The Unstimulated Obama Economy
Newsflash from The New York Times: President Barack Obama’s stimulus did not work. No, the Times doesn’t say that in so many words, but in an op-ed this morning, the paper laments the sputtering economy and the fact that Washington just isn’t doing enough to help the economy grow. The problem, of course, is that Washington has done too much of the wrong things to get the economy moving again.
The economic news that’s really sticking in the Old Gray Lady’s craw is revised data released last week that shows the economy’s growth stuck at 1.8 percent, slow consumer spending, stagnant wages, higher prices for gas and food, the poor housing market, flagging consumer confidence and a recent Labor Department report showing a higher-than-expected rise in claims for jobless benefits. The Times complains:
The grim numbers tell an unavoidable truth: The economy is not growing nearly fast enough to dent unemployment. Unfortunately, no one in Washington is pushing policies to promote stronger growth now.
What the Times forgot to mention, though, is that Washington over the past two years has done a lot—a whole lot—with the biggest ticket item being the Obama-Reid-Pelosi $787 billion stimulus that was designed to “create or save” 3.5 million new jobs by 2011. Despite the extraordinarily high cost, that didn’t happen, and unemployment has increased to 9 percent.
But don’t tell that to the Obama stimulus apologists, though. In an interview on Fox News Sunday, host Chris Wallace remarked that in light of the dismal economic numbers, the Obama Administration’s policies and near $1 trillion stimulus “isn’t working” and asked Rep. Donna Edwards (D-MD), a member of the Congressional Progressive Caucus to respond. For her, those dots just don’t connect:
Well, I mean – I don’t know that I agree with that, because, you know, first of all – let me finish here. I mean, first of all, the trillion dollars for stimulus package – actually $786 billion – was absolutely necessary to make sure that this economy didn’t go into a freefall. We also know that we had to make sure that we began to stimulate the kind of growth that we need in this country to invest in the future.
For the American people, though, that reality is hitting home. Joseph Lupton, an economist at JP Morgan Chase and Company, says, “There are pretty big costs to not really generating a sizeable recovery.” And as The Wall Street Journal reports, those costs are high unemployment, with 5.8 million people out of work for more than six months.
The House GOP last week issued a proposal to spur job growth, including reducing regulation and taxes and promoting free trade – essentially aimed at making it easier for businesses to grow, thereby growing the economy and reducing unemployment. And, like clockwork, the left went on the attack claiming that it’s nothing more than “old ideas, fancy new clip art,” while the Times described it as “more of the same ‘fixes’ that Republicans always recommend no matter the problem.” Ironically, though, the left is calling for more of their same ideas – “government help” must come to the rescue, the Times says.
And how do they plan to pay for it? Higher taxes to finance more spending, with “a combined federal and state top tax rate on earnings of 62%.” The government needs to stay home. Brian Riedl explained why government intervention to boost the economy doesn’t work:
Removing water from one end of a swimming pool and pouring it in the other end will not raise the overall water level. Similarly, taking dollars from one part of the economy and distributing it to another part of the economy will not expand the economy.
There are no-cost ways to get the economy moving again, such as reforming regulations to reduce unnecessary business costs, reforming the tort system, removing barriers to energy production, reducing taxes on companies’ foreign earnings if they bring their earnings home, and passing pending free trade agreements. And with Congress confronting spiraling debt, they need to get their economic house in order.
Despite all the “help” President Obama delivered in the first two years of his presidency, the economy is stuck in the mud and can’t get out. It is overburdened by taxes and regulations, and businesses don’t want to move forward into the dark abyss absent some certainty that the government won’t shackle them with more taxes and regulations down the road. America has had enough of that brand of “help.” It’s time for something different.