Last night I appeared on the radio program of Tom Bevan, co-founder of RealClearPolitics, with Jonathan Alter — formerly of Newsweek, now with Bloomberg News — who has challenged readers to prove to him that Barack Obama has been a bad president.
Alter said he has received more than 1,000 responses, ranging from thoughtful to, er, probably what you would expect from a question that suggests that disappointment or disapproval of the president is a national egregious misjudgment. Before you berate him, at least credit Alter for concluding that Paul Krugman’s political advice to the president is cuckoo for Cocoa Puffs. (My words, not his.)
Tom’s radio program doesn’t run long enough to lay out every Obama policy mistake from a conservative perspective. And none of that is likely to be persuasive to a liberal who looks at the conservative worldview and concludes, “Well, that’s just wrong.”
So instead, let’s look at Obama’s presidency through the lens of an apolitical independent who doesn’t think much about policy details. To this hypothetical voter, the single biggest problem has Obama’s failure to deliver — they’ve heard the president’s near-perpetual pledges that prosperity is just around the corner, followed by consistent disappointment.
Any president can botch a policy, but Obama compounded his mistake by constantly believing that the stimulus was working when the data throughout 2009 and 2010 indicated anemic economic growth and a jobs market that was stagnant at best. Obama, Biden, and the rest of the economic team behaved and spoke as if a real recovery was just around the corner, even running around with the slogan “Recovery Summer,” but the signs of stagnation have been consistent over the past three years.
So why has recovery from this economic recession/depression been different from most others?
Right now, non-banking companies are sitting on piles of cash — Moody’s puts it at one and a quarter TRillion, with a T-R. These cash reserves have increased one-half trillion since 2008. Why are they not using that cash to hire people? Different companies will give you different answers, but they have deep anxieties and uncertainty about what’s coming next out of Washington. The National Federation of Independent Business finds small-business owners’ optimism plummeting again, with regulation and taxes ranking number two and three in these businesses’ lists of biggest problems (number one was low sales). (Collectively, taxes and regulation are listed as the top problem of 36 percent of small businesses, compared to 23 percent saying ‘low sales.’)
If you want businesses to start hiring at a faster pace, Washington needs to say to employers A) we will not raise your taxes, B) we will not make you pay a ton more for your employees’ health insurance, and C) we will not make you pay a ton more for energy costs through either cap-and-trade or new EPA regulations on energy production.
Alter asks, “Does any president who presides over 9 percent unemployment deserve to lose?” Well, yeah, particularly if that 9 percent unemployment persists for four years or so.
For the entirety of the Bush years, despite hearing from our friends on the Left about how bad things were, unemployment was between 4 percent and 6 percent. Let’s face it, if unemployment were 5 percent, Obama would be near-certain for reelection.
Alter mentioned the now-tired point about the fact that the economy is at least now adding jobs. But as I said last night, we’re not adding jobs at the rate need to keep pace with normal workforce growth — usually 100,000 to 200,000 jobs per month. Second, millions of Americans have left the workforce during Obama’s term. If you throw them into the total, the unemployment rate is closer to 11 percent and this economy looks even crappier.
Alter writes:
When Obama took office, the economy was losing about 750,000 jobs a month and heading for another Great Depression. The recession ended (at least for a while) and we now are adding several thousand jobs a month — anemic growth, but an awful lot better than the alternative. How did that happen? Luck?
Notice the extraordinarily low bar for a not-bad president: merely ceasing to lose 700,000 jobs per month. Why are we not losing 700,000 jobs per month? Because we hit bottom, and we are now “bouncing along the bottom,” a phrase recently used to describe the housing markets. From Alter’s perspective, this current stagnation is the best anyone could possibly hope to “enjoy.” He’s Jack Nicholson arguing that this is as good as it gets.
The stimulus was not sufficiently stimulative. Infrastructure spending can be useful — imagine widening the roads in the most heavily trafficked areas, reducing commuting time for millions of Americans and shortening shipping time for billions in goods — but it’s not particularly fast-moving and it’s not, as the president later admitted that he learned, “shovel-ready.” If I had a magic wand, I would have eliminated the entire payroll tax for the entirety of 2009, effectively giving every American a 7 percent raise and making every employee 7 percent less costly to every employer; the self-employed would have received the equivalent of a 14 percent raise. (I realize a bunch of other smart conservatives disagree on this, but I would hope everybody could agree it beats replacing five-year-old sidewalks in Boynton, Oklahoma.)
There’s plenty more, of course. Obama pledging to put away childish things in his inaugural address and then cutting off debate with Republican lawmakers by declaring, “I won”; Obama the senator who said that voting to raise the debt limit was a sign of failure; Obama the senator declaring that increasing the deficit by $4 trillion is “unpatriotic,” when Obama the president has now raised it by $4.02 trillion in a much shorter period of time . . .
--"How did that happen?"--
It's called the 'natural business cycle.' Recall the famous Roemer 8% unemployment graph and that if we did nothing, the job losses would eventually have petered out right about when they did.
Sorry Mr. Alter, but Obama does not get credit that.
Reply to this commentLinkReport AbuseMore importantly than employment and unemployment stats are small business failures due to regulation, no loans for expansion or staying viable and number of new businesses created to cover those that failed. After all, it is small business that creates the majority of jobs. Forget job creation by Federal fiat - it all begins with Federal laizze-frere.
Reply to this commentLinkReport Abuse"When Obama took office, the economy was losing about 750,000 jobs a month and heading for another Great Depression. The recession ended (at least for a while) and we now are adding several thousand jobs a month — anemic growth, but an awful lot better than the alternative. How did that happen? Luck?"
I am so past fed up with this one. No, Mr. Atler, not "luck," but the mere fact that recessions hit, and after the contraction has run its course, they END. There's nothing remarkable, unprecedented, or "lucky" about it. At least 2 chief economists from big name Wall Street firms had predicted the trough would be achieved right around mid 2009, WITH OR WIHOUT "stimulus." An analysis conducted by Fidelity about a month after passage was summed up at a conference I attended. Their chief strategist said roughly half the package was "garbage," ideological pork not expected to have a stimulative effect whatsoever. This year on a conference call, JP Morgan's economist conceded, after my asking him for a counterfactual and a little diplomatic hedging, that absent stimulus the economy may have contracted slightly more, and hence GDP growth might have been lower in 2009-10 because "government purchases" are a part of the formula that calculates GDP.
But beyond that, nothing would be different, and we would have not incurred $1 trillion more in debt, less uncertainty, and would probably be further on the mend by this point. Free markets have recessions, they bottom and they recover. Every time.
This narrative that the economy was in some sort of unarrestable free-fall and that ONLY Obama and his magic pixie dust called "stiumuls" saved us from oblivion is easily the most narcissistic of his claims.
Reply to this commentLinkReport AbuseShawn
I don't know how you can possibly think that the magic of stimulus is "easily the most narcissistic" belief of the "One". The range of possibilities is simply too vast. Never to be far from top consideration is the massive hubris in stating that merely securing the Democratic nomination was a time when "the seas would stop their rise, and the planet would begin to heal itself." Hello? Are we still "the ones we have been waiting for?"
Unfortunately, the man, for all his unbelievable vanity, is at least not too stupid to neglect his pollsters, spinmasters and ward healers, each of whom knows that the have-not base has very limited cognitive capacity. The sappy slogans are for the idealistic youngsters and die-hard liberals of the dream world, but the non-logic of "I did x (stimulus, auto bailout, whatever), y is the case today (recession bottoms out, GM still in biz), and therefore y was caused by x! is for the easily fooled that are the specialty of the campaign strategists. Besides, they really have no choice. What do Axie and Plouffie have to go with except "it would have been worse", and, of course, it would have been awesome except I was stymied by those awful non-Krugman, non-Keynesian troglodytes in the Senate?
Reply to this commentLinkReport AbuseHey, the seas have stopped rising, so there's that...
Reply to this commentLinkReport Abuse"If I had a magic wand, I would have eliminated the entire payroll tax for the entirety of 2009, effectively giving every American a 7 percent raise and making every employee 7 percent less costly to every employer; the self-employed would have received the equivalent of a 14 percent raise."
i thought the payroll tax cut didnt apply to the employer contribution, just the employee's
Reply to this commentLinkReport AbuseA question for Mr. Alter: Geroge Bush dealt with the bursting of the dotcom bubble, inherited the mild recession from Bill Clinton, dealt with the fallout from 9-11 (which could have been an economic disaster as well as a national security disaster) and kept the economy growing and jobs being created - until the housing bubble burst - something he had warned about with Fannie Mae and Freddie Mac at least as early as 2003. So is anybody who maintains unemployment at 5%, overcoming several disasters while doing it, automatically a BAD president in your eyes? Or does performance matter at all? Is the deal that if a guy is a leftist ideologue, he is good no matter how bad everything tanks in his wake and if a guy is a traditionalist conservative he is bad no matter how well he handles things? Do you have an entirely different definition of good and bad than normal human beings who use evidence, reason and performance as benchmarks? And if so, how in heavens name do you keep a straight face while telling us rubes how smart you are?
Reply to this commentLinkReport AbuseHa! That, sir, is priceless. Well played.
Reply to this commentLinkReport Abusegood points...did liberals give GWB any credit for any single thing? No, the just bashed everything (e.g., Katrina, where he begged people to get out and pre-positioned people for after the storm).
Easy to catcall from the cheap seats...harder to stand up to 100 mhp pitches at the plate.
Reply to this commentLinkReport Abusespot on!
Reply to this commentLinkReport AbuseExcellent post. When this is pointed out to the Prez Zero deadheads, the change the subject. Its a constant excuse machine
Reply to this commentLinkReport AbuseBest post on the entire Adler column - irrespective of who carried it or who responded to it. You should be a columnist.
Reply to this commentLinkReport AbuseI understand the rationale behind eliminating the Social Security tax, but that just hastens the day of reckoning. If Social Security were any other retirement program, it would have been declared insolvent many years ago.
Reply to this commentLinkReport AbuseInsolvent? It has run surpluses since inception and is supposed to be pay-go! We should all be so insolvent.
Reply to this commentLinkReport AbusePonzi Schemes are ALWAYS solvent until they collapse.
Just the facts, ma'am.
Reply to this commentLinkReport AbuseAs a business owner for 25 years, I cringe when I hear the canard that there's no hiring because of uncertainty. The is ALWAYS uncertainty for every business owner. New Presidents, new Congress, repealed taxes, increased taxes.
Can you please explain to me what business, upon receiving a big new order that would require them to hire people to fill it would say "no thanks, take your business to my competitors, I'm just too uncertain"
This is all just BS. Uncertainty is always a factor, good times or bad. The difference this time is that there is no business. When the housing bubble burst, everyone's money disappeared.
Reply to this commentLinkReport AbuseSorry, Jim in Panama, I've well familiar with this "there's ALAYS uncertainty" line plenty of times from Obama apologists. There are degrees of magnitude with uncertainty, sir. What to Jim Geraghty's point that the biz owners themselves in NFIB's poll place tax and regulatory uncertainty ahead of sales? You simply cannot have the tax code be a giant question mark for the next 2 years, as is the case with last year's compromise, have new issues come to light with Obamacare about every other week, Dodd-Frank, and all these other multi-thousand page messes generated the first 2 years, AND fear of unchartered territory on the U.S. credit rating and debt to boot, and say this is just run-of-the-mill uncertainty. It most certainly is not.
As to your point about no customers, sure that's an element. Again, the biz owners themselves say so. But if this theory of sales aren't happening because unemployment is high and no one is spending played out the way you suggest, then all recessions would be self-perpetuating. UE is high, people don't spend, businesses cut back and fire, sales drop more, the vicious cycle repeats and feeds on itself. Of course, that's not how things work in the real world.
Instead what's happening is the unprecedented cash hoarding and businesses making their workforces as lean and efficient as humanly possible, so they CAN process your hypothetical order. But that doens't mean they're going to risk investing in new employees, along with the unknown health care costs and the tax brackets they can't factor in to determine whether its worthwhile to do so.
Reply to this commentLinkReport AbuseIt's a wonderful feeling to be validated by the great Thomas Sowell. You'll just have to trust me when I say I didn't read this before my reply above.
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Reply to this commentLinkReport AbuseIt's great your sharing your opinion Shawn, but I'm gonna go with the person who's actually running a business. Personally, I'm in the business of analyzing companies and literally look at thousands of the largest public companies in the country (including speaking with ceo's and cfo's regularly). No one is worried about the tax code - sure everyone would like lower taxes but what is the alternative? Don't invest and get 0% return on your money? Really, does that make sense to you? And please, let's drop this canard of investing "overseas". Companies are going to invest overseas regardless of tax - the billions of people with first time purchasing power has something to do with that. Business investments (in all assets) have come down commensurate wtih demand. When demand picks up, investing will follow. Now if you want to critique Obama about demand creation, go at it, but let's drop this issue about taxes...please.
Reply to this commentLinkReport AbuseWhat kind of companies are you looking at? If my cost of doing business here in the US (taxes, cost of employees and their benefits (like health care), leases, etc.) is much higher than it is overseas, I would be foolish not to look at investing overseas. Likewise, lower taxes mean higher profit margins. So if I am choosing investment opportunities, I'm going to choose the ones that have better margins. Of course taxes have an impact on the cost of business (so does Obamacare). So no one is going to drop an important issue (taxes) just because you are an Obama apologist. But good try anyway.
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