaign rhetoric, but in this case Romney has aptly articulated President Obama’s problem. He’s entirely in over his head. With the economy in the dumps and his own approval rating sinking, Obama is panicking and becoming increasingly incoherent in his prescriptions for economic recovery.

We are in a crisis. But the president is going on vacation. We need a pro-jobs agenda fast. But he’s waiting until September to make a speech. We need to curtail the debt, but he’s coming back with another stimulus plan. (Because the first one was such a success in taming unemployment?) He’s previously confessed that there weren’t those shovel-ready jobs, but he’s going to announce plans for roads and construction projects. He acknowledges that employers are struggling so he’s proposing another temporary payroll tax cut. But his big news will be an even grander bargain on the debt with huge new tax hikes.

The Post reports that this mish-mash is going to be a tough sell:

The president is thinking about proposing tax cuts for companies that hire workers, new spending for roads and construction, and other measures that would target the long-term unemployed, according to administration officials and other people familiar with the matter. Some ideas, such as providing mortgage relief for struggling homeowners, could come through executive action.
Obama also plans to announce a major push for new deficit reduction, urging the special congressional committee formed in the debt-ceiling deal this month to identify even more savings than the $1.5 trillion it has been tasked with finding.
In packaging the two, he will make the case that short-term spending can lead to long-term savings. . . . Compounding the White House’s challenge is the fact that many voters, particularly independents, who have been turning their backs on the president in recent surveys, want to see serious deficit reduction — a goal that might seem at odds with any program to boost spending.
Republican lawmakers signaled Wednesday that they are unlikely to embrace any new spending. . . .
White House allies, many of whom have pushed Obama in recent weeks to focus on job creation, said Wednesday that the president faces a stiff political test in explaining to voters the merits of short-term spending and long-term reduction of the federal deficit.

It’s not easy because it is nonsensical, and voters inherently understand that promises of cuts down the road coupled with immediate spending sprees are precisely how we got to this point: a massive debt, a downgraded credit rating and a paralyzed private sector. A senior Republican Senate aide this morning dismissed the president’s approach as the “same as always: ‘investments’ in union-friendly projects now, promises of austerity later.”

Speaker of the House John Boehner (R- Ohio) put out a statement yesterday pointing out the contrast between the Republican plans to spur private-sector growth and the president’s focus on government spending and borrowing:

The House has passed legislation to remove barriers to private-sector job creation, ease job-destroying regulations, expand American energy production, and significantly reduce our unsustainable debt burden. The House has led, but unfortunately we cannot act alone. Too many House-passed jobs bills remain stalled in the Democratic-controlled Senate, and we continue to urge our colleagues in the Senate to act.
“To get our economy moving, what the American people need from the President is leadership and serious solutions that reflect a true change in his approach to our economy and the role of government. We welcome him to our ongoing efforts to help create jobs, and look forward to seeing a detailed plan next month. It is my hope the President will offer specific proposals that depart from his previous policies and allow us to find common ground and work together to put Americans back to work. In the meantime, Republicans will continue to advance solutions that will reduce economic uncertainty and create a better environment for private-sector job creation.”

The president might have an easier time making his case to the American people if his ideas for job creation had worked, or alternatively, if he were offering something radically new. But he is not. In fact, this is not an economic plan but a political response to his nervous liberal base that is convinced the problem with the original stimulus was that it was too small. (If that was too small when unemployment was much lower, how big must the upcoming one be to make a dent in 9.1 percent unemployment?)

Obama is trapped by his base and his own ideology that demands an endless cycle of spending, borrowing and taxing. Even the loss of a AAA rating does not diminish the thirst for a growing public sector. But how do we pay for it? And how does any of that spur private-sector hiring?

Obama is right to be frantic. Gallup today reports: “Americans’ satisfaction with the way things are going in the United States has fallen back to 11%, the lowest level since December 2008 and just four percentage points above the all-time low recorded in October 2008.” Meanwhile, Texas Gov. Rick Perry and Romney are having a healthy competition about whose experience best prepares them to reverse the trajectory of the Obama economy. (“Each candidate pitches himself as the one with the skills and experience necessary to create jobs, the issue that voters consider paramount.”) But there is little doubt that Perry’s job record as governor and Romney’s record as a venture capitalist both are superior to the president’s own record. And both the Republicans offer, well, hope and change that we might have an Oval Office occupant who knows which policies encourage job growth and which terrify job-creators.

By  |  09:30 AM ET, 08/18/2011

Categories:  2012 campaign, Economy

 
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