With the economy sluggish and stagnating, you would think that economic growth ranks high on President Obama’s list of priorities for a second term. But of course, you would be wrong. Lefty Ezra Klein, who writes about economic policy for the Washington Post, has just published a well-sourced piece on “what Obama would do in a second term,” and the words “economic growth” are nowhere to be found.
This is no accident. With all due respect to the president, he is dangerously ignorant about economic matters. Indeed, he knows nothing about incentives and job creation, fiscal and monetary policy. Which is why we are suffering through the worst economic recovery since the Great Depression.
The most recent jobs report, in fact, found that the labor force participation rate — that is, the percentage of working-age people with a job or actively looking for work — declined to 63.6 percent in April. “That monthly decrease was the third in a row; and [it] marked the lowest level for that measure since December 1981,” reports Thomas Olson in the Pittsburgh Tribune-Review.
Oh, to be sure, according to Klein, “Everyone from Obama’s closest advisers to the GOP’s top tacticians agrees that the first year of a second term — and perhaps even more than that — would be ‘fiscal.’ That is to say, it would be devoted to budget and tax issues.”
But raising taxes to fund the behemoth state — which is clearly what Obama has in mind for a second term — doesn’t promote economic growth. And so, debt reduction, in itself, doesn’t necessarily help anyone. What matters is how the debt is reduced or managed.
If the debt is managed in a way that incentivizes the entrepreneurial class and the free market, then that is a good thing. This will promote economic growth and job creation. But if debt reduction becomes simply a convenient excuse to punish entrepreneurs and innovators with higher taxes and ill-advised regulation, then economic growth and job creation will suffer.
Yet, “beyond the deficit,” reports Klein, “Obama’s advisers see two big unfinished pieces of business from the first term: climate change and immigration reform.”
Climate change and immigration “reform”? Excuse me, but the biggest piece of “unfinished business” is economic growth, without which everything else becomes impossible. And if the president doesn’t understand this, then it’s time for a new president. Now.