Listening to a speech billed as revelatory of Obama’s economic proposals, I was hard-pressed to identify any new direction in White House economic policy.
Before a cherry-picked audience of Cleveland-area Democrats, Obama tried to fire up his political base in advance of the November elections. His remarks were enthusiastically received by those in attendance, but my own take on Obama’s address was that it was the very epitome of political double-speak.
This is, by no means, an exhaustive list of all the double-speak featured in Obama’s speech, so feel free to add to the list in the comments section:
- He decried inheriting a deficit of a trillion plus from the previous administration. Then he portrayed his actions of the following year, also incurring a deficit of a trillion plus, as a rescue from a national financial meltdown and as an investment in the future, particularly an investment in education.
- He called for tax breaks for small businesses. Most small businesses are not corporations. A large number of small businesses are owned by private individuals, and such businesses report their profits or losses on the business owner’s personal income taxes. Taxes on annual incomes over $250,000 are set to increase dramatically as temporary tax cuts expire, thus increasing the tax burdens for a significant number of small businesses.
- He stated that he favored a free marketplace, yet the policies he is pursuing, especially redistribution of wealth and government investment in industries that aren’t self-sustaining, continue the trend toward a centrally-planned economy.
- He stated that the middle class didn’t reap any economic benefits when the legislative and executive branches of federal government were controlled by Republicans. He stated that the middle class was shrinking under Republican rule, and that he intended to grow the middle class starting with making temporary middle class tax cuts permanent. On the other hand, he acknowledged a high unemployment rate with a forecast that it will take a long time for private sector employment to rebound. Widespread unemployment has hit the middle class hard, and threatens to shrink the size of the middle class.
- He derided our largest corporations and our most influential industries for being left to regulate themselves while taking credit for saving our nation from a financial meltdown. The most influential industry that regulated itself was the financial industry, and the largest corporations within that industry, who were the most egregious with their excesses, were the beneficiaries of bailouts that Obama supported. As for self-serving regulators and bad actors in the financial industry instrumental in its demise, it should be noted that, in the Obama administration, Ben Bernanke, Tim Geithner, and Larry Summers are charged with the responsibilities of financial industry oversight.
- Though acknowledging that he and his party have the clout to enact laws without the help of the Republican Party due to the overwhelming Democrat majority in the current Congress, Obama, over and over again, scapegoated the Republican caucus for thwarting the legislation that the White House sought to advance.
One of the most astonishing claims that Obama made was that Ohio’s economy had grown over the past several months. Is that what Ohio’s economy looks and feels like to you? To me, the comment was designed to bolster the faltering Strickland gubernatorial campaign.
His frequent negative references to John Boehner alongside his criticisms that Congressional Republicans wanted to revert to failed economic policies of the past that put our nation’s economy in the ditch indicated to me that Obama is alarmed at the number of Ohio’s Congressional races now rated as tossups rather than rated as leaning toward the Democrat incumbents.
Stemming the Republican tide in the polls leading up to the general election, particularly in the swing state of Ohio, was clearly the main aim of the President’s speech.
Congressional Republicans must indeed share in the blame for our nation’s economic collapse.
Republicans (and Democrats) aided in distorting the marketplace, thus short-circuiting the natural corrections characteristic of a free marketplace. These marketplace distortions create an uncompetitive business climate (with the health care coverage provider industry among the least competitive). These marketplace distortions take many forms, from regulations that favor some industries and corporations over others; to earmarks and government investments in enterprises that aren’t self-sustaining; to regulatory bodies comprised of the agents of the largest corporations in an industry to the exclusion of smaller businesses and neutral, disinterested, independent parties; to forging private-public partnerships and forming hybrid private-public companies; to steering government contracts; to government marketplace intervention in the interest of political expediency; to carving out exceptions to the tax code for politically connected companies. Lobbyists secure these marketplace advantages using incentives such as political campaign contributions.
Republicans (and Democrats) have enacted federal budgets that have run up deficits and incurred more government debt.
The business community is complicit in these machinations that have brought about our nation’s economic plunge beyond what has already been stated. For example, the business community has clamored for greater government transparency and accountability, yet transparency and accountability should apply to the business community as well. The Wall Street meltdown should never have happened after the debacle of Enron and the related demise of the Arthur Anderson accounting firm, but unethical business leaders continue to sidestep accountability, as the recent bailouts clearly illustrate.
These are the factors that ran our economy into the ditch–not free market capitalism, not limited government, not austere government spending, and not low tax rates.
In this speech, President Obama states that our nation has already tried the “failed” Republican approach of free market capitalism, limited government, austere budgets, and low tax rates. Personally, I think the Congressional Republicans have talked the talk, but have not walked the walk, thus the approach Congressional Republicans give lip service to has NOT been tried. Rank-and-file Republicans, independents, Libertarians, and even clear-thinking Democrats hope that Congressional Republicans have gotten the message (a message delivered through public polling that shows the electorate’s overwhelming disapproval of Congress and through rallies such as those organized by Tea Party groups) and finally mean what they say.
So, as we approach the November elections, should we support Congressional Republicans or Congressional Democrats? Isn’t there a risk that Congressional Republicans still won’t walk the walk? For myself, at least the Congressional Republicans are saying the right things about free markets, limited government, budget cuts, and tax cuts, while the Congressional Democrats and the President, himself, eschew such principles, leading me to support the Republican candidates for Congress. After all, who is more likely to deliver on those right things? I think since the leading Republicans are at least talking about pursuing those right things, they are more likely to deliver on them than leading Democrats are, since the Democrats are talking about pursuing an opposite approach.