If $900 billion in fiscal stimulus did not deliver us from high unemployment, perhaps another $450 billion will do the trick: That was the theory underlying President Obama’s speech. The same as before, but less impressive — which, come to think of it, isn’t a bad summary of this stage of his presidency.
Obama’s familiar hectoring tone, condescension, and pose of post-partisanship should not be allowed to obscure the fact that every so often he mentioned a good idea. A simultaneous reduction in corporate tax rates and corporate tax breaks was one. Extending the payroll-tax cut enacted last year was another. Enacting trade agreements would count as a third if the main obstacle to their enactment were not Obama himself and his congressional allies.
If President Obama were not so inflexibly liberal, there is much more he could have done to promote job growth. He claimed, for example, that his existing regulatory policy already balances economic goals with safety and environmental protection. On this point he was quite strident, pretending for example that Republicans had proposed to eliminate most regulations on the books. The fact is that the number of regulations, their cost, and the size of the work force at regulatory agencies have all increased substantially under this president, and that regulatory activism shows no signs of abating. A moratorium on new regulation until unemployment returns to a tolerable level would have cost the president no permanent ideological ground, but he was unwilling to propose it.
The rest of the speech was dismal. Obama wants a larger tax credit for companies that hire people who have been unemployed for six months or longer, which seems like an incentive for companies to fire some of their employees, replace them with eligibles, and pocket the credit. (It’s also an incentive for people not to take job offers if they are close to the six-month mark.) In the deficit-reduction portion of the speech, the president returned to his familiar theme that the rich need to pay their fair share. We have no objection to asking those with high incomes to give up subsidies — but where was the president’s call for changing entitlement programs to achieve that goal? Instead he seeks to raise taxes on capital income, which can hardly help the country’s long-term growth.
“This isn’t political grandstanding. . . . This is simple math,” said Obama, a few sentences after denouncing “tax loopholes for oil companies.” Actually, what simple math tells us is that these loopholes are an infinitesimal part of the deficit, and that their elimination has nothing to do with creating jobs. The attentive reader can determine what this reference was doing in the president’s speech.
Obama concluded with a college-freshman stab at political philosophy: We need to do things together that we cannot do on our own, and therefore we need big government. This discussion grew especially senseless whenever it touched on education. Assuming that government must construct and maintain schools, for example, why should it be a federal responsibility? “While they’re adding teachers in South Korea, we’re laying them off in droves.” What relevance the first datum had to the second was left unsaid. Are we to conclude that more teachers is always better? Or that unemployment among teachers — which is lower than the national average — is a particular tragedy? If so, why? Because the teachers’ unions are reliable foot soldiers of the Democratic party?
In one of the more ringing passages of the speech, Obama said, “The next election is 14 months away. And the people who sent us here — the people who hired us to work for them — they don’t have the luxury of waiting 14 months.” No, they don’t. But we suppose they are going to have to.