Friday, September 09, 2011

Round-up on the President's speech: More Wimpy's economics

Fact-checking the President's claim that "[e]verything in this bill will be paid for." Well, if paid for means that he'll propose how to pay for it a week later by postponing the bill until some time in the future. Actually, it's more spend now, take out an IOU to be paid back later. Or just ask the debt supercommittee to come up with a bigger proposal when there is no confidence that they'll come up with the trillion and a half of savings they're already charged to come up with.

It's just more from the President's Wimpy approach to economics: Obama will gladly pay us Tuesday for a stimulus today.

Chris Cillizza notes the disparity between what Obama is proposing and his tone and rhetoric. He was aggressive-sounding, but then tried to pretend that he was proposing only things that the GOP already supported.

Dana Milbank notes that the GOP response to Obama's speech was either to laugh or ignore him. Obama might be passionate, but he's become mere background noise.

Michael Barone has a nice summary of the extremely weak tea in Obama's proposals.
Barack Obama looked and sounded angry in his speech to the joint session of Congress. He bitterly assailed one straw man after another and made reference to a grab bag of proposals which would cost something on the order of $450 billion—assuring us on the one hand that they all had been supported by Republicans as well as Democrats in the past and suggesting that somehow they are going to turn the economy around. He called for further cuts in the payroll tax (which if continued indefinitely would undermine the case of Social Security as something people have earned rather than a form of welfare) and for a further extension of unemployment insurance (perhaps justifiable on humanitarian grounds, but sure to at least marginally raise the unemployment rate over what it would otherwise be). He called for a tax credit for hiring the long-term unemployed (unfortunately, these things can be gamed). He gave a veiled plug for his pet project of high-speed rail (a real dud) and for infrastructure spending generally (but didn’t he learn that there aren’t really any shovel-ready projects?). He called for a school modernization program (will it result in more jobs than the Seattle weatherization program that cost $22 million and produced 14 jobs?) and for funding more teacher jobs (a political payoff to the teacher unions which together with other unions gave Democrats $400 million in the 2008 campaign cycle). “We’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it would do for the country.” Yeah, sure. Like the screening process that produced that $535,000,000 loan guarantee to now-bankrupt Solyndra. And Congress should pass the free trade agreements with Panama, Colombia and South Korea. Except that Congress can’t, because Obama hasn’t sent them up there yet in his 961 days as president.
The likelihood that any of this would actually increase employment is nil. But then this wasn't about actually creating jobs, but about giving Obama something to talk about as he campaigns to keep his job. It was all about the kabuki theater of the Obama pretending to actually having a plan to reverse the terrible unemployment that has loomed over his presidency. Of course, the Democrats have already tried most of this and it didn't work when they spent a trillion dollars to do it earlier. Why should spending $400 billion now have any different result.

Philip Klein pinpoints how this speech was just a campaign speech that perhaps might excite liberals who haven't learned from their earlier mistakes. And Klein wonders if Obama will propose "paying" for his jobs plan just as he approved "paying" for Obamacare.
I wonder if this next one will come with actual details that can be scored by the Congressional Budget Office. Another thing to consider -- will the $450 billion in costs be fronloaded over the next two years, while the supposed "savings" will be spread out over 10?
Here's the short takeaway from John Podhoretz contrasting the liberal and conservative approaches to bringing down unemployment.
So there’s the big difference between Obama and his ideological rivals -- he believes in government’s guiding hand, and his rivals believe in reducing the burden of government as a means of clearing the decks for economic growth.
David Brooks notes that most of the President's proposals won't work but he deserves another try because the alternative - a double dip recession - is just too terrible not to try something probably fruitless. Yeah, that's the attitude we need.
Check out the video remix of Obama's speech.
As the WSJ notes, there is an essential fallacy to Obama's policies.
If President Obama's economic policies have had a signature flaw, it is the conceit that by pulling this or that policy lever, by spending more on this program or cutting that tax for a year, Washington can manipulate the $15 trillion U.S. economy to grow. With his speech last night to Congress, the President is giving that strategy one more government try.
As the WSJ explains, temporary spending and tax cuts aren't going to be the solution to employers' reluctance to hire new workers.
But what happens in 2013 when those tax rates expire and Mr. Obama pledges to hit thousands of those same small businesses with higher tax rates on income, capital gains and dividends? He seems to think businesses operate only in the present and will ignore the tax burdens coming at them down the road. This is the same reasoning that assumed that postponing ObamaCare's tax and regulatory burdens until 2014 would have no effect on business hiring in the meantime.
Yup, that's the sort of economic illiteracy the liberals demonstrate. And with Obama's chants about passing this bill right away, let's not forget, as the WSJ says that,
This ignores that Mr. Obama has been the least obstructed President since LBJ in 1965 or FDR in 1933, which is how we got here.

He passed $830 billion in stimulus, $3 billion for cash for clunkers, $30 billion in small business loans, $30 billion for mortgage modification, the GM-Chrysler bailouts, ObamaCare, Dodd-Frank, credit card price controls, Build America Bonds, jobless benefits for a record 99 weeks, and more.

The only priorities that a Democratic Congress blocked were cap-and-tax and union card check, and both of those would have further damaged growth and jobs. Even last December, after Republicans had retaken the House, Mr. Obama won his one-year payroll tax cut, more jobless benefits and most of what he wanted.

The unfortunate reality is that even if Republicans gave Mr. Obama everything he wanted, the impact on growth would be modest at best. Washington can most help the economy with serious spending restraint, permanent tax-rate cuts, regulatory relief and repeal of ObamaCare. What won't help growth is more temporary, targeted political conjuring.
Here is Jennifer Rubin's takeaway from Obama's speech.
President Obama tonight seemed simultaneously angry and nervous as he rushed through a speech that was transparently not worthy of a joint session of Congress. His great idea: Cobble together a mish-mash of old ideas (infrastructure spending, a payroll tax cut) and pay for it later, by asking the debt commission to come up with additional deficit reductions later, preferably by hiking taxes on the rich. The second half of the speech was a heated campaign rally aimed at a cartoon version of his future opponent.