You already knew I was not going to be impressed with Obama's "jobs speech" on Thursday night, so I won't bore you with my take. Instead, I'll treat you to Barone's response, which I consider a serious, thoughtful analysis. Enjoy:
Barack Obama looked and sounded angry in his speech to the joint session of Congress. He bitterly assailed one straw man after another and made reference to a grab bag of proposals which would cost something on the order of $450 billion—assuring us on the one hand that they all had been supported by Republicans as well as Democrats in the past and suggesting that somehow they are going to turn the economy around. He called for further cuts in the payroll tax (which if continued indefinitely would undermine the case of Social Security as something people have earned rather than a form of welfare) and for a further extension of unemployment insurance (perhaps justifiable on humanitarian grounds, but sure to at least marginally raise the unemployment rate over what it would otherwise be). He called for a tax credit for hiring the long-term unemployed (unfortunately, these things can be gamed). He gave a veiled plug for his pet project of high-speed rail (a real dud) and for infrastructure spending generally (but didn’t he learn that there aren’t really any shovel-ready projects?). He called for a school modernization program (will it result in more jobs than the Seattle weatherization program that cost $22 million and produced 14 jobs?) and for funding more teacher jobs (a political payoff to the teacher unions which together with other unions gave Democrats $400 million in the 2008 campaign cycle). “We’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it would do for the country.” Yeah, sure. Like the screening process that produced that $535,000,000 loan guarantee to now-bankrupt Solyndra. And Congress should pass the free trade agreements with Panama, Colombia and South Korea. Except that Congress can’t, because Obama hasn’t sent them up there yet in his 961 days as president.
Obama assured us that this would all be paid for. But as far as I could gather, he punted that part of it to the supercommittee of 12 members set up under the debt ceiling bill. He now blithely charges it with coming up with more than its current goal of $1.5 trillion in savings by Christmas. Oh, and he’s going to announce “a more ambitious deficit plan” that will “stabilize our debt in the long run”--11 days from now.
In the meantime, he called for higher taxes on “a few of the most affluent citizens”—as if this could pay for all the spending he’s been backing. What’s interesting here is that he seems to have left the way open for a 1986-style tax reform, cutting tax rates and eliminating tax preferences, or at least that’s how I read these words: “While most people in this country struggle to make ends meet, a few of the most affluent citizens and corporations enjoy tax breaks and loopholes that nobody else gets [did he look up at his guest Jeff Immelt, CEO of GE, which paid no corporate tax on $14 billion in profits last year?]. Right now, Warren Buffett pays a lower tax rate than his secretary—an outrage he has asked us to fix [actually, Buffett could volunteer to pay more if he wants to]. We need a tax code where everyone gets a fair shake, and everybody pays their fair share. And I believe the vast majority of wealthy Americans and CEOs are willing to do just that, if it helps the economy grow and gets our fiscal house in order.” As I read it, he’s not insisting on higher tax rates, though he apparently is not ready to agree to a tax reform that is scored as revenue-neutral, as the 1986 act was. Also, if Obama wanted a 1986-type reform, he could have used the Bowles-Simpson fiscal commission’s recommendations last December as a springboard; instead, he brushed them aside without a murmur. So on balance I don’t think he’s serious on this, but there is a glimmer of a possibility that he is.
Straw men took a terrible beating from the president. He assailed “tax loopholes” for oil companies, the chief one of which is that they are treated like other companies classified as manufacturers. The administration proposal is that the five largest oil companies shouldn’t be, because—well, because we want to get our hands on more of their money. Today’s Republicans, he gave us to understand, want to “eliminate most government regulations” and “wipe out the basic protections that Americans have counted on for decades.” And, he suggested, they would never have created public health schools or the G.I. Bill or research universities.
When Barack Obama says, “This isn’t political grandstanding,” you have a pretty good clue that that is exactly what it is. Lest anyone doubt that, consider this from the third-to-last paragraph. “You should pass it. And I intend to take that message to every corner of the country.”In other words, this was a campaign speech. It might result in passage of some of Obama’s proposals, and some of them might even do some good. But of course we didn’t see the kind of change of direction on policy that Bill Clinton made in 1995 and 1996, which enabled him to rise above his party’s 45% level of support in the 1994 elections (that’s the Democratic percentage of the House popular vote) and with 49% of the vote win reelection in 1996. (Ross Perot won 6% that year; polls suggest two points of it would have gone to Clinton had Perot not run.) I don’t think these proposals have the potential to turn around the careening economy, I don’t think many of them will become law and I don’t think this campaign initiative is likely to prove successful. From the demeanor and affect of the unhappy warrior at the podium last night, I suspect he may feel the same way.