“Obama Takes Charge at Hurricane Command Center” blared the AFP
headline on Saturday. But it was just another disappointment for
Obama. By the time the over-hyped hurricane Irene blew into town,
there wasn’t anything for Obama to take charge of.
It could have been a big psychological moment for Obama’s
campaign but it was just another let down for the man. The stock
markets seemed to respond better to the East Coast earthquake last
week than to Barry’s recent speeches.
But Barry O’bama really has the luck of the Irish. With
every sentient American worried about our still-sinking economy,
we’ve been diverted from thinking about it all summer.
Gaddafi’s fall, Irene’s sweep of the
not-so-earthquake-shattered East Coast, and now Dick Cheney’s
memoir have taken turns dominating the news. Maureen Dowd’s
review of Cheney’s book seemed to say that last week’s
earthquake and the Irene minicane were the result of
Voldemort-Cheney casting another evil spell on Washington,
D.C.
Meanwhile Obama vacationed at Martha’s Vineyard,
contemplating how he would announce his new plan to revive the
economy and restore confidence in the financial markets. The
liberal media has been bewailing the fact that Obama has no
announced theme for his 2012 campaign. One sluggo even moaned that
the campaign website had not a single slogan on it. But there soon
will be slogans aplenty because the post-vacation Big Speech has
been hyped almost as much as Irene. Obama has a lot riding on
it.
The problem he faces is that neither he nor anyone on his
team can bring themselves to consider that reducing the size and
scope of government is the only way to restore confidence in our
economy among the financial markets, investors, and
voters.
From a bunch of press leaks and trial balloons, we mostly
know what’s coming. More “stimulus” spending, an “infrastructure
bank” funded with same, and some pretextual tax cuts will likely be
the major themes of the great speech to be delivered by our
redistributionist president after Labor Day. And now, thanks to OMB
Director Jacob Lew’s August 17 letter to all executive department
heads, we know a lot more.
Our economy isn’t officially in recession because economic
growth was all of 0.3% in the first quarter of 2011 and about 1% in
the second quarter. It’s got to be zero or lower to officially
classify as a recession, but 0.65% in six months is close enough
for government work. And the fact that unemployment still hovers
around 9% — for more than thirty months, the longest such period
since the Great Depression — is directly linked. Without economic
growth, there cannot be more jobs.
A few months ago, Nancy Pelosi wondered aloud why the
“Great Depression” bore that name because it wasn’t so great. Maybe
now even she understands it was about the magnitude of the
depression.
But neither Pelosi nor Obama can understand that growth
can only result from freeing the economy from governmental
suppression-by-suffocation. The first line of Lew’s letter says it
all: “The President has defined our challenge as demonstrating that
we can live within our means so that we can invest in job creation
and economic growth now and in the long term.”
Note well the cognitive dissonance. We have to live within
our means — the federal budget spending trillions — in order to
increase spending on job creation and economic growth. There will
be no spending cuts if Obama has his way, just a rearrangement of
who gets which part of the economic spoils.
And this will be Obama’s campaign theme announced in the
post-Labor Day speech. Obama’s re-election plan is to take money
from some federal programs to make it appear that the deficit is
being attacked. Instead, under his “new” plan, spending will be
increased overall to “create” jobs for which people will be hired
between now and November 2012, even if those people are laid off
the day after the election. No tax hikes will be proposed until
after Election Day.
Lew’s letter says that it reflects conversations in
cabinet meetings. It instructs all federal agency heads to submit
budget proposals for 2013 that are 5 percent below their actual
enacted discretionary spending for 2011 and to identify other
spending cuts that would bring the 2013 budget 10 percent below the
2011 actuals. Every agency that hasn’t been given explicit
exemption, Lew writes, has to do this.
Lew is not done there. He explains that the cuts should
not be across-the-board or reductions in mandatory spending or
creation of new “user fees” — i.e., taxes without the offending
three-letter label — but that the latter can be proposed as
alternatives to cuts.
The most important part of Lew’s lewd letter is this one,
where he directs federal agencies to spend more to create
jobs:
At the same time as your submission shows lower spending
overall, you should identify programs to “double down” on because
they provide the best opportunity to enhance economic growth.
Finding savings to support these investments will be difficult, but
it is possible if budgets cut or eliminate low-priority and
ineffective programs while consolidating duplicative ones; improve
program efficiency by driving down operational and administrative
costs; and support fundamental program reforms that generate the
best outcomes per dollar spent.
Lew continues that, consistent with those guidelines,
agency budgets should identify “priority investments related to
economic growth which the Department proposes to expand or
protect.”
In a budget speech months ago, Obama credited departing
Defense Secretary Bob Gates with $400 billion in defense spending
cuts (over ten years) and demanded that those cuts be doubled. When
the debt ceiling mess was punted over to the new congressional
“supercommittee,” if that group fails to agree on deficit
reductions, the legislation said, it will trigger massive cuts in
— you guessed it — defense spending as well as small cuts in
entitlement programs.
It’s all backwards. We conservatives always say that the
government can’t create jobs. That’s true with one major exception:
government spending can create jobs to perform those sovereign
functions in which the free market has no function.
There could be some government stimulus if money were
spent on the stuff that kills people and breaks things, on
restoring our space program to its pre-eminence of the 1960s and
1970s, and on increasing the abilities of our intelligence
agencies. But such spending — even if it were made — would not be
enough to restore economic growth unless it were accompanied by
massive spending cuts in the rest of the federal budget. And Barry
won’t permit that.
After Labor Day, when Obama delivers his speech, there
will be a flurry of analysis and commentary, most of it aimed at
how reasonable the president is being by “cutting” his budgetary
plans. Just keep these two invariable facts in mind: Obama will not
allow any major cuts in any near-term spending except in defense.
Any cuts his speech proposes will be in the future, long enough
away that he and Congress can just ignore them.
It’s just like Sen. Mitch McConnell said a couple of weeks
ago. We can’t cure our economy with Obama in the White House. All
we can do is prevent him from digging deeper the hole we’re already
in.
