BLOGS FROM US^®

(Article first published as Obamanomics: Simply Insanity or Crazy Craftiness, Too? on Blogcritics.) On February 12, 2008, in a campaign speech delivered to a packed, thunderously approving crowd, then candidate Barack Obama provided a glimpse of Obamanomics. As in his later encounter with Joe The Plumber, the first term Illinois Senator preached government control of wealth. The specific example he used on both occasions was wealth redistribution. But, that is merely one type of wealth control. There are others and Obama has also pursued them in his first term. They’ve all failed or we wouldn’t be surveying their smoldering wreckage from our perch on the brink of a double dip recession.

And yet Obamanomics hasn’t changed one whit. No lessons learned, not even a slight course correction. It’s still all about government control of wealth through taxing and spending, regulating, granting unfair advantage to handpicked businesses and industries, etc. Take Obama’s jobs proposal, or Stimulus 2.0, unveiled in his September 7 speech. The payroll tax cut is merely an extension of the current one-year reduction. It won’t improve hiring because it’s not a cause of unemployment. But, it is convenient diversionary dressing around a window the White House can’t break through.

And then there’s infrastructure spending, redux. In 2008 and 2009, Obama preached the importance of shovel ready jobs so much he practically turned it into a religion. But in a September 2010 interview, published the following month, Obama admitted those jobs don’t exist in the public sector. One short year later, he’s pushing them again.

The tax increases in the President’s just announced debt reduction plan are nothing new, either. He’s pressed the issue of increasing taxes on the rich since his first term candidacy days. But, at this juncture, even Democrats are having a difficult time supporting them. The reason is obvious. The economy cannot be fixed by taking money out of it. Increasing taxes on those who invest their incomes in growing businesses is much more than merely foolish.

Obama’s persistence in the face of these failures is very like Einstein’s definition of insanity. That is, doing the same thing over and over again, expecting a different result. It doesn’t happen in physics and it won’t happen in economics, either. But, is Obamanomics just insanity or is it also the slick strategy of a President desperate to win re-election?  The facts are stacking up in favor of the latter.

From the moment of his first presidential campaign appearance, Obama has clung to the politics of blame like an addiction. Now, in these beginning days of his re-election bid, with his poll numbers tanking faster than the Titanic, he desperately needs a distraction to hype. Anything that will get the electorate more upset with Republicans than with his mishandling of the economy. So, he offers proposals that couldn’t get through Congress with a battering ram in order to contrive blame scenarios.

His jobs plan is a typical example. Before its delivery, he set the stage by characterizing it as ‘bipartisan’, which, of course, is wrong since it takes two parties to create bipartisanship. No matter, in his Saturday address to the nation, Obama stated his intention to extort GOP support for his new Stimulus proposal. His grand scheme is to blame House Republicans for continuing high unemployment if they oppose it. What he’s not saying is that, if Republicans do support his plan, he will include them in a circle of ‘bipartisan’ blame when it fails. Using blame like a flamethrower is what got Obama elected and blame is what he believes will get him re-elected. Meanwhile, we’re getting much too cozy with double dip.

In another favorite blame pitch, Obama pits the “rich” against the “little guy” over the amounts of money they earn and taxes they pay. But, concocting divisions and wielding them like weapons to get re-elected merely underscores his unsuitability for the office he holds. He ignores the fact that the rich pay most of the federal income tax while about fifty percent of wage earners pay zero dollars.

Obama also fails to mention that many in his crosshairs are small business owners who employ the majority of the American workforce. Taking more money out of their pockets leaves them with less to invest, which means businesses stagnate and the unemployment rate remains high. It also depresses tax revenue.

But, it works for Obamanomics, which holds that government, not the private sector, is the engine of economic growth. As if on cue, the Solyndra loan scandal, presently engulfing the White House like a Gulf oil fire, belies that argument. Taxpayers, courtesy of the Obama Administration, guaranteed $535 million in venture capital loans to the handpicked company. One thousand new jobs were supposed to be created in return.

Fourteen months later, the company folded, laying off eleven hundred workers and leaving taxpayers holding an expensive bag. At a cost of over $535,000 per job, the loan guarantee is being criticized as “crony capitalism”. One of the Solyndra investors is a high-profile Obama campaign contributor. Regardless, the whole debacle highlights the inability of a government bureaucracy to drive an economy anywhere but off a cliff.

In an unusual public chastisement, former Clinton strategist, James Carville, scolded Obama last week for not firing his staff and completely changing his direction. Press Secretary Jay Carney responded that the American people know Obama is doing all he can to grow the economy and create jobs. At last, we all agree on something. We know Obama’s doing all he can. And it’s not working.

In that February 2008 speech, candidate Obama promised to remake this country, block by block, precinct by precinct, county by county and state by state. If you’ve had enough of that, get your shovels ready. You’ve got a job to do come November 2012.

See you in the mirror.

(First published as Why Obama’s Jobs Speech Will Be a Nonstarter on Blogcritics.) President Obama will give yet another major speech this Thursday night. He’ll speak in broad platitudes and intone about the seriousness of our predicament. He will emphasize the necessity of working together. He will, of course, offer way too little in the way of specifics, but whatever it is will have a huge price tag. And his speech will come a cropper, die aborning, stumble out of the gate, take a dirt nap. Pick your metaphor. The speech will go the way of all of his other featured addresses, which is to say, precisely nowhere. Why? As Elizabeth Barrett Browning once wrote, “let me count the ways” or at least the three main ones.

First, Obama talks too much. He’s a man of big words and small deeds, long on rhetoric and short on results. In fact, his Administration has produced no sustained economic growth in its existence. We’ve heard the reasons for this failure repeatedly and the only thing that changes is the length of the list. It grows. And grows. Bush, the evils inherent in the American financial industry, the Tea Party, the Republican House majority, the Tea Party, the tsunami in Japan. But, when the smoke is blown away, what remains is what Obama has actually done. And it is a pitifully small pile of inconsequential, albeit costly, programs.

Lest we forget, the Republican congressional majority has existed for only the last 8 months or twenty-five percent of Obama’s time in office. For the first 24 months, he had his way with Congress, to the point of losing control of the House in the 2010 elections. What were the President’s economic accomplishments during that two-year period? Absolutely nothing that had a sustainable impact. Much of what he did had no impact at all.

The futility of the Administration’s efforts to jump start the economy is not limited to embarrassing hype programs like Cash for Clunkers. A much more telling example is Obama’s efforts to resurrect the housing market, the other elephant in the room that he mostly ignores. There was HAMP, 2MP, HAFA, PRA, HAUP and several others. Despite those efforts, and the billon$ they cost, the housing market is now in a double dip recession. You could argue successfully that it never arose from the first one. But, economists agree that, if it did, it fell into the second one last May. So much for the power of acronyms over actions.

Second, with his majority in the House a thing of the past, Obama must compromise to move the country forward. But, he either misunderstands compromise or simply can’t bring himself to engage in it. That’s really a coin toss. Compromise is not in his nature. For example, he is advertising his Thursday night speech, with its first word yet to be heard, as “bipartisan”. This billing could simply be political, as in everything the President says is bipartisan and therefore anyone who disagrees with him is necessarily partisan.

Or, as likely, Obama believes that if he moves away from any part of his original agenda, he is being bipartisan. But, this belief, of course, ignores the meaning of the word. Bipartisan means of, relating to or involving representatives of two different parties. Unless you suffer from a mental disorder like schizophrenia, you can’t be bipartisan all by yourself. The President needs to come to grips with this fact and stop listening to the little voices both in his head and in his Administration. He actually has to involve Republicans in defining solutions. Simply making unilateral pronouncements and daring his opponents not to accept them isn’t bipartisanship. But, it is a strategy for failure.

Third, making a significant, and sustainable, reduction in the unemployment rate is beyond Obama’s capabilities and those of his hand-picked advisors. This reason is the crux of the problem with all of his speechifying. He’s not very good at politics, but he’s even worse at problem solving. To gain acceptance of his ideas, he prays on people’s fears, distorts opposing viewpoints and protects sacred cows beyond our ability to support them. None of this will fix our unemployment quandary.

Joblessness cannot be dealt with in the vast vacuum of political posturing. The unemployment rate will come down when the economy recovers and not before, at least not in a lasting way. Getting the economy on track means taking strong actions. We are way past short-term fixes for political advantage. We need: (a) tax reform including, among other things, incentives to business, (b) repeal of much of the costly, burdensome business regulations put in place since 2009, and (c) a serious commitment to deficit reduction, which requires effective entitlement reform. These actions create the stable environment that businesses need in order to recover and begin hiring in earnest again.

The good news for Obama is that if he can get those things done, he can also get re-elected. But, as long as his speeches are major and his actions minor, he doesn’t stand a chance. And that’s good news for everyone else.

See you on the left-side.