Tag Archives: Maynard Keynes

SYNDICATED COLUMN: What’s the Matter with Obama?

It’s the Not Caring About the Economy, Stupid

As a pundit it’s my job to explain why politicians do the things they do. Every now and then, however, a pol behaves so irrationally that I have to throw up my arms and ask:

What the hell is this guy thinking?

That’s what Obama has me doing. For over two years. Why isn’t he worried about unemployment?

Thomas Frank wondered in “What’s the Matter with Kansas?” why Americans don’t vote their (liberal) self-interest. What I can’t figure out is why President Obama isn’t following his self-interest.

Obama says he wants a second term. I believe him. Every president wants one.

Americans vote their pocketbooks. Not exclusively—they care about a candidate’s values—but no president has ever been reelected with an unemployment rate over 7.2 percent. Right now it’s 9.1 percent. Unless there’s an unexpected reversal, it will still be way high by Election Day 2012.

Economists surveyed by USA Today predict that the jobless rate will be pretty much the same, 8.8 percent, at this time next year. Goldman Sachs is even more pessimistic. They think it will be 9.25 percent by the end of 2012—with a “meaningful downside risk” that it will be even worse.

Polls indicate that economic insecurity, specifically high unemployment, has been the biggest issue on voters’ minds since Obama took over in 2009.

77 percent of Americans tell Gallup the economy is getting worse. That’s up from 62 percent a month ago.

If Obama wants to get reelected he has to do something about jobs. Something BIG. Failing that—and that’s an epic fail—he has to at least be perceived as trying to do something about jobs. But he hasn’t done squat so far. And his job approval rating, now at an all-time low of 39 percent, reflects that.

I don’t like admitting this, but I’m mystified. Why isn’t Obama even trying to look like he cares about the one issue that could make or break his reelection chances?

What’s up? Are he and his advisors morons, or just out of touch? Do they have some secret jobs-related October Surprise that will magically reemploy the 22 percent of Americans who are out of work during the last few weeks of the election? Are they the Chicago Black Sox of politics, determined to throw the race to the Republicans? Psychologist Drew Westen can’t figure it out either, wondering aloud if Obama is sick in the head.

Some ask: Is Obama a Republican?

“Government doesn’t create jobs,” tweeted GOP candidate Herman Cain recently. “Businesses create jobs. Government needs to get out of the way.” Obama and his fellow fake Democrats never challenge this right-wing framing.

Maybe they believe it. “The White House doesn’t create jobs,” Obama press secretary Jay Carney said August 5th.

But the meme is wrong. In the real world where flesh-and-blood American workers have been living since 2000, businesses haven’t created any jobs. Instead, they’ve eliminated millions of them. And shipped millions more overseas.

Those job-killing trends—eliminating workers, increased automation and globalization—won’t change soon. “Workers are getting more expensive while equipment is getting cheaper, and the combination is encouraging companies to spend on machines rather than people,” Catherine Rampell recently reported for The New York Times.

There’s also a death-spiral effect. Elena Semuels of The Los Angeles Times sums it up: “Economists say the nation is stuck in a Catch-22 scenario: The economy won’t improve until businesses hire, but many won’t hire without consumer demand, which is weak because of the current state of the job market and concerns about the future.”

“Everyone says, ‘How can we have a recovery without jobs?’ [But] until I start seeing my competitors add jobs, I’m not going to do it,” Loren Carlson of the CEO Roundtable tells MSNBC.

Recovery won’t come from business. The scope of the post-2008 meltdown is too vast.

On the other hand, government can and does create jobs. Indirectly, it creates the veneer of law and order that permits commerce. Government can also employ people directly.

FDR orchestrated the direct hiring of 9 million Americans as government employees for the WPA and other programs. The federal government even hired writers and artists. Adjusted for population growth, that’s the same as 22 million people today. Obama could have done something like that in early 2009.

Too late now, of course. Obama’s inaction on the economy prompted a Republican sweep in the 2010 midterms. They won’t go along.

Keynes 101: the time for austerity is during a boom, when you can afford to save up for a rainy day. Governments are supposed to spend their way out of a recession or depression. The GOP-conceived debt ceiling deal is 200-proof insanity.

“An anti-Keynesian, budget-balancing immediacy imparts a constrictive noose around whatever demand remains alive and kicking,” wrote Bill Gross of the bond-trading firm Pimco in The Washington Post. “Washington hassles over debt ceilings instead of job creation in the mistaken belief that a balanced budget will produce a balanced economy. It will not.”

Rather than criticize this austerity lunacy, Obama is still going along. “Mr. Obama’s senior adviser, David Plouffe, and his chief of staff, William M. Daley, want him to maintain a pragmatic strategy of appealing to independent voters by advocating ideas that can pass Congress, even if they may not have much economic impact,” reports the New York Times.

“We’re at a loss to figure out a way to articulate the argument in a way that doesn’t get us pegged as tax-and-spenders,” admits a Democratic Congressional advisor. For God’s sake, grow a pair! Make your case to the public.

Anything that doesn’t have “much economic impact” isn’t going to have much electoral impact either. And neither are token gestures like a three-day bus tour, revamping the patent process, or another overhyped speech. (Scheduled for September. Because, why rush?)

As you read this Obama is off to Martha’s Vineyard, hanging out with millionaires.

Really—what’s going on? Can Obama really be that stupid? Can anyone?

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

COPYRIGHT 2011 TED RALL

SYNDICATED COLUMN: The GOP Bets on Bad Judgement

Voters Focus on Spending at Just the Wrong Time

Ross Douthat, the conservative columnist who elevates bland to middle-brow art for The New York Times, thinks Republicans have overreached in their showdown with Obama over the debt ceiling. “[The Republicans’] inability to make even symbolic concessions has turned a winning hand into losing one,” he says.

Advantage, according to Douthat, representing the mainstream media: Obama.

Of course, Obama had already agreed to begin dismantling Social Security and Medicare, surrenders Republicans have craved for decades. If he pulls off this “victory” Obama will have done more damage to the Democratic Party and its core values than any president in our lifetimes. How will he promote what Douthat fears will be a “victory”? I wonder.

Or, to lift a line from “Double Indemnity”: I wonder if I wonder.

Back a few pages, Times reporter Jesse MacKinley finds himself in the curious position of writing that no one really cares about a story that has dominated the headlines for weeks.

“Indeed, the drama of whether the government will raise the debt ceiling (to the chagrin of some conservatives demanding tighter financial belts) or allow it to remain as is (to the horror of the administration and economists who predict financial ruin) seemed largely lost on a populace involved in more pressing—and more pleasant—summer distractions,” asserts MacKinley.

To summarize:

No one cares about the debt ceiling.

And:

Among the few political geeks who understand what’s going on, much less have an opinion, the tide is allegedly turning in favor of Obama because he’s willing to compromise and the Tea Party-led GOP isn’t.

Conventional wisdom floggers like Douthat say that if Congress can’t strike a deal and economic consequences follow—a reduction in the ratings of U.S. government-issued securities and a panic in the securities market—voters will hold Republicans accountable in 2012. Even if things don’t turn that far south, the GOP will pay for their intransigence. Obama wins in a cakewalk.

I’m not so sure.

In the same way that generals usually refight the last war, mainstream political pundits often apply old scenarios to new situations. This is not 1995, when then-House Speaker Newt Gingrich orchestrated a shutdown of the federal government that set the stage for Bill Clinton’s reelection the following year.

Without a doubt, the Republicans’ willingness to imperil the pure platinum credit of Treasury notes and bonds is reckless and irresponsible. There is also no denying their naked hypocrisy and intellectual dishonesty. These so-called “deficit hawks” voted 19 times to raise the debt ceiling by $4 trillion.

If Republicans were serious about balancing the federal budget they’d start by slashing the military, which accounts for 54 percent of discretionary spending—and which hasn’t done anything to defend the U.S. from a real enemy since 1945. The Department of Homeland Security, a vast new bureaucracy created by Bush after 9/11 in order to make us take off our shoes, should be eliminated.

Moreover, the middle of the biggest economic meltdown since the industrial revolution is no time to be cutting debt. Read your Keynes: governments are supposed to spend their way out of downturns, and pay down debt during upswings.

Republicans, it seems, are trying to finish off an economy that is already gravely wounded.

Politically, however, I think they’re onto something. Year after year of warnings about the expanding national debt—remember Ross Perot’s charts?—the American people are finally, genuinely alarmed about the pace and scale of government spending. The current national debt of $14 trillion isn’t the magic number that flips some sort of switch in the public.

It’s simply that, at certain times, public opinion on an issue that has been around for years, divisive and apparently intractable, suddenly coalesces into widespread consensus. Climate change. Gay marriage. The war in Afghanistan, which was so popular in 2008 that Obama won by promising to expand it, but is now seen as stale and unwinnable.

Win or lose on the debt ceiling showdown, GOP strategists are betting than voters will reward them for taking an uncompromising stand on spending against a president who has increased the national debt faster than any of his predecessors. It’s not 100 percent—but I’d say it’s a pretty safe bet.

This is the worst possible time for the American people to start worrying about out-of-control federal spending. But it’s good for the GOP.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

COPYRIGHT 2011 TED RALL