It would appear that everything the Democrats want to spend money on — no matter what it is — should be supported as stimulus for the economy. It also appears that the only things they have stimulated are the debt and unemployment. So the answer, of course, is more of the same. How much stupidity have the Democrats created or saved? Do we have enough zeros?
In his column today, WaPo’s Harold Meyerson begs President Obama to “go big on the economic solutions“:
It’s time to propose a massive second stimulus, offset by some serious tax hikes and budget cuts once the economy regains a semblance of good health. . . .
Economically, the case for a massive stimulus is a good deal stronger than the case for the rather minimal one that you’re calling for — extending unemployment insurance and the payroll tax cut, and establishing an infrastructure bank. A major stimulus is the only conceivable source of substantially increased economic activity and jobs for at least several years. . . . .
Which leaves us with this stark reality: If the federal government doesn’t intervene massively to help the economy, the economy will oscillate between neutral and reverse for many years.
What should that intervention look like? First, don’t just extend the 2-percentage-point reduction in the employee payroll tax, which is normally set at 6.2 percent. Eliminate the tax altogether, for employers and employees, at least temporarily. It would increase by $2,100 the take-home pay, and buying power, of workers making $50,000 annually. It would make it easier for small businesses to resume hiring.
Republicans have been cool even to extending the 2-percentage-point reduction in the employee tax. . . . In fact, the presumably anti-tax GOP habitually supports taxes (payroll and sales, for instance) that don’t annoy the rich — and in the case of the payroll tax, Republicans want to raise it. This is not, however, a politically sustainable position when Americans are struggling to get by.
The payroll tax can’t be suspended indefinitely without compromising Social Security, which it funds. Its suspension should end when unemployment falls to a specified level — say, 7 percent.
We’ll need other, less fleeting forms of stimulus, too. You should call for renewing aid to state and local governments. Infrastructure bank or no, you need a long-term program to make our nation navigable again. (Our knowledge of how to get from A to B has improved, thanks to global-positioning technology, even as the road, airway and rail connections between A and B have declined.)
Those kinds of projects may take years to realize. Your first stimulus failed to establish a fast track for creating less-capital-intensive jobs in maintenance, rehabilitating buildings, and child- and elder care. It deferred job creation to state and local governments, which have taken forever to set up even such relatively low-tech endeavors as home-weatherization projects. This time around, you should acknowledge the bottlenecks in your first stimulus and call for a federal job corps to do this kind of work.
In other words, Meyerson wants more spending, and more taxes, other than the tax that funds our already bankrupt Social Security system, which he wants to stop funding for a few years or so. In other words, he wants Obama to propose a bigger version of what the Democrats enacted in the first two years of his administration.
Yet there is no evidence whatsoever that such measures had any positive effect on the economy or employment. None. To the contrary, there is a strong case to be made that the Democrats’ spending, redistributive policies and threat of tax increases are a major cause of the continued economic malaise.
Just a few days ago, columnist Froma Harrop was busy attacking Tea party activists and House Republicans associated with them in, shall we say, rather harsh terms:
The tea party Republicans have engaged in economic terrorism against the United States–threatening to blow up the economy if they don’t get what they want. And like the al-Qaida bombers, what they want is delusional: the dream of restoring some fantasy caliphate. . . . That the Republican leadership couldn’t control a small group of ignoramuses in its ranks has brought disgrace on their party.
Today, Ms. Harrop laments the bankruptcy of a small town back East:
CENTRAL FALLS, R.I. — The stock market plunged over 500 points last Thursday, but no one seemed very perturbed about it in this tiny factory town. Three days before, Central Falls had filed for a Chapter 9 bankruptcy. These working-class folk see bottoms fall out on a regular basis.
* * *
If any U.S. city was destined to go bankrupt, it was this one — though Vallejo, Calif., beat it by three years. Like Vallejo, ruinous public-employee contracts sent Central Falls over the edge. Unlike the San Francisco suburb, Central Falls has a smaller, less economically diverse tax base. (The median household income is under $33,520 a year.) Its local government at the time of the bankruptcy filing was far more corrupt than Vallejo’s.
On this thin tax base, Central Falls faced an annual deficit of $5 million and unfunded pension obligations of $80 million. For a long time, its police and firefighters could retire on full pensions after only 20 years of service. So even though their monthly payouts were not princely, workers could start collecting them — and free health coverage for life — while in their 40s. Bankruptcy lets a city tear up union contracts and start over.
* * *
Being able to erase foolish spending decisions made in more prosperous times is a tempting proposition. Very few cities have tried bankruptcy so far, but many are considering it.
The experience of Vallejo offers some warnings on the dangers of going the bankruptcy route, however. Harrisburg, Pa., and others on the brink, take note.
Vallejo’s bankruptcy resulted in a $9.5 million legal bill and a black eye to its reputation. Bankruptcy is a booming announcement that the local government is dysfunctional. For some businesses, having the city’s name on the letterhead becomes an embarrassment. A lawyer and real estate broker recently moved out of Central Falls, not because he didn’t like the city, but because its name has become a stigma associated with failure.
But like other depressed factory towns, Central Falls retains its reputation as a nice place filled with nice working people. Less than an hour from Boston and loaded with some lovely housing now selling super-cheap, the city will rise. Its next generation, meanwhile, is playing soccer while the sun shines.
Central Falls may be a nice place full of nice people, but they spent too much money, made promises they could not keep, drove out businesses, and went broke. Who are the “terrorists” — the ones who desroyed the economic viability of their own communities or the ones trying to clean it up? It is amazing that people such as Harrop choose to attack the latter while giving the former a complete pass.
Today, the stock market did something it has not done since the Jimmy Carter administration — achieve a nine session declining streak. Obama as a Carter retread is increasingly looking like a best-case scenario.
“I think the key is not to get too bogged down in detail.” Seriously.
Even with this kind of fluff, Obama can’t play it straight:
“If somebody asks about taxes, nobody is really interested in hearing what precise marginal tax rate change would you like to see in the tax code,” Obama said. “What they want to know is that our campaign stands for a fair, just approach to the tax code that says everybody has to chip in, and that it’s not right if a hedge fund manager is being taxed at a lower rate than his or her secretary.”
Really, “everybody has to chip in”? OK, how about the 49% who pay no federal income taxes whatsoever? Somehow, I don’t think Obama wants them paying their fair share.
On Afghanistan and Iraq, Obama said: “If somebody asks about the war, whether it’s Iraq or Afghanistan — if it’s Iraq, you have a pretty simple answer, which is all our folks are going to be out of there by the end of the year. If it’s Afghanistan, you can talk about, look, we think it’s time for us to transition to Afghan lead and rebuild here at home. So, again, it’s a values issue: Where are we prioritizing our resources?”
Out by the end of what year? I am not in favor of abandoning Iraq or Afghanistan, but who on earth would believe Obama’s time-tables at this point, even if they wanted to? Every year, its “by the end of the year,” and the deadline keeps slipping.
That’s one of the essential problems with Obama — he just makes stuff up. The end of this year becomes the end of next year, which later becomes the end of the year after that. Taxing hedge fund managers becomes taxing small business owners and those trying to acquire some modicum of wealth, and will eventually become taxing the middle class — without ever openly advocating for it, mind you — to pay for an ever-expanding welfare and regulatory state.
“Federal Reserve policy makers may start weighing additional steps to prop up the recovery after growth fell below 1 percent in the first half of this year and economists began cutting second-half growth forecasts.” The solution for government failures is always more government intervention.
Really. That’s what Eugene Robinson says:
People may dislike paying taxes, but they dislike unemployment more. Progressives should talk about bringing the nation back to full employment and healthy growth — and how this requires an adequately funded government to play a major role.
The next time Moe asks about the big idea, Democrats, say “jobs.” You might avoid a slap on the noggin and a poke in the eyes.
Here’s the problem. The Democrats have been throwing money and government programs at the “jobs problem” since Obama came into office. Their policies have been an economic disaster. So what does Robinson want? More of the same, of course!
That is not a “Big Idea,” to use Robinson’s phrase. It is a Bad Idea.
Government intervention in the economy is strangling it. The reason we are not drilling for oil in the U.S. is government. The reason businesses are not hiring is government. The reason people bought houses they couldn’t afford (or were unwilling to pay for) was government. The reason health care costs are predicted to skyrocket over the next few years is, you guessed it, government.
The Democrats controlled both houses of congress and the presidency for two full years. They pursued their progressive agenda with abandon and tried to “bring[ ] the nation back to full employment and healthy growth” through a massively funded government playing a major role in the economy. What has that brought us? Nothing good. Instead of a vibrant economy we have a stagnant one.
The solution to failures of government intervention is not more government intervention. And the solution for what ails progressives is not a bumper sticker that says “Jobs.”
Jennifer Rubin has posted a great ad by the group Concerned Women for America that is a must see. It is effective because it is so low key, and almost sweetly takes the wood to big spenders in Washington without mercy. If I were running a campaign for a conservative candidate anywhere, I would be itching to run this ad. Good stuff.
By the way, the reaction by the campaign of Sen. Jon Tester (D-Mont.) is classically stupid. Take notes, champ — do some investigation before attacking those who run ads against you. This is NOT the kind of response a competent campaign draws from third party advocates:
“The Tester campaign’s assertion that CWA lobbied Congress against child pornography protection is absolutely false. To the contrary, CWA strongly supports tough penalties for those who peddle in child pornography. And Senator Tester should have known better—it is publicly known that I was personally the victim in an attempted sexual attack by a suspected pornography addict while I was pregnant with my daughter. I was rescued by a passing motorist, and have spent the last 15 years as a champion against child pornography and indecency—including more than 3 years of public service working on this issue at the FCC. Concerned Women for America demands an apology from Senator Tester for this false and unseemly attack.”
Ouch, and well-deserved.
In a post about the debt ceiling debate at NRO’s The Corner, Michael Cannon makes a point in parentheses that instead deserves emphasis:
As a policy matter, I want to cut the federal government’s claim on the people’s economic resources by much more than 40 percent. (Dear critics, please note that it’s no kind of objection to say that cuts of that magnitude would cause vulnerable people pain. The alternatives — higher taxes or a Greek-style debt crisis — would also cause vulnerable people pain. In my estimation, they would cause more pain to greater numbers of vulnerable people.)
Precisely. The Democrats wail that any spending cuts will necessarily harm certain folks. That’s likely true, although I would argue that properly targeted cuts would mostly remove undeserved subsidies rather than impose true hardship. But whether or not, for example, farmers deserve subsidies that cost tax dollars and increase the cost of food for the rest of us, cutting subsidies people have relied upon for years will cause hardship.
But what is the alternative? Continuing their spending binge will only bring greater pain tomorrow, and grasping after additional tax dollars will only prolong the hangover.
The problem is, you eventually run out of other people’s money. What’s their plan then? It is, unfortunately, the same as the President’s plan now. There just isn’t one.
My name’s Ronnie Bryant, and I’m a mine operator…. I’ve been issued a [state] permit in the recent past for [waste water] discharge, and after standing in this room today listening to the comments being made by the people…. [pause] Nearly every day without fail — I have a different perspective — men stream to these [mining] operations looking for work in Walker County. They can’t pay their mortgage. They can’t pay their car note. They can’t feed their families. They don’t have health insurance. And as I stand here today, I just … you know … what’s the use? I got a permit to open up an underground coal mine that would employ probably 125 people. They’d be paid wages from $50,000 to $150,000 a year. We would consume probably $50 million to $60 million in consumables a year, putting more men to work. And my only idea today is to go home. What’s the use? I don’t know. I mean, I see these guys — I see them with tears in their eyes — looking for work. And if there’s so much opposition to these guys making a living, I feel like there’s no need in me putting out the effort to provide work for them. So as I stood against the wall here today, basically what I’ve decided is not to open the mine. I’m just quitting. Thank you.
When you make it too expensive and too difficult to operate a business, businesses will shut down. And then the President will lecture you for not risking your money on an enterprise the government has made too risky to warrant the investment.
“House Minority Whip Steny Hoyer (D.-Md.) said on the House floor last night that if the balanced budget amendment Republicans are supporting is ratified and included in the Constitution it would make it ‘virtually impossible’ to raise taxes.” I can live with that.
But is that really what the Republicans are proposing? Of course not:
The push for a balanced budget amendment is part of the Republican Cut, Cap and Balance plan. This plan would increase the federal debt limit by $2.4 trillion in exchange for cutting federal spending by $111 billion next year and for congressional passage of a balanced budget amendment that, if ratified, would require supermajority votes in Congress to increase taxes, increase the debt limit, or spend more than 18 percent of GDP in a given fiscal year.
It would certainly make it harder to raise taxes (or spend more than the historical baseline of 18% of GDP per year), but it would not be virtually impossible. It would require wide-spread bipartisan commitment to any tax increases or expensive spending proposals.
And here I thought we were supposed to be in favor of “balanced” approaches and bipartisanship. This is all so confusing.
A couple of days ago, it was Steve Wynn telling us that the Obama “administration is the greatest wet blanket to business, and progress and job creation in my lifetime.”
Today, Home Depot co-founder Bernie Marcus weighs in at Investor’s Business Daily:
IBD:What’s the single biggest impediment to job growth today?
Marcus: The U.S. government. Having built a small business into a big one, I can tell you that today the impediments that the government imposes are impossible to deal with. Home Depot would never have succeeded if we’d tried to start it today. Every day you see rules and regulations from a group of Washington bureaucrats who know nothing about running a business. And I mean every day. It’s become stifling. . . .
IBD: President Obama has promised to streamline and eliminate regulations. What’s your take?
Marcus: His speeches are wonderful. His output is absolutely, incredibly bad. As he speaks about cutting out regulations, they are now producing thousands of pages of new ones. With just ObamaCare by itself, you have a 2,000 page bill that’s probably going end up being 150,000 pages of regulations.
IBD: Washington has been consumed with debt talks. Is this the right focus now?
Marcus: They are all tied together. If we don’t lower spending and if we don’t deal with paying down the debt, we are going to have to raise taxes. Even brain-dead economists understand that when you raise taxes, you cost jobs.
IBD: If you could sit down with Obama and talk to him about job creation, what would you say?
Marcus: I’m not sure Obama would understand anything that I’d say, because he’s never really worked a day outside the political or legal area. He doesn’t know how to make a payroll, he doesn’t understand the problems businesses face. I would try to explain that the plight of the busi nessman is very reactive to Washington. As Washington piles on regulations and mandates, the impact is tremendous. I don’t think he’s a bad guy. I just think he has no knowledge of this.
I am sure the community-organizer-in-chief would beg to differ. After all, Bernie Marcus only created 321,000 jobs. Obama & Co. “created or saved” millions of jobs. Just ask them. They’re economic geniuses, they’ll tell you.
Via Jim Treacher.
Smitty sums up Contessa Brewer’s, er, blunder yesterday. Watching her sputter after being whacked over the head with a polite response is quite entertaining.
The first rule of cross-examination is you’ve got to know, or not care, what the answer is to your questions. Since journalism schools clearly don’t do much teaching about asking simple open-ended questions to elicit an answer instead of making a point, maybe they should try teaching at least the basics of adversarial questioning.
The guys at Heritage Foundation did a study and found that from January 2009 until April 2010, the private sector added around 67,600 jobs each month. As soon as Obamacare was signed into law, job growth plummeted to just about 6,400 jobs a month. That’s right, less than 10% of what it was.
Correlation does not equal causation, but it does provide evidence of causation. Click to see graphic evidence in the form of a compelling chart.
The House has voted to save the traditional incandescent bulb by barring the Energy Department from implementing or enforcing lighting-efficiency standards set by 2007 legislation that otherwise will ban the sale of incandescent light bulbs, starting with 100-watt bulbs next year. I kind of doubt I will have gathered my hoard of incandescents in vain though, since the Democrats and those rent-seekers who will profit from banning the more popular inexpensive bulbs are resisting the effort.