Even by Keynesian standards Obamanomics is an embarrassing flop — yet its only solution is more of the same.
President Obama thinks he is so clever in continuing to try to trick us into believing his disgraceful record on the economy and jobs is really the fault of the Republicans in Congress. You see, 10 months ago in September, 2011, Obama proposed the American Jobs Act. But Congressional Republicans refused to pass most of it. So that means that the continued high unemployment and worst recovery from a recession since the Great Depression must all be their fault.
The Obama American Jobs Act was just a brain-dead half-brother of the original nearly $1 trillion Obama “stimulus.” That so-called stimulus will go down in history as not stimulating anything except government spending, deficits and debt. Of course, that won’t mean anything to the Keynesians of the future, who just as the Keynesians of today will be practicing not economics but public relations for neo-socialist politicians.
After the first nearly $1 trillion “stimulus” didn’t work, Obama’s innovative idea was to do basically the same thing, but only half as large at about $500 billion. Part of this Stimulus II bill would go again to finance the building of so-called infrastructure. As former Obama OMB bureaucrat Jeffrey Liebman wrote in the Wall Street Journal of June 22:
[T]he crash of the housing markets continues to take a toll on construction workers. There are still two million fewer construction workers employed than when the recession started in 2007. Yet Congress has failed to act on the president’s plan to put construction workers back on the job rebuilding our roads, bridges and airports.
But that is what Stimulus I was supposed to do, remember? If it didn’t work then, why are we talking about coming back again now to do the same thing, only half as much? Because President Obama has no new ideas beyond what he learned in college freshman economics from liberal left “academics.”
Construction industry experts have tried to tell the community organizer Democrats that housing construction workers are not actually trained or qualified to build roads, bridges and airports. But “progressive” Keynesians, like all “Progressives,” already know everything about everything, and so are not interested in what construction industry “rednecks” have to say.
Real economists have also tried to explain to the Keynesian PR flacks that infrastructure building projects are not well suited to counter economic downturns because they suffer such long lead times to get up and running. That is why President Obama ended up joking in public that his supposed “shovel ready” construction projects financed by Stimulus I turned out to not be so “shovel ready” after all. Haha, America, the joke is on you.
The bipartisan 2012 Highway Bill finances over $100 billion in spending on infrastructure, primarily for the nation’s roads and bridges, more than any other nation. Congressional Republicans overwhelmingly supported that rational and orderly spending. With our nation facing a historic fiscal crisis, asking us to commit to hundreds of billions in further infrastructure spending is a reckless abuse of authority we should have come to expect from Democrats.
Taxpayer Bailouts of State and Local
Another part of Obama’s “son of stimulus” proposal amounts to a bailout of the most liberal, spendthrift state governments by taxpayers in more conservative states nationwide. Liebman helpfully explains on behalf of his former employers in the Obama Administration, “One of the largest drags on our economy has been the layoffs of public employees like teachers, firefighters and police officers due to state budget cuts.” You see, it’s all so simple. According to Obama’s liberals, getting state spending under control is actually the root of the problem.
So Obama would reverse that by providing federal taxpayer funds to the states to hire hundreds of thousands of state bureaucrats. No, there have been no real layoffs of firefighters and police officers overall, let alone 450,000 as Liebman argues. But anyway, while hiring teachers, firefighters, and police officers may be a national government responsibility in Indonesia, it is a state and local government function in America. Until Obamanomics, where teachers, firefighters, and police officers serve as props for a federal taxpayer bailout of spendthrift states like California and Illinois.
But such federal funding for states was a central component of Stimulus I. If it didn’t work then, why are we talking about coming back again to do the same thing now, only half as much? Because President Obama’s community organizer economics is out of ideas on how to spark renewed economic growth and prosperity.
Obama’s Temporary Tax Cut
A final component of Obama’s Jobs Plan is to extend his 2% cut in the Social Security payroll tax for another year. But such temporary tax reductions do not stimulate jobs and economic growth, as permanent cuts and incentives are necessary for permanent jobs and growth. That was proved yet again last year when this same tax cut was already in force for a year, and failed to do anything noticeable to produce economic recovery and jobs.
Nevertheless, congressional Republicans joined in extending the payroll tax cut anyway, because they did not want to be accused of increasing taxes on the middle class by letting the “temporary” Social Security tax cut expire. This shows that Social Security financing is endangered now, as any expiration of the “temporary” tax cut will be assailed as a tax increase on the middle class. Yet we hear not a peep from AARP, supposedly a watchdog for seniors, but in reality a kept lapdog pet for the Democratic National Committee, as we learned during the Obamacare debate in 2010. Just take this message to your friends and family — friends don’t let friends join the highly partisan AARP. There are better, alternative, conservative organizations for seniors today than this dishonest, rip-off organization.
But, notice, this temporary tax cut has failed yet again this year to help stimulate jobs and economic recovery. That reflects Obama’s completely inadequate, community organizer understanding of tax policy. What makes the economy boom is not just any tax cut, but permanent cuts in tax rates. That is because it is the rates that determine what percentage producers can keep out of what they produce, and therefore determine the incentives for productive activities, such as savings, investment, expanding businesses, starting businesses, job creation, and work.
President Kennedy understood it. Kennedy proposed legislation to reduce income tax rates across the board by 30%, similar to the Kemp-Roth tax cuts that President Reagan embraced and that worked so spectacularly. Kennedy explained:
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online