You see, when a liberal or progressive thinks that a person hasn't sufficiently bought into politically correct ideology (call it environmental concerns, class warfare doctrine, etc.), they say that the person needs to be "educated" (meaning brainwashed or intimidated to the point that there is no effective response to ideological talking points). It is time we start really educating Obama.
I have written several posts on what job creation requires. Almost every single policy where Obama has taken a position has been adverse to the concept of job creation. You can't cherry-pick your way to economic recovery and job growth. (Obama may preach the concept of transparency elsewhere, but hasn't a clue that convoluted, nuanced plans are the antithesis of transparency.) Obama is willing to give some small businesses tax breaks (sort of the legal person equivalent of the "spread the wealth around" concept), but jobs are generated across the economy. In many cases, small businesses work with larger companies. In many larger companies, you have a scalability which enables coverage of specialized products and services. The point is, you are most likely to enable re-employment of workers when the companies that laid them off are facing improved business prospects. Workers were laid off by businesses across the spectrum. When Obama picks winners and losers (e.g., "green jobs" and teaching jobs), he doesn't help, say, for example, an unemployed information technology project manager, with corporate or government project funding caught in a budget squeeze.
More consistent favorable policy changes, e.g., a uniform cut in payroll taxes, accelerated depreciation schedules, lowering of uncompetitive global business tax rates, etc., leverage the desired policy effect scalably across the economy; you need to avoid adverse changes in tax or business cost policy (e.g., possible tax surcharges or funded obligations over a health care insurance mandate, take-backs in promised retiree drug benefits, and energy tax increases). You also need to stabilize or lower indirect government costs, including regulations and reporting requirements (e.g., streamline reporting points of contact, exempt smaller businesses from SOX reporting, etc.)
What we see, as we approach the start of 2011, are sharp increases in upper personal income tax brackets, not to mention increases in investment taxes: these policy changes will soften investment, which directly relates to expansion and job growth. In addition, massive unsustainable federal deficits require heavy federal borrowing at the expense of private sector credit.
What the Obama Administration has continually tried to do is try to maximize revenue from a small group of higher-income people. This is extremely counter-productive: penny-wise, pound-foolish; among other things, the compounded effect of investment will result in greater federal revenues in the long run.
Obama would be better served by looking at what factors contribute to capital in-flows and the reasons for China's structural trade surplus with the US. Labor costs certainly are part of the story, but recall that China also has some structural disadvantages, including transportation or logistics costs. To some extent, manufacturing based on labor economy of scale is not a viable competitive strategy. We will need more modern flexible manufacturing technologies along with a more technically sophisticated, adaptable work force. We need a more modern immigration system, not based on the chained immigration of unskilled workers, but one which, for instance, guarantees legal residency for locally-conferred scientific, engineering, and medical doctorates and not only sharply increases immigration counts but reassigns quotas in a more proportionate fashion and places more emphasis on merit-based factors, including higher education, business or professional experience, and knowledge of English.
The problem is that Obama's politics are largely predictable based on a few basic concepts: Keynesian economics (i.e., government can spend itself into prosperity), class warfare, identity politics, labor lobby preferences, and environmental lobby preferences. There is a fundamental conviction that government efficacy goes beyond a few core public interest competencies, and government policies are competently formulated and executed, are not motivated by self-preservation and do not induce moral hazard or result in unintended consequences.
Conservatives are naturally very wary about the effects of government expansion and intrusion into the private sector. Changes in the operating environment obfuscate the business environment, almost like a cloudburst or blizzard affecting your vision directly ahead while driving will slow you down until you know you can safely proceed under the conditions: are my increased tax liabilities going to affect capital spending? Obama frequently thunders, "Inaction is not an option!" Apparently Obama does not appreciate that patience is a virtue, that the wrong type of action might do little more than defer the inevitable. Case in point: Does anyone else remember that Obama wanted to loan GM and Chrysler more money and despite that, GM and Chrysler went through bankruptcy anyway, just frittering away US taxpayer money? Does anyone really doubt that by almost any standard last year's $800B stimulus package has NOT been a success? But you hear unapologetic statists arguing that unemployment would be far higher without TARP and the magic of Bernanke, Paulson and others. Self-serving "Chicken Little" rubbish! We have a $14.6T economy; TARP spending amounted to less than $1T and today is dominated by huge loans to a regulated company AIG and two GSE's (Fannie Mae and Freddie Mac). I have no doubt whatsoever that, left to its own devices, the private sector would have found a way to deal with the economic tsunami without the intervention of those genius "saviors" whom were responsible for easy money and federal super-spending.
Obama Calling GOP Bluff On the Deficit
This is rich; Obama basically dismisses GOP rhetoric on the deficit as hypocritical and is willing to call their bluff, wondering how the GOP will react when it comes time to act early next year. Let's make it very clear, Mr. President: we conservatives are begging you to propose your deficit cutting strategy NOW, before the election--that way both you and the GOP are on the record, and the voters can decide who they believe.
The fact of the matter is that there is no way in the world the GOP would have passed a $787B stimulus package last spring or passed a budget, covering a $1.42T deficit. There is no way that the GOP would have proposed a $1T-plus health care plan.
Now what do you THINK Obama means when he suggests that he is going to call the GOP's bluff when it comes to cutting the deficit? Let me think: There are 2 ways to close a deficit: you cut spending or you raise taxes. What does the record say so far? In the face of $1.4T or above deficits--over 3 times the size of the largest GOP deficit ever, when a GOP Congress is the only Congress in over 40 years to run a budget surplus--Obama has had two cost-cutting initiatives: $17B and $100M. In an environment where state and local governments have been shedding jobs and cutting budgets to make balanced budget requirements, Obama has been escalating federal hiring. Many of the constraints on budgeting discussed to date refer to cuts in BUDGET INCREASES, not year-over-year budget cuts. When Obama announced some pay freezes, it wasn't across the board but on a small percentage of positions overall.
Obama would already be doing spending cuts if he wanted to do that, but it would be difficult to fathom him doing that when Speaker Pelosi speaks of yet ANOTHER extension of unemployment benefits as a "stimulus". [In fact, what we are seeing is a hoarding of savings, both by business and by savings, in part due to economic uncertainty and over tax-related concerns.] Moreover, he's compelled to defend his stimulus bill, much of it spent on long-standing Democratic spending priorities--so I don't see him taking back his Keynesian economic philosophy and the importance of spending under the economic circumstances.
Why would he be waiting until after the elections? TAX INCREASES. If he was to admit to raising taxes--anything remotely touching the 95% he promised would find their taxes cut--it would have an explosive effect on voters and almost certainly lead to a GOP sweep this fall. (I think no matter what, even if Obama waits until next spring to announce something like a VAT, you can almost guarantee an updated rerun of the 1992 "Read My Lips: No New Taxes" election with Romney or whoever wins the nomination rerunning every spot where Obama mentioned not a penny more in taxes.) No doubt Obama will prescribe a "fix" for social security that lifts the ceiling on payroll tax limits and mean-tests distributions. Make no mistake--this conceptualization really transforms a defined contribution system (which is already progressive in terms of net payment disbursements) to a dedicated senior citizen welfare program. And the net effect on current workers is to essentially raise high income tax brackets beyond the Clinton rates.
As for me, I'm willing to consider some broad-based consumption tax but only if Obama agrees to a moratorium on new federal spending, across-the-board pay/benefit and pension freezes above the national median household income, payroll cuts, hiring freezes, federal facility consolidations, and across-the-board spending cuts, including military and entitlement spending.
Political Cartoon
Lisa Benson looks at the line that AG Eric Holder and ICE are determined to make a stand--no, not the southern US border but over Arizona law enforcement encroachment on federal bureaucratic fiefdoms. The Feds insist it's their prerogative to release any illegal aliens turned over if they mistrust the circumstances of the arrest, regardless of whether the detainee is, in fact, an authorized visitor. Do we need to remind the AG and ICE that it's their responsibility is to ENFORCE IMMIGRATION LAWS, not to create federal policy or to smear the reputation of Arizona law enforcement personnel? After Katrina and the BP oil spill, isn't it time we stop finger-pointing between state and federal responsibilities? Here's a radical idea, Obama: if you adopt a proactive, preventive border security policy, the state of Arizona won't have to subsidize law enforcement of unauthorized visitors like they have had to do, before enactment of the current Arizona Immigration Law...
Quote of the Day
Love looks through a telescope; envy, through a microscope.
Josh Billings
Musical Interlude: Chart Hits of 1983
Michael Jackson, "Billie Jean"
Air Supply, "Making Love Out Of Nothing At All"
Laura Branigan, "Solitaire"
Hall & Oates, "Maneater"
Toto, "I Won't Hold You Back"
