As it pours outside my home this morning, on a vacation day that I had planned to take my family to Fenway Park for the afternoon Red Sox game against the Seattle Mariners (perhaps the rain is fitting?), I note that the so-called "recovery summer" is currently neither. Read that Mike Allen report at Politico.com. It is best seen as a work of fancy, wishful thinking that clicking your heels together like Dorothy and chanting "there's no place like a growing economy" will doubtless make it so. The actions of the government have, with the exception of stabilizing some giant financial institutions with money that is being paid back, failed rather dramatically.
There's the efforts in housing, including HAMP and the home-buyers tax credit. Result? A plunge in home sales now that the credit has expired, and government-assisted mortgage restructuring that has helped one-tenth of the number it was alleged to help, has interfered with more successful private efforts,is leading to a second round of defaults, and (I'm sure) is more costly than it ever was projected to be.
In order to stabilize the residential markets, jobs have to return and prices have to stabilize. The Obama administration has gotten in the way of both processes. Thanks to ill-advised taxpayer-subsidized interventions, prices have remained unrealistically high, and no one wants to buy until they pay the right amount for the value of their investment. And until we quit penalizing capital and introducing massive ambiguities into regulatory regimes and expanding them, jobs won’t get created and new buyers won’t materialize anyway.
There's the uncertainty over the looming tax increase due to the unwise expiration date on the Bush-era tax cuts. Here it is, nearly September, two months before the mid-term elections on which Congress-folk will be focusing, and for all we know in this down economy everyone, or perhaps only the producers and job-creators, will be facing a sizable stifling tax increase.
Then there's Obama-care, with its court-challenged individual mandate, its burdens on small businesses that produce most of the jobs, and its cost-cutting fantasies that everyone now understands were more wishful fancy on the part of those who passed it. Notably, those who passed it touting those savings now no longer make that case.
Yesterday Republican John Boehner of Ohio, the minority leader, called (among other things) for a reversal of many of these harmful policies. Ruth Marcus in the Washington Post proves to be scared of the mythical boogieman in the closet, rather than the actual monster in the room.
Let's take Boehner's prescriptions seriously for a moment. Dispense with the most obviously political parts -- firing the economic team, as if that would change the underlying policy
Perhaps not, but that''s an Obama problem, not a Boehner problem.
Leave out, also, the phony controversy. Boehner denounced an obscure provision of the health care law that requires businesses to report expenditures greater than $600. It was a good idea -- cracking down on tax cheats -- poorly executed. Both sides want to change it.
It's not clear that both sides want to change it - if so, it could easily have happened already as the problem is now well known and Republicans are squarely behind removing it. This is not a "phony" controversy at all. It'll be very real to the businesses that have to abide it.
And forget the Republican's favorite legislative bogeymen -- measures to enact cap-and-trade, or to make it easier for unions to organize. Those aren't likely to pass.
Yes, but these further burdens to the struggling economy are not likely to pass primarily because of Republican opposition. Ms. Marcus thus gives no credit to Republicans for their "good" (in her estimation) ideas. She appears, however, to be agreeing that Cap & Trade and card check are indeed bad ideas, and that is a useful admission. Step One, perhaps.
So the Boehner plan boils down to the internally inconsistent demands that the president forswear any plan to increase taxes during a recession and that he immediately put the brakes on spending -- during that very recession.
These are not internally inconsistent. It will be detrimental to raise taxes in a recession - that much you can count on. And the Obama spending has been on "stimulus" projects that have not stimulated and on protection (and expansion) of government employees, many of whom have both excessive salaries (e.g., Bell, CA) now and unsustainable pensions to come. Cut their pay by 20%? Why not? It's not as if their pay is lower than private sector comparative jobs. And, while you're at it, eliminate any unnecessary or redundant jobs. And give them the same retirement options the rest of us have - 401k, Social Security, and IRAs.
Economic uncertainty is built into the Obama economic program. If Mr. Obama were truly concerned about recovery he certainly wouldn't have pursued the mother of all uncertainties and bigger government boondoggles, which only adds to the uncertainty. And the debt.
