President Obama’s so-called Jobs Plan has nothing to do with
jobs and economics. On that score, it is already a proven failure.
Rather, the plan is pure politics: a ploy to make Republicans bear
the responsibility for the President’s economic fiasco, with proven
to fail policies he knows the Republicans were elected to stop and
can’t support. The political calculation is that the public is too
stupid to figure out both the economic fallacies in the plan, and
the dishonesties in the political attack, which accuses Republicans
of the exact political cynicism in which the President is
engaged.
That is a Saul Alinsky strategy: accuse your opponents of
doing what you are doing. Recall that the President previously
served as a tutor of Saul Alinsky political tactics.
In the present economic crisis, such cynical political
manipulation is a disgraceful abdication of the responsibilities of
his office. This is why Congress, rather than pass Obama’s phony
jobs plan, should be asking him to resign.
Answering the President
In last Saturday’s weekly radio address, the President
reiterated the political ploy of his jobs plan. If Republicans
insist on opposing his jobs plan, Obama demanded an explanation to
the public as to why. Then he taunted, if they don’t support his
plan, where is their plan?
This is where the assumption that the public is stupid
begins. The obvious fallacies in Obama’s so-called jobs plan have
been reiterated over and over, and Republicans have long been
advocating far better, more effective job plans.
Obama’s jobs plan is about half the size of his nearly one
trillion-dollar 2009 so-called stimulus plan, but otherwise
contains the same policies. That 2009 stimulus didn’t stimulate
anything except runaway government spending, deficits, and debt.
Unemployment has soared since then, and remained stubbornly high,
as Obamanomics, including the so-called stimulus, has
short-circuited the traditional American recovery. That recovery is
now long overdue, as has been explained in this column numerous
times.
Part of the jobs plan is devoted to increased government
spending on supposed infrastructure. That recalls the laughable
“shovel ready” jobs of Obama’s 2009 stimulus. Another part is
increased spending to bailout spendthrift Democrat states, which
Obama calls hiring more teachers, firemen, and cops (which is a
state and local government function).
But economic growth is not based on increased government
spending, a fallacy which Wall Street Journal senior
economics writer Steve Moore has rightly labeled “tooth fairy”
economics. That is because the money for such spending needs to
come from somewhere, and so drains the private sector to the extent
of such increased government spending, leaving no net effect in any
event.
What drives economic growth and prosperity is incentives
for increased production, as Reaganomics proved. Obama’s assault on
such incentives is why trillions are sitting on corporate and bank
balance sheets, and America is suffering a capital strike and
capital flight. The Occupy Wall Street protestors in threatening
property and profits are just further undermining incentives and
contributing to that capital strike and capital flight, which only
contributes further to extended and increased
unemployment.
The other half of the jobs plan includes temporary payroll
tax cuts, which are a continuation and expansion of supposed
temporary payroll tax cuts already in place. But such temporary tax
reductions do not stimulate economic growth and jobs either, as
permanent cuts and incentives are necessary for permanent jobs.
That was just proved by the previous temporary tax cut that Obama
already put in place, which failed to promote the long overdue
recovery.
Moreover, as I have previously explained, continuing and
expanding that failed temporary payroll tax cut on Obama’s grounds
that expiration of the “temporary” cut would be a tax increase on
the middle class is dangerous because long term it would eviscerate
the financing for Social Security. This is why Republicans should
not support this component of the “jobs plan” either. Notice that
the phony AARP is once again in the tank for Obama and the
Democrats, not uttering a peep about this growing fundamental
assault on Social Security.
But even worse than the 2009 stimulus is that this current
half stimulus echo is accompanied by Obama’s proposal for $1.5
trillion in permanent tax increases. That now includes
Obama’s support for a 5% millionaires’ surtax. Those permanent
increases only further reduce incentives for increased production,
and only contribute further to economic downturn and stagnation
under any economic theory.
Those tax increases, moreover, would come on top of all
the tax increases Obama has already enacted under current law for
2013, of which major media institutions as well as most of the
public are unaware. In that year, again, the Obamacare tax
increases go into effect, and the Bush tax cuts expire, which Obama
has refused to renew for the nation’s job creators, investors, and
more significant small businesses. Under those tax increases, the
top tax rates for almost every major federal tax will soar, as I
explain in a new Encounter Books publication coming out next week,
Obama and the Crash of 2013. All except the corporate
income tax, which is already virtually the highest in the
industrialized world, with no relief in sight under
Obama.
That plus another $1.5 trillion tax increase, including a
5 percent millionaires surtax, is just what put the “Great” in the
“Great Depression” in the phraseology of Amity Shlaes in her book
The Forgotten Man. The Republicans are supposed to support
this to create jobs?
The Foolish Politics of the Jobs
Plan
Obama said in his weekly radio address on
Saturday,
But rather than listen to you and put folks back to work,
Republicans in the House spent the past couple of days picking
partisan ideological fights. They’re seeing if they can roll back
clean air and water protections…. They’re not focused on the
concrete actions that will put people back to work right now. Well,
we’re going to give them another chance to spend more time worrying
about your jobs rather than keeping theirs…. And if they vote no on
that, they’ll have to tell you why.
But the people elected the historic, landslide Republican
majorities of 2010 precisely to stop the sort of foolishness in the
Obama jobs plan. And I just explained above the economics of why
Republicans should vote no on that plan. That basic economics is
why the people sent the Republicans to Washington to vote no on the
plan.
Moreover, even most Congressional Democrats know this is
true. That is why Obama’s Jobs Plan cannot pass even the
Democrat-controlled Senate, and no House Democrat has even
introduced the plan in legislation. They know what the people said
in 2010, and fear what they will say in 2012. So Obama needs to get
his own Democrats in order before blaming the Republicans. But
Obama thinks the public is too stupid to notice that even
Congressional Democrats have failed to support the obviously
foolish Obama jobs plan.
But Obama has answered his own question as to why the
Republicans oppose his plan. As
quoted in the Washington Post on October 7, the
President explains: “Each time, what we’ve seen is games-playing, a
preference to try to score political points rather than actually
get something done.” The Post helpfully elaborated on the
President’s message as, “while he has worked to improve the
economy, the Republican opposition has chosen a strategy focused on
denying him a second term rather than putting the country back to
work.”
Note that Reagan never accused his Congressional opponents
of opposing him in bad faith, rather than over disagreements of
principle. But that accusation of bad faith opposition from the
Republicans is the centerpiece of Obama’s desperate campaign now to
avoid fatal political responsibility for the increasingly 1930s
style results of Obamanomics. Instead of supporting what will work
to get the country back to work, it is Obama who is pursuing a
political strategy to blame the Republicans for the bad economy if
they don’t support yet another warmed over version of his
repeatedly failed, braindead, Keynesian economics, which the voters
elected them to stop in 2010.
If Obama cannot understand the economic reasons why
Republicans must oppose his wasteful and ineffective jobs plan,
then he doesn’t have the smarts to lead the country after all, and
all he could do to help end the misery is resign. And if Obama is
just playacting that he cannot understand any reason for opposing
his jobs plan other than political bad faith, then he should be
asked to resign for that disgraceful political manipulation in the
midst of this dramatic national crisis.
The smartest thing the Republicans could do is pass not
the Obama Jobs Plan, but instead what will work to create jobs and
get a real, way overdue, economic recovery underway. Then they can
demand that if President Obama stands in the way, he must
explain to the public why. Fortunately, Congressional Republicans
have already proposed a great alternative of their own, which would
create an economic boom. They just need to pass it out of the House
now, and challenge the Democrats.
The Republican Alternative
Last week, Senate Republicans led by Senators John McCain
(R-AZ), Rand Paul (R-KY), and Rob Portman (R-OH) introduced the
Republican jobs plan, the Jobs Through Growth Act. House
Republicans have already supported or even passed several
components of that plan.
That plan includes both personal and corporate tax reform,
closing loopholes in return for reducing rates. The top rate for
both the personal and corporate tax would be reduced to 25 percent.
The Ryan budget already passed by the House would apply that rate
to family incomes over $100,000, with a 10 percent rate below that.
These lower tax rates are crucial to incentives for increased
production, because lower rates allow producers to keep a higher
percentage of what they produce. That 25 percent corporate rate
would restore international competitiveness for American companies,
as most industrialized countries maintain rates at or below
that.
The plan would also involve a Balanced Budget Amendment to
the Constitution with firm caps on government spending, and a
supermajority requirement for raising taxes. In addition, the plan
would increase the President’s power to cut spending, with a line
item veto. The plan would also cut future taxes and spending by
trillions by repealing Obamacare.
The plan would also slash runaway federal regulation
through the REINS (Regulation from the Executive In Need of
Scrutiny) Act. That would require Congressional approval of any
regulation costing $100 million or more, consistent with the
framework of the Constitution, which grants the legislative power
to Congress. The plan would also repeal Dodd-Frank and all of its
new regulatory burdens on the finance industry, freeing it to
provide essential credit to businesses and consumers. Those
regulatory burdens are estimated to destroy nearly 5 million more
jobs by 2015.
The EPA and other federal agencies are required to
consider the impact on jobs and the economy before issuing any new
regulation, with an estimate of the jobs to be lost. It also frees
farmers from costly new dust regulations. In addition, the plan
would require the Interior Department to allow offshore drilling
exploration, and the entire Administration to expedite permits and
leases for energy production. It also removes EPA’s authority for
costly, economically destructive, and unnecessary greenhouse gas
regulation.
The plan overall includes 28 components likely to create
an overall economic boom if enacted. There’s your Republican
alternative, President Obama.
