What Obama Really Needs Is A Good LOSS

Politicians hate losing. For this reason, President Obama is contiunally counting congressional votes and pulling back from positions where it looks like he will lose if he pushes the issue to a final vote.

Because of this aversion to high profile losses, Obama has throughout his presidency pre-censored himself and avoided a prolonged push for, among other things, a Medicare option for all, elimination of the Bush tax cuts on the wealthy, a balanced approach to debt reduction, and a larger 2009 economic stimulus package. On those issues and others, the President has made his case briefly, if at all, and then quickly scaled back to win the necessary votes.

Presumably, Obama has done this because he worries that losing a big legislative vote will hurt his credibility. That’s valid, to a point. You don’t want to make a habit of losing legislative fights. But when the public is overwhelmingly on the President’s side, it’s an election year, and there is an important point of political differentiation to highlight, occassionally it is better fight and lose than to cave and “win.”

One issue where Obama should fight and lose is on a Fall 2011 jobs package. In the next few days, Obama should announce the kind of jobs package that he and his economic advisers believe will be best for the country, not the kind jobs package that can garner enough votes in a historically unpopular Congress. (At the same time, he should also announce longer-term deficit reduction proposals, to show that he also understands and values that long-term economic challenge as well.)

Then, Obama needs to campaign for that jobs creation package full time for at least 6 months. Not 6 hours, or 6 days, or 6 weeks. 6 MONTHS. He needs to campaign on it relentlessly throughout the Republican primaries — sea to shining sea — and repeatedly call out his opponents on THAT issue, not the silly issues du jour (e.g. the silly thing that Candidate X said about a culture war issue). He needs to educate the public about why his approach to job creation is best for America, over and over and over again.

Then Obama will lose big. The Republicans control the House and will threaten a filibuster in the Senate. It is a well established truism that congressional Republicans are more committed to defeating Obama than they are to helping unemployed Americans and struggling communities, so Obama will lose a vote on any given jobs package he proposes. This we already know.

But Obama not only needs to lose, he needs to lose as publicly and loudly as possible. He should force GOP Senators to actually filibuster through several nights. He should speak out in an unvarnished way after every legislative setback. Then, after he gets his ass kicked by the most unpopular Congress in recent history, Obama needs to stand up and unreprentently tell Americans that he doesn’t for one second regret that he fought Congress to the end on behalf of people and communities in need.

Then, and only then, in February or March, should President Obama start compromising with Congress to try to pass the next best possible jobs package, which will be pathetically insufficient.

Why should Obama set himself up to lose the jobs creation debate in the most public and prolonged way possible?

1) To spotlight his top values and priorities. The President needs to show Americans what he really stands for at his core – using government to help working families and communities in need — and how deeply committed he is to it.

2) To spotlight his opponents’ top values and priorities. The President needs show Americans what his opponents really stand for at their core – blocking efforts to help working families and communities in need – and how deeply commited they are to it.

3) To educate the public. Obama needs to prove to Americans, through months of repetitive, non-condescending conversations, that his approach makes sense.

Losing in a high profile way will feel lousy to the leader of the free world. But losing an election will feel worse. And framing the next election as being between “the guy who unsuccessfully fought his ass off to try to create jobs” versus “the person who continually killed the efforts to create jobs because she/he wants to resurrect the failed Bush era approach” is the kind of framing that can, against all odds, get Obama reelected.

– Loveland

60 thoughts on “What Obama Really Needs Is A Good LOSS

  1. Newt says:

    One little flaw here: Government doesn’t “create” jobs.

    Far better for Obama to focus on macro-economic factors that allow the private sector to create jobs.

    America wants a sound economy – not Hoovervilles and make-work Civilian Conservation Corps phony government jobs.

    Jobs packages are a political stunt – a PR tactic not rooted in substance.

    1. Joe Loveland says:

      Ok, I’ll take the bait.

      Right now, consumers as a group aren’t spending, because they’re in debt, unemployed, have no home equity, and/or are nervous about the jobs outlook. That hurts the economy.

      At the same time, the private sector isn’t spending, in this country. That hurts the economy.

      State and local govenrments aren’t spending, because their revenues are down due to high unemployment, “no new tax” pledges, and the federal goverment stimulus has stopped propping them up. That hurts the economy.

      All of this non-spending hurts the economy. Money isn’t sufficiently flowing to get the wheels of commerce and society turning.

      Given those things, if you want to stimulate the economy, you basically have three choices a) bribe the private sector to spend on job creation (e.g. tax incentives), b) have the spender of last resort, the federal government, spend on things that directly employ people (e.g. high speed rail, energy efficient govt buildings, etc.) and c) help state and local goverments get laid off teachers, cops and other valued workers back on the job. I suspect Obama will do all three things, and all three of those government actions in different ways help stimulate more people becoming employed and having a paycheck to support other businesses in their communities.

      Some people also advocate for stimulating consumer demand by cutting payroll taxes, but I’m just not sure that is all that stimulative at a time when consumers are disproportionately putting any extra money in a rainy day fund, or paying down debt. That’s a politically popular thing to do, but I’m not sure giving all consumers a few more bucks the quickest way to get people working.

      I think where my friend Newt and I disagree is that I believe that government jobs — teachers, cops, pot hole fillers, public health workers, fire fighters, social workers, conservation officers, road construction workers, etc. — are valuable and worth creating and saving. There is no question that goverments create those jobs and that doing so benefits all parts of the economy, there is just a difference of opinion about whether the jobs themselves produce a worthwhile good and service. I don’t suspect Newt and I will reach agreement on that point today. Probably tomorrow though.

  2. JoeW says:

    I worry that the GOP has the lock on beating the drum for “jobs, jobs, jobs” and that Obama would come out sounding like “me too, me too, me too.” I would love to see your plan executed, but it seems to pie in the sky. I long gave up on Obama the P.R. Ninja.

  3. Joe Loveland says:

    Interesting prognostication from Slate:

    History is on President Obama’s side as the 2012 elections approach.

    And by “history” we mean Allan Lichtman, an American University professor who has gone 7-for-7 at predicting presidential elections since he developed his candidate-picking system roughly two decades ago.

    Lichtman says that based on the 13 criteria he has used to correctly forecast every presidential election since Ronald Reagan’s re-election victory in 1984, Team Obama can rest easy. “Even if I am being conservative, I don’t see how Obama can lose,” Lichtman told US News.

    The college professor developed his system back in 1981 and published the rather basic formula in his book, The Keys to the White House. Basically, the “keys” test the recent performance of the party that is currently in the White House; according to US News, if six or more of them go against the party in power, then the opposing party can start picking out the bands they want at the inaugural ball.

    “The keys have figured into popular politics a bit,” Lichtman says. “They’ve never missed. They’ve been right seven elections in a row. A number that goes way beyond statistical significance in a record no other system even comes close to.”

    Here’s a brief rundown of how Lichtman scores Obama on the 13 criteria:

    1) Incumbent party picks up seats in preceding mid-term. Point Republicans.

    2) There is no serious challenger for the incumbent party nomination. Point Obama.

    3) The incumbent party candidate is the sitting president. Point Obama.

    4) There is no significant third party challenger. Point Obama.

    5) The economy is not in a recession during the election campaign. Push (Lichtman declares this one “undecided.”)

    6) Real per capita economic growth during the past term is at least equal to mean growth during the previous two terms. Point Republicans.

    7) The incumbent administration pushes through major national policy changes. Point Obama.

    8 There is no sustained social unrest during the previous term. Point Obama.

    9) The incumbent administration has no major scandals. Point Obama.

    10) The incumbent administration suffers no major foreign/military affairs failure. Point Obama.

    11) The incumbent administration achieves a major success in foreign/military affairs. Point Obama.

    12) The incumbent party candidate is charismatic. Point Republicans.

    13) The challenging party candidate is not charismatic or a national hero. Point Obama.

    Final score (again, we stress, on Lichtman’s scorecard): 9-3-1, Obama wins.

      1. Joe Loveland says:

        Yeah, 7, 8, 10, 12, and 13 seem especially open to debate. I don’t think Lichtman’s assessment in those areas is clearly incorrect, but they’re certainly open to argument. How do you score something when reality is one thing, and public perception is another, such as on “major accomplisments?” I’d argue that you look to polling, if the public doesn’t think there were major accomplishments, then that is how you score it. I’m not sure Lichtman sees it that way.

  4. Erik Peterson says:

    What is exactly this new approach that isn’t like ‘the failed Bush approach’? Let’s contrast.

    As a successful ad / PR guy I have to think by now you (3 years removed from 2008) you must be getting some sense of how stupid this is. I’m talking factual, as well as the practical matter of creating a public narrative.

    1. Joe Loveland says:

      Re: “What exactly is this new approach that isn’t like ‘the failed Bush approach?'”

      Revoke the Bush tax cuts.
      Implement health reform vehemently opposed by Bushies.
      Implement Wall Street reforms (and pass stronger ones if Congress turns over)
      Pass a jobs bill to supplement the 3 million created with the 2009 bill.
      Finish getting out of Bush’s Iraq War.

      Perry, Romney and Bachmann all are pushing Bush-era policies and philosophies, and Obama would be a fool to not center his campaign on that fact.

      1. Erik Peterson says:

        Besides being of low utility, a lot of that is water under the bridge. Reforms are passed.

        Joe, the Bush tax rates might have some modest budget benefits, but there’s no one in the nation that believes it would be an economic benefit. And they are correct in that evaluation. And the reason is, it decreases that all important consumer spending that you noted. Similiar with health care. It might have been worth doing, but it’s not going to save anyone any money. (Mind you, I’m sure a contradicting link will be provided… but you really have to be profoundly deluded or dim to believe otherwise. Premiums will go up for people who pay premiums. The cost of employing people will go up.)

        3 million jobs were not created. There may have been some damage mitigation, but no jobs were created. And that should be the point. You mitigate while some profound changes are implemented that introduce both stability and dynamism into the economy. You can’t stimulate forever.

        There should be some things that can be done that are so intuitive that Republicans could obstruct only at their own peril, but Obama is wedded to things like ‘green jobs’. IE, making some activities so expensive that inefficient things can e more attractively priced.

        My point is not to argue the basics. My point is that the Obama economy, minus the mortgage industry (which no longer exists), is not radically different from the Bush economy. And people know this. Contrasts to Bush are not compelling arguments. It’s 2011. They also know that Obama engages in a lot of impractical folly. Corporate jet owners, green jobs… The problem is people are rolling their eyes every time he speaks.

      2. Erik Peterson says:

        Things that have no benefit to the economy

        Green jobs
        Payroll tax cuts
        Restoring the Bush tax cuts
        Quantitative easing
        Extending unemployment insurance
        HAMP
        Erstwhile ‘Jobs’ packages
        Tax incentives

        Things would benefit the economy

        Domestic oil and gas production
        Corporate tax reform
        Capital gains tax reform

        So, the absurdity is that as a conservative I’m arguing for Obama to embrace conservative economic principles. So noted. But I do think a robust welfare state and social safety net would be appealing to independents if there was a dynamic private economy. The great thing is, this dynamic private economy would pay for the robust safety net. That was the appeal of Bill Clinton.

        The problem is in Obama, Democrats are wedded to their dystopia where carbon and production jobs are made expensive, ya know, and everyone has a ‘good’ green job, but no one consumes anything… because materialism and consumption are bad….

        Because of the paradoxes, it’s flawed. It does not work. People know this. It can’t be sold.

  5. Gary Pettis says:

    For the sake of time, I went ahead an googled a range of searches, such as “winning by losing in history” and “how to win by adopting a losing strategy.”

    In all honesty, I did not hit a lot of pay dirt. Sure, there are examples of weight loss successes and failures and nifty gamesmanship tips, but there is nothing out there that would validate the notion that it would be smart for Obama to “lose” on the jobs issue now, and then later on “win” by becoming the champion dealmaker with the Republicans.

    If you really want Obama to win in 2012, perhaps the headline for this posting should have been “What Obama Really Needs Is To Turn Republican.” He is already halfway there. He basically hijacked Bush’s foreign policy positions, and he will have to turn hawkish when he goes nose to nose with Iran, maybe as early as spring 2012.

    During this term, he will never be able to roll back the Bush Tax Cuts because the election is now a little more than 14 months away. That’s too much in too little time realizing that Obama has been jawing about it a lot, but he has failed at turning himself into a tax-increasing action figure.

    Plus, if Obama became a Democrat Disguised As A Republican, confusing the hell out of the Tea Partiers and providing the impetus for someone to start an extreme far-Left Third-Party Campaign, whom he could refer to as the loony fringe, he would certainly win again.

    1. Joe Loveland says:

      Re: “winning by losing in history”

      Mandela – South African indepedence
      MLK – civil rights
      Goldwater – Reagan-style conservatism
      Truman…Hillary – Obamacare
      Harvey Milk – majority of Americans now support gay marriage

      In the process of making their case and getting pummeled in prolonged defeats, each of them moved their issue forward. They could have said “let’s only go as far as the opponents will allow us,” but each of them pushed what they felt was right and aggressively made their case, knowing they may well lose in the short-term.

      1. Gary Pettis says:

        Civil Disobedience Means You Never Have to Say Your A Loser

        Martin Lutheran King and Nelson Mandela were devout followers of the principles of Civil Disobedience. They both adopted many of the actions and tactics of Gandhi.

        There paths are not mired down with a mix of lose-win strategies. It was consistent, persistent, never wavering, nonviolent acts of protest. They had setbacks not prolonged defeats.

        Civil disobedience is the active, professed refusal to obey certain laws, demands, and commands of a government, or of an occupying international power.

        When someone says let’s set go through a couple of defests so we have a chance at winning in the end, I’d really start to question the qualities of the leader whom I am following. Wouldn’t you?

        Summary:

        “I suppose leadership at one time meant muscles; but today it means getting along with people.”
        –Mohandas Gandhi

        Harvey Milk, etc.

        I found this to be the most surprising example in Joe’s laundry list of examples of “winning by losing in history.”

        Harvey Milk, along with San Francisco Mayor George Moscone, was assassinated in 1978 by Dan White. It seems that White was pissed that the mayor did not re-appoint him to the Board of Supervisors and there was existing tension between Milk and White. Milk was the first openly gay person to be elected to public office in California.

        But the long road to seeing such large support nationally for gay marriage really took root in the late 1960’s. The civil rights movement, the San Francisco counter-culture movement and the Stonewall Riots in New York City in 1969 all had an impact on creating a broader awareness and in some cases, acceptance of LGBT lifestyles.

        This where the credit is due for starting a path for the LGBT community to fight for their rights from back then until today.

        This is where the action started and Milk was a product of the increasingly open gay community in San Francisco of which he was part.

        Summary: Harvy Milk lost his life, but there is no evidence that he was one willing to take it on the chin one day to come back and fight another day. He was scrappy all of the time. He was persistent like Lincoln. Setbacks were seen as obstacles to overcome smartly and sanely.

        “All over the country, they’re reading about me, and the story doesn’t center on me being gay. It’s just about a gay person who is doing his job.”

        -Harvey Milk

        Most people who show up for work everyday don’t have in mind, “How can I cause a losing situation today to create a longer impact down the line that might have a better benefit for me?”

      2. Joe Loveland says:

        Gary, I respectfully disagree. We probably should just let it go, because we’re in different universes here, but…

        Ghandi found himself in jail four or five times because he was pushing an agenda that was too progressive for the political establishment of his time. If he had compromised and only gone as far as the political establishment was willing to go at that time, he wouldn’t have been jailed! By pushing things further than the establishment could accept, Ghandi obviously lost a lot (his freedom) before he won, and the manner in which he lost helped move him toward victories.

        As for Truman, sure, no single factor ever turns an election. Sure, running against the “do nothing Congress” wasn’t the silver bullet of the 48 campaign, any more than the economy was the silver bullet…or any single factor is ever an electoral siliver bullet. The fact is, Truman aggressively marketed his legislative losses in a way that at least neutralized what otherwise would have been an electoral negative, and most political observers believe he made it into a net political positive. We could argue all day about how much of a net positive, but I know of no evidence that it was a net negative. So, he turned his losses into something that contributed to his win.

        Milk. He convinced gay men and women to go public at a time when that was much more dangerous than it is today, and it’s plenty dangerous today. People coming out normalized gayness, as we discovered that gay people were our friends, relatives, neighbors and coworkers. That impacted the polls. That is impacting policy. So, Milk’s losses — his courageous adocacy of decloseting didn’t appreciably move mainstream America during his lifetime — is still helping to move his cause to a victory that seemed unthinkable in my youth. To dismiss his considerable contribution by pointing out the obvious — that he wasn’t the first and only gay rights advocate on the planet — makes no sense to me.

        Again, on difficult issues, losing loudly is often a way to get to the ultimate goal, and it’s often a better way than winning the miniscule incremental gains that the poltiical establishment of the day will allow.

      3. PM. says:

        Gary:

        Nelson Mandela really wasn’t much of a disciple of Ghandi. Madiba was the founder of Umkhonto We Sizwe, the armed wing of the ANC–he was underground inside South Africa setting this up when he was arrested in Rivonia. Indeed, he felt that the creation of an armed resistance was critical because civil disobedience was not working.

        Nelson Mandela’s arrest, trial and lengthy imprisonment became an important asset in the victory of the ANC in the 1994 elections–Mandela had been turned into a martyr, a hero in the eyes of the non white population of South Africa because of his vilification by the white apartheid government.

        i would say that this is a pretty good example of winning by losing (although 30 years is a long time to wait).

      4. Gary Pettis says:

        For PM,

        Here is a piece Mandela wrote about Ghandi. Interesting stuff. Enjoy.

        The Sacred Warrior
        By Nelson Mandela

        “India is Gandhi’s country of birth; South Africa his country of adoption. He was both an Indian and a South African citizen. Both countries contributed to his intellectual and moral genius, and he shaped the liberatory movements in both colonial theaters.”

        http://www.time.com/time/magazine/article/0,9171,993025,00.html

      5. Gary Pettis says:

        For Joe. Saturday morning. A respectful response. From my universe.

        1) JL: Ghandi was “pushing an agenda that was too progressive for the political establishment of his time.”

        GP: Ghandi inspired a movement called the Quit India Movement. If you think trying overthrow a foreign occupier, in this case Great Britain, was being a little too progressive for the political establishment, you need to define what sacrifices you’d suffer and what setbacks you’d endure to come out on top in an actual, almost, nearly bloodless revolution. It was throwing out the government powers, not budding heads with them or asking them to open the door on more liberal policies.

        2) JL: By pushing things further than the establishment could accept, Ghandi obviously lost a lot (his freedom) before he won.

        GP: With Civil Disobedience comes obvious consequences, such as being arrested and serving jail time. There is that willingness to suffer consequences before any act or deed is committed.

        This is what Thoreau said: “Under a government which imprisons any unjustly, the true place for a just man is also a prison.” Thoreau wrote the essay Civil Disobedience.

        This is what Ghandi said: “By noiselessly going to a prison a civil-resister ensures a calm atmosphere.” Going to jail is not a loss; it is instead an expectation that is part of the process. This is not saying horrible things can happen when someone is in prison.

        3) JL: Truman aggressively marketed his legislative losses in a way that at least neutralized what otherwise would have been an electoral negative.

        GP: In your Truman commentary, you need to clarify which term of Truman’s you are referring to. Still, surprisingly, Truman’s approval rating for his first term was 55.6 percent and for his second term, was 36.5 percent. Truman his Fair Deal program at the start of his second term. For all of the presidents since Truman, Truman’s collective average approval was 45.4 percent, the lowest of the group. Truman may have won the battle for his re-election but lost the war of having a lasting positive legacy.

        4) JL: To dismiss his (Harvey Milk’s) considerable contribution by pointing out the obvious — that he wasn’t the first and only gay rights advocate on the planet — makes no sense to me.

        GP: In my writing about Milk, I never once dismissed the guy. Jeez. I contend that specific cultural and social environments can catapult transformative figures like Milk into positions where they can create further change and further champion a cause.

        5) JL: Losing loudly is often a way to get to the ultimate goal,

        GP: Putting aside all of the vernacular about winning and losing, what we have been really discussing here in these posts is the impact of transformative figures in our somewhat recent history who brought about dramatic change and were willing to experience the set backs and sacrifices that are a result of creating change.

        Getting back to Loveland’s original post about “Obama losing,” does anybody who might be reading this post believe that Obama is a transformative figure willing to do what it takes, dealing with sacrifice and setbacks, to bring his vision for the country to fruition during the last year of his term? Or is he just another politician willing to do what it takes to get re-elected?

    2. Joe Loveland says:

      Another example: Truman gets beat up pretty good in his first term. Loses national health insurance and other FDR-like issues. He was judged by many to be a failure. Runs for reelection as much against the “do nothing Congress” as against his opponent Dewey, and wins reelection. If he had pushed a GOP-lite agenda in his first term, the “do nothing Congress” framing wouldn’t have been available to him.

      1. Newt says:

        Obama ran the nation with a Democratically controlled congress for 2 years. Certainly by now we would be feeling the benefits of his agenda, n’est ce pas?

        If government spending were the magic elixir, we would do more of it all the time. The problem is, the candy jar is empty and government is a drag on American prosperity.

        America now knows this.

      2. Gary Pettis says:

        How could President Truman lose when during some of his years in office, the economy was rocking. Of the presidents since Truman, Truman had the second lowest level of unemployment at 4.26 percent. During his term, 8.4 million jobs were created when the country’s population averaged 155,000,000.

        During Obama’s nearly first three years in office, there is double the population amount but unemployment is at around 9 percent and job creation appears to be at zero or in negative numbers.

        If Obama had some of the wind to his back economy-wise that Truman had, Obama surely would have more political capital to spend on his liberal agenda.

        Still, liberal Truman touted his Fair Deal domestic program after reelection in 1949. It was a 21 point program, many ideas were noble and many were downright Socialist leaning, e.g., legislation to ensure full employment. This was a time, remember, when fears about socialism and communism were pervasive from main streets to rural communities.

        Because there generally were economic “good times” in the country, a lot of people turned conservative when it came to the growing size of government and to the types of programs that gobble up tax dollars.

        Truman’s national health care program had both good and bad ideas for the times. His national health insurance fund intended to be run by the federal government would be open to all Americans but depending on it for coverage would be optional. It tanked because of fierce opposition from the AMA and others. It sounded like a socialist idea.

        And unlike today, when the majority of Democrats are in line for Obamacare, Truman faced serious opposition to from conservative southern Democrats. Truman’s vision for national healthcare, however, served as the basis for Medicare under President Johnson.

        Summary: There is no evidence that Truman intentionally had a couple loss leaders in his Fair Deal list of 21 programs. He believed in all of them and fought hard to give each one a chance of winning.

        “In short, while the idea of the underdog Truman fighting against the ‘Do Nothing Congress’ sounds inspiring, the success of his re-election campaign was driven by the state of the economy. Despite all the counter-intuitive hype, the same logic will apply to Obama.”

        From “The Misleading Story of Harry Truman’s Comeback”
        Brendan Nyhan
        The Huffington Post
        November 10, 2010

        Background Reading:

        http://www.huffingtonpost.com/brendan-nyhan/the-misleading-story-of-h_b_781837.html

        http://findarticles.com/p/articles/mi_m0843/is_3_34/ai_n27871607/

  6. Joe, you are pretty much right on in your posting. But the main reason you are right is not regarding pinning down his GOP do-nothing house or by setting up his agenda to win the PR game for the up-coming election cycle.

    The main reason you are right is because–America needs a jobs. As president, we look to him to lead us. But he doesn’t need to ‘show’ commitment to that need…he NEEDS TO BE committed to that need.

    Anyone who is not working for that need should have some ‘splaining’ to do when they go back to their constituents. And that all his job is supposed to be…to lead. Then it is the congress’s job to get it done, so it is on both sides of the aisle and both houses, it is their job to figure out the program to do it (not Barry, we have GOT to get away from our celebrity all-powerful executive fixation…seriously!).

    The executive branch is just supposed to set the ‘jobs’ agenda and then sign the ‘jobs’ bill (also note: ‘Jobs’ is a single word, and the intentional result of WHATEVER program these supposed political geniuses in conjunction with their supposed business/financial geniuses who support them can come up with that puts more people back to work)…the bills the most unpopular congress in history is supposed to be sending him.

    Why are the congress critters that unpopular…the people figured it out before they have–they have lost track of the running a country goal and allowed themselves to be divided to the point of a complete standstill, and all the kabuki theatre, and finger-pointing and blame-passing isn’t fooling anyone.

    Which as long as I’ve taken you this far–why is the congress at a standstill…it is the lobbyist policies they are beholden to, the anti-everything policies, the do-nothing unless it makes the rich richer, the special interests even more special policy.

    Speaking of special, here’s a note for richie bankster–here is the world you wanted, one rife with predator banking rules and insanely over-inflated bubble-value credit that you refuse to take a haircut on. Come on out of your gated community and have a drink some night and enjoy it.

    You may not have noticed, but while your money bin has gotten much bigger, the real world you can enjoy has gotten much smaller. So just go ahead and keep re-investing all the nation’s wealth into meaningless hedges and derivatives, short-sell all us people who can’t be trusted with any of its own money back here to use in the real economy.

    Think of it as the real value of a credit default swap. I’ve noticed, and I’m not alone. That is where the real economic disconnect is.

    1. Gary Pettis says:

      Obama as Prince Charming: Kabuki Theater Style

      And speaking about the powerful lobbyists and other influence peddlers, it’s common knowledge that Obama owes his election a lot to the overwhelming support of unions. In fact today, the president is in Detroit speaking at what is a union rally to practice his jobs speech–or frankly, a re-run of his jobs speeches.

      Obama has been beholding to unions, obviously, but unions only represent 11.9 percent of wage and salary workers. What about the rest of the American working men and women who don’t have that clout in the White House? Granted, unions do a great job mostly in organizing workers to protect their rights and fight for competitive benefits. That’s their job but their not in the business of job creation.

      Cow-towing to this level of backing, Obama has been perceived to be anti-business and a business regulatory fiend. Still, the President likes to talk about doing something about jobs, as seen below:

      2009 Obama State of the Union Speech

      “That is what my economic agenda is designed to do, and that’s what I’d like to talk to you about tonight. It’s an agenda that begins with jobs.”

      2010 Obama State of the Union Speech

      “Now, as we stabilized the financial system, we also took steps to get our economy growing again, save as many jobs as possible, and help Americans who had become unemployed.”

      2011 Obama State of the Union Speech

      “But we have never measured progress by these yardsticks alone. We measure progress by the success of our people. By the jobs they can find and the quality of life those jobs offer. By the prospects of a small business owner who dreams of turning a good idea into a thriving enterprise. By the opportunities for a better life that we pass on to our children.”

      It’s important to note that during 2009 and 2011, the Democrats had majorities in the House and Senate.

      So far, nothing to tip the leadership scale positively for the President when it comes to jobs, jobs, jobs.

      Finally . . .

      The production of Cinderella in Kabuki Theatre Style with Barack Obama starring as Prince Charming.

      Synopsis: At the ball, Prince Charming (Obama) makes a pivot stage center, abandons Cinderella (unions) and embraces one of the evil stepsisters (job creators), promising her a commitment of love for the rest of her life. (Audience gasps in shock.) The Prince acknowledges that the stepsister is not evil at all and is not so clingy like the usual girls he dates. (Audience coos in delight.) Meanwhile, a minion at the castle offers Cinderella 20 pieces of gold for her pair of glass slippers, she sells them, and he re-sells them on EBay for 200 pieces of gold, thus starting a business of selling fairytale treasures online and within a year, hires four employees.

  7. Newt says:

    All of you seem to be guzzling the “government-creates-jobs” Kool Aid.

    Have you learned nothing from all the failed green-tech subsidies and make-work projects, including wind power, ethanol, solar, cold fusion, GM unwanted electric cars, toxic light bulbs that don’t light …?

    The most important thing Obama could do is support a favorable and predictable tax and regulatory climate for business, which is the only way to restore employment.

    But there is no way in hell that he will do that. Neither he, nor any of his theoretician advisors, knows what to do. It’s going to stay ugly until we can get some grown-ups in Washington.

    1. Joe Loveland says:

      This “no grownups” bromide always gets chuckles with the gang, but its ironic. Politicians are immature, because we, the folks they represent, are immature. We simultaneously call for “no new taxes” and no cuts in the largest programs and no deficits, and see no contradiction in the three demands. We self-righteously demand politicians “listen to the people,” but then squeal like children when we disagree with the majority opinion (e.g. on not cutting entitlements, taxing the wealthy, prioritizing short-term jobs spending over short-term fiscal contraction, etc.).

      Both the best and worse thing you can say about Washington politicians is that they are very representative of us. And the truth is, they won’t improve until WE improve.

      1. PM. says:

        funny how when we say “grownups”, we really mean people who think like us.

        and that, in itself, is the problem with Washington–there is no interest in bi-partisan problem solving, but rather an emphasis on party line self interest. Newt, of course, is a perfect embodiment of the problem.

  8. Joe Loveland says:

    Columnist/economist Paul Krugman today expressed my sentiment about Obama’s address:

    I find it useful to think in terms of three questions: What should we be doing to create jobs? What will Republicans in Congress agree to? And given that political reality, what should the president propose?

    The answer to the first question is that we should have a lot of job-creating spending on the part of the federal government, largely in the form of much-needed spending to repair and upgrade the nation’s infrastructure.

    Oh, and we need more aid to state and local governments, so that they can stop laying off schoolteachers.

    But what will Republicans agree to? That’s easy: nothing. They will oppose anything Obama proposes, even if it would clearly help the economy — or maybe I should say, especially if it would help the economy, since high unemployment helps them politically.

    This reality makes the third question — what the president should propose — hard to answer, since nothing he proposes will actually happen anytime soon. So I’m personally prepared to cut Obama a lot of slack on the specifics of his proposal, as long as it’s big and bold.

    For what he mostly needs to do now is to change the conversation — to get Washington talking again about jobs and how the government can help create them.

    For the sake of the nation, and especially for millions of unemployed Americans who see little prospect of finding another job, I hope he pulls it off.

    Propose big and bold, knowing that you will lose, but use the loss to shape the conversation.

    1. Well, Joe…you are right and I still agree. There are two things I’ll comment on–
      1) Newt’s non-kool-aid statement that the government doesn’t create jobs. Can we call bullshit on that? Gov’t sets conditions/policies that encourage job creation, besides how many million local, state, and fed gov’t jobs are there, and without military spending how many jobs would disappear. And after 30 years of reduced taxes, how many business sector jobs (especially non-minimum wage ones including benefits) have been created…if any koolaid is being drunk it is that the tax cuts have led to private sector jobs.
      2) Krugman’s line–“since high unemployment helps them (GOP) politically”…that is a cute historical note harkening back to the era of more operational congresses, no voter is confusing this congress and especially the well-established GOP party of no with being representing the best interests of the people. High unemployment will be directly blamed on the GOP even if Obama’s proposal is not ‘big and bold’.

      The GOP has already boxed itself in and will take a major bath in both state and federal elections in 2012. Why, because ‘no’ is not an idea for job growth, and their supporters with all the money refuse to share it by hiring anyone. The GOP has to bring ideas and not just ‘no’ to the table or there is no safe seat for them.

      1. Joe Loveland says:

        No, I disagree with the “government doesn’t create jobs” mantra.

        Look, most jobs at most times should be created by the private sector. But when the private won’t or can’t, the government can do something.

        When government money puts a laid off teacher, fire fighter, cop, scientist, social worker or construction worker back on the job, that is creating jobs, and very productive ones. When government funds a large public work project that has societal merit, that creates a lot of new jobs, in a sector where there aren’t a lot of private sector jobs right now.

        And all of those newly minted employees spend their paychecks in their communities, and that supports private sector jobs.

        Just because you don’t like the source of the job creation or the type of jobs created doesn’t mean no jobs can be created by government. That’s one of the sillier talking points of the day.

      2. Erik Peterson says:

        You’ve over-literalized this to make your case. Yes, governments ‘create’ public sector jobs when teachers are hired.

        The money or assets for that job already existed however. It’s dubious to say that money wouldn’t have created a job had it not been borrowed or taxed. I suppose if you’re going to print money, which we do now, that’s a whole ‘nother ball of wax.

        In any event, last week’s conservative meme du jour was the kaplooey of Solyndra, which was one of those public / private eco partnerships that Democrats love. I’m always on the lookout for the counter explanation, ya know, the narrative that explains an Obama failure as a success, a bug as a feature… I haven’t yet seen a good sycophantic counter narrative take root nationally for Solyndra. That could be taken up here at SRC.

        The point is, people are becoming very skeptical of this nonsense. Rather than winning by losing or losing by winning, Democrats are under some obligation to express why this stuff is supposed to work.

      3. Joe Loveland says:

        Re: The money or assets for that (government) job already existed.

        From CNN Money.

        State and local governments are forecast to shed up to 110,000 jobs in the third quarter, the first time the blood-letting has risen into the triple digits, according to IHS Global Insight.

        “We’re on a downward path,” said Greg Daco, principal U.S. economist at IHS. “It’s not looking good.”

        State and local government employment has been a drag on the economy all year, averaging a loss of 23,000 jobs a month over the past three months. Meanwhile, the private sector has created an average of 180,000 a month during the same period.

        In May, public employment shrunk by 29,000 jobs, mostly at the state and local level, while businesses created 83,000 jobs, the Labor Department reported Friday. All told, the sector has lost 510,000 positions since its peak in August 2008.

        Though tax revenue is starting to rise, states are still wrestling with multi-billion-dollar budget gaps. Federal stimulus funds helped minimize job cuts until now, but that money essentially runs out on June 30.

        So states are planning to slash funds for education, social services and local governments, as well as downsize their payrolls even more, in the coming fiscal year.

        And that’s the good news.

        The bad news is that local governments are in even worse shape. Not only are they losing state aid, but they are finally feeling the fallout from the mortgage meltdown. Property tax assessments, a major funding source for municipalities, have only started to drop.

        Caught in a fiscal bind, local governments will have to reduce personnel expenses since it is the costliest part of their budgets and they’ve already slashed their programs and services.

        “We’re at the tip of the iceberg,” said Christiana McFarland, the National League of Cities’ program director for finance and economic development. Cities “don’t have many options at this point.”

        In other words, these jobs have been cut for lack of available money.

      4. Erik Peterson says:

        Well yeah. It’s got to come from somewhere. It came from tax revenue before, but is presumably being replaced by borrowing. It exists, but you’re just swapping one source for another.

        Do you not get this?

      5. Joe Loveland says:

        You get no argument from me there. Yes, at a time when there is too little to stimulate the economy, I think we should borrow at low interest rates to create jobs and stimulate the economy. Teachers buy stuff and teach kids, and the first things stimulates the short-term economy and the second stimulates the long-term economy. I, and lots of economists, think that’s a very good investment for taxpayers to make.

        Again, teaching is a job, and hiring a laid off teacher is “government creating jobs.” I think the nut of the matter is that you think that teaching and other government functions are frivolous, but the government absolutely has it in it’s power to create all kinds of different types of jobs. There has to be limits on that, but at a time when other types of spending aren’t happening, it makes sense.

        http://minnesota.publicradio.org/display/web/2011/09/02/midday1/

      6. Joe Loveland says:

        P.S. A lot of private sector jobs are created with borrowed money as well. Whether in the public or private sector, the fact that the money for the hire is borrowed doesn’t mean that job creation didn’t happen.

  9. Newt says:

    This is one of the more brilliant political moves by the GOP (letting Obama’s speech stand alone). Less is more. The more he talks, the more he promises, the more he brings attention to himself, the better for the GOP.

    Pelosi Peeved Republicans Opt Out of Rebuttal to Obama Speech

    Published September 07, 2011 | FoxNews.com

    Republicans have decided they’re not going to give a rebuttal to President Obama’s jobs speech later this week, a decision House Democratic Leader Nancy Pelosi took as a high affront to the White House.

    At least three GOP lawmakers also have announced they’re not going to show up for the presidential address. House Speaker John Boehner’s office then confirmed Tuesday evening that nobody from the party would deliver an official televised response.

    Pelosi said the party’s “silence” would “speak volumes about their lack of commitment to creating jobs.”

    “The Republicans’ refusal to respond to the president’s proposal on jobs is not only disrespectful to him, but to the American people,” Pelosi said.

    But Boehner spokesman Mike Steel said Obama’s proposals on Thursday “will rise or fall on their own merits,” suggesting a GOP response was not needed.

    “Republicans are, and have been, entirely focused on job creation. Every member of Congress, and — more importantly — the American people, will provide a reaction to the president’s address,” Steel said.

    Sen. Roy Blunt, R-Mo., said there will be “plenty” of response to the president’s speech on Friday, but told Fox News he suspects the reason there’s no formal response is “the speaker doesn’t expect to hear much to respond to.”

    Some members of Congress, though, won’t be there when Obama delivers his address to a Joint Session of Congress.

    Sen. Jim DeMint, R-S.C., has said he doesn’t think he’ll attend — he told Fox News he’s “sick and tired of speeches.” Rep. Joe Walsh, R-Ill., also said he’d skip, writing on his Twitter page that he has no interest in being a “prop” for Obama’s speech. Rep. Paul Broun, R-Ga., will not attend either, opting instead to hold a Twitter town hall while the president speaks.

    Dana Perino, former press secretary for George W. Bush, said the lawmakers should attend the session because “you’re an elected leader, and it’s quite a privilege to be able to be there.”

    As for a GOP rebuttal, Perino said there is a downside to it in that it always makes the opposition look small in comparison to the president.

    “This is not a State of the Union address, but still tradition would say there should be a rebuttal. I don’t think it’s necessary, the game is starting,” Perino said, referring to the first game of the NFL season, which immediately follows the president’s speech.

    Perino said congressional leaders have opened Statuary Hall in the Capitol to allow any member of Congress to talk to the media.

    Read more: http://www.foxnews.com/politics/2011/09/07/republicans-opt-not-to-give-rebuttal-to-obama-speech-ticking-off-pelosi/#ixzz1XHQzRX9a

  10. Gary Pettis says:

    I have enjoyed reading the posts today about government versus public sector jobs, and whether revenue income (e,g, taxes, fees, sales), loans and a combination thereof can start the machinery that pushes new job creation. It’s a heady discussion and perhaps there isn’t enough time in the day and enough gray matter between the ears of everyone to grasp the facts and street realities equally.

    Still, one thing that most people are smart enough to pick up on equally is when someone is being disingenuous or not. If he at all follows Loveland’s’ “Obama must lose to win later” strategy, the President may appear to be not very candid or sincere Thursday night. Things in the economy may be far worse than Obama is revealing all the same while, he pretends that a bit more Government stimulation money may save–not create jobs–and says things like the economy and the jobs situation will get better around the bend because that’s the type of optimism people running for public office are suppose to deliver.

    I cannot take any credit for this current school of thought. Check out these two opinion pieces from yesterday, from the New York Times and Rolling Stone, left-leaning publications.

    The Whole Truth and Nothing But
    By THOMAS L. FRIEDMAN
    nytimes.com
    September 6, 2011

    Obama and Jobs: Why I Don’t Believe Him Anymore
    Matt Taibbi
    Taibblog
    rollingstone.com
    September 6, 2011

    http://www.rollingstone.com/politics/blogs/taibblog/obama-and-jobs-why-i-dont-believe-him-anymore-20110906

    1. Joe Loveland says:

      Re: “the President may not appear very candid or sincere” if he proposes a jobs policy that he knows Republicans won’t support

      Gary, for days now we have not been close to being on the same wavelength here. I’m not saying Obama should propose something so preposterous that he must lose. I’m saying that since the Republicans are going to defeat anything he proposes, he should propose what he believes is truly the right policy, and not pre-water it down to try to win over congressional bomb throwers. Obama should propose what he thinks is right and defend it to the hilt, not propose a round of Let’s Make a Deal with bomb throwers who have no interest whatsoever in any deals.

      If Obama proposes what he really feels is right, he should look much MORE “candid and sincere” than if he holds his nose and agrees to far right claptrap.

      1. Newt says:

        A $300 billion stimulus proposal passes the straight face test? If that’s candid and sincere, I’ve got some ocean front in Pipestone to sell you.

      2. Gary Pettis says:

        Joe,

        It’s my feeling that Obama really believes everything he proposes is right. Nothing has been or will be watered down. For the integrity of his time in office and for the well-being of the United States, he has to be able to show true leadership to improve the nation’s job situation, if possible, considering the number of days left in his first and perhaps last term.

        If I understand your original premise correctly, only a true ideologue would go to the mat for what he or she thinks is right and would put in a fight of a lifetime for an idea/proposal, knowing that the consequence is losing a couple of rounds, but bucking the odds to still come out on top with a knockout or the higher number of votes from the judges.

        Frankly, this country’s job situation requires strong, pragmatic, flexible leadership from the President. As the man with the Bully Pulpit, he seems unwilling to bend from his core ideology and unwilling to take major risks that will go against the beliefs of his core base.

        For instance, I heard a few good job-creation ideas during last night’s debate that sounded pretty good, and I am sure they resonated with more than a view viewers. A bold leader would say he listened to the ideas from the debate and is willing to include some of them now in his proposal.

        Joe, if you read the sentence above and reacted with rolled eyes and a thought of “that’s nutty” or “that’s impossible because they are Republicans,” you’re romancing the ideology and losing sight of the importance of leadership.

        Cheer Obama on as he takes his American Jobs Act ideas, all or a few of them, to the mat and loses, but the fact remains, his ideology will continue to be the Achilles heel of his presidency while his ability to be an effective, sound leader will increasingly be called into question.

        That’s the real issue. Going down in the burning ship of someone’s unshakable ideas and beliefs does not garner the level of admiration or legend making that it once did. I trust the American public to recognize a good leader when it sees one, which also has its “candid” and “sincere” radar on at full power.

        Personally, I don’t want to follow leaders who are so inflexible that they are willing to put themselves in losing situations to make a point because in the end, everyone under the leadership loses, especially, in this here and now, those who are looking for a job but can’t find one.

        Still, Joe and I, we remain oceans apart, alas with a few burning ships between us, doomed by their inability to take swift, bold and corrective action to save crew and treasure.

        All My Best, GP

  11. Joe Loveland says:

    Rick Perry once again again made his “government can’t create jobs” assertion last night.

    The only thing that confuses me is that there have been 287,400 government jobs created in Texas in Perry’s time, and under Perry the rate of growh in Texas’s public sector was twice the rate of growth in Texas’s private sector.

    If government didn’t create those government jobs, who was it. Jerry Jones? T. Boone Pickens?

    1. Gary Pettis says:

      Jeez Joe, we’re in a state of constantly splitting hairs. State governments can hire employees who can perform work at the discretion of of state government if there is budget for these hires. It’s like it comes as a surprise that government is an employer.

      If any government is operating in a deficit and is increasing its employee payroll, well, “Houston, we got a problem.”

      Increased revenue on the state and federal levels credited to the lowering of the 9.1 percent of unemployment to say four or five percent will put more money in the coffers where the whole government hiring issue becomes moot. That’s the end goal and why government must create a more pro-business environment.

      The question of can government impact the creation of non-government jobs through stimulus spending or programs is an entirely different matter. The answer to that question is no.

      Tonight the president is going to announce that X number of dollars will be spent on infrastructure projects to put idle construction workers to work with the hope that their salaries will trickle down to helping the communities where the construction workers work and reside.

      So, if that’s the case, how many jobs will be created thanks to the new stimulus infrastructure spending specifically, exactly, measurably?

      Don’t hold your breath waiting for an answer and those numbers because the answer and the numbers will be embarrassingly disappointing.

      Sidebar: Governor Perry did use $17.4 billion in federal stimulus money to balance Texas’ state budget. Meanwhile, Texas has a rainy day fund of $9.4 billion for the 2012 to 2013 budget. Question: Was the federal government not wise in giving a state with a rainy day fund stimulus money? It’s like giving some banks TARP money while they said, “Thank you, we’ll take it but we have plenty in our vaults.”

      1. Jim Leinfelder says:

        “For instance, I heard a few good job-creation ideas during last night’s debate that sounded pretty good, and I am sure they resonated with more than a view viewers. A bold leader would say he listened to the ideas from the debate and is willing to include some of them now in his proposal.”

        It would have been more persuasive had you listed these “few good job-creation ideas” and why you’re persuaded of their efficacy, Gary.

      2. Gary Pettis says:

        I can imagine Jim whet you think of Michelle Bachman, but during last night’s debate she did say, “Energy is one of the greatest opportunities for job creation that we have in the United States. We just learned today that if the federal government would pull back on all of the regulatory restrictions on American energy production, we could see 1.2 million jobs created in the United States.”

        Now if what she said is even remotely true, there is an opportunity to create jobs drilling, mining and producing energy from our own resources.

        During the president’s speech tonight, I don’t think that he mentioned once the topic of creating energy production and exploration jobs, nor did he say anything about America’s dependance on foreign oil.

        I am sure you will agree that if we’re in a job crisis, utilizing our own energy resources, which will ruffle the feathers of environmentalists. But there is an opportunity there to put people to work quickly on energy not Green jobs.

        I’ve not read the transcripts to the president’s speech, but I give him credit for taking a few risks and sounding a little bit more Republican than his base was comfortable hearing.

      3. Joe Loveland says:

        Gary, yes it was a great idea of the federal government to create jobs in Texas. But it is the height of hypocrisy for the Texas Governor who reaped the benefits of this goverment job creation to then say “government can’t create jobs.”

      4. Jim Leinfelder says:

        I see, Gary, so, now, when pressed, you’re amending your claim of hearing “a few good job-creation ideas during last night’s debate that sounded pretty good” and that you’re “sure…resonated with more than a few viewers” to hearing one vague claim from candidate Bachmann that not even you are confident has any validity.

  12. Gary Pettis says:

    The stimulus money in Texas went to round out the state’s budget while the state’s rainy day fund remained in a bank earning interest. Who’s the fox and who’s the hen in this deal?

    I know you’re not a Perry fan, so during the upcoming primary season, your support will not be counted on. Nonetheless, let’s see how Perry does explaining why he took the stimulus money and later echos like all Republican presidential candidates “government can’t create jobs.”

    But let’s get back to the bigger picture of government dolling out money with the hope of reducing the percentage of the unemployed as revealed in the American Jobs Act.

    7 Ugly Truths About Obama’s $787B Stimulus
    When the numbers aren’t fuzzy, they’re just not good
    Aug 31, 2011, 4:55 am EDT

    Thanks to the Stimulus program, “Cost Per Job Between $196,750 and $562,000: Like I said, the jobs numbers are slippery. But if you take the $787 billion price tag and divide by CBO estimates of 1.4 million to 4 million “full-time equivalent” jobs created as a result of the stimulus measure, per-job costs range between these two six-figure sums.”

    http://www.investorplace.com/2011/08/ugly-truths-obama-stimulus-jobs-economy/

    Shovel-Ready, Take II: Would Obama Infrastructure Plan Create Jobs Now?
    ABC News Political Punch
    Devin Dwyer
    Sep 8, 2011

    “It’s not good stimulus,” said Alice Rivlin, a Democratic member of the president’s Debt Commission and former head of the Office of Management and Budget.

    “It doesn’t come online fast enough. If you’re really talking about things that will create jobs quickly, you need to rely on either direct government hiring in the manner of things done in the Great Depression, or demand-side things that will get more money spent by wage earners,” she said.

    http://www.investorplace.com/2011/08/ugly-truths-obama-stimulus-jobs-economy/

  13. Gary Pettis says:

    Jim, if jobs could be created by tapping into the U.S. domestic energy resources, how much give and take would you be willing to offer to add these type of jobs into the “job creation hopper?”

    If we indeed are in a jobs and economic crisis, shouldn’t we be able to responsibly pull out all of the stops to end the crisis?

    I am confident the numbers put out by the U.S. Chamber of Commerce are valid, and if you disagree, please let me know. See below. (And if you want me to dig up more stuff to re-enforce validity, please let me know. I’d be happy to oblige.

    U.S. Chamber of Commerce Open Letter to Congress and the President of the United States

    Date: September 5, 2011

    Section 2. Produce More American Energy

    Let American energy workers and businesses responsibly develop all sources of domestic energy immediately. This will not only create jobs but will generate new government revenues, protect our energy security, and release us from the grip of some unfriendly governments.

    *Open offshore resources
    Almost 190,000 new jobs could be created by 2013 if permitting in the Gulf of Mexico for offshore development returned to pre-moratorium levels. In Alaska, opening up energy production off the coast would create 54,700 jobs.

    *Expand accession federal lands.
    By expanding oil and gas exploration on federal lands, we could create 530,000 jobs, reduce imports by 44% by 2025, and increase government revenues by $206 billion.

    *Promote development of natural gas.
    Expanding the development of the nation’s massive shale gas deposits would create hundreds of thousands of jobs and help bring manufacturing back to the United States, especially in the chemicals and steel industries. By 2020, natural gas production in Western Pennsylvania alone could create 116,000 new jobs, generate more than $2 billion in government revenues, and add $20 billion to the region’s economy.

    *Approve the Keystone XL pipeline.
    Construction of the Keystone XL oil pipeline connecting Canada to U.S. refineries in Texas would support 250,000 jobs, boost investment in the United States by $20 billion, and generate government revenues totaling $585 million.

  14. PM. says:

    The idiocy of Republican economic policy–courtesy of David Frum:

    ( http://www.frumforum.com/the-gops-bernanke-letter )

    I’m not shocked by much any more, but I am shocked by this: the leaders of one of the great parties in Congress calling on the Federal Reserve to tighten money in the throes of the most prolonged downturn since the Great Depression.

    One line in the letter caught my eye as summing up the unreality of the Republican leaders’ position:

    We have serious concerns that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy. Such steps may erode the already weakened U.S. dollar or promote more borrowing by overleveraged consumers.

    Are they serious? We are living through the most rapid deleveraging of the American consumer since the 1930s. Much of that deleveraging is occurring tragically, through the process of bankruptcy and foreclosure. Some is happening more happily, through the increase in the savings rate from the 0 of the housing boom to about 6% now.

    Even if consumers wanted to borrow, credit is just not very available to the typical person right now. Some credit, for example on credit cards, is not cheap. In fact, the average APR on credit cards is scraping a record peak: 14.96%.

    As anxious as investors are about US personal debt however, they are blithe to nonchalance about the US public debt. Interest on that debt has sunk to record lows: under 2%.

    The markets see deflation and depression, not inflation. Yet ironically this non-existent and much dreaded inflation is exactly the remedy we need to lighten the load of consumer debt.

    As is, we’re looking at a continued economic slump, more unemployment, and more deleveraging via continuing catastrophic consumer default on mortgages, car loans, credit cards, and student aid. And now the GOP leadership is urging that the Federal Reserve make the catastrophe worse? To what end?

    I know what the detractors will say: to the end of defeating President Obama and replacing him with a Republican president. And if you’ve convinced yourself that Obama is the Second Coming of Malcolm X, Trotsky, and the all-conquering Caliph Omar all in one, then perhaps capsizing the US economy and plunging your fellow-citizens deeper into misery will seem a price worth paying to rid the country of him.

    But on any realistic assessment of the problems faced by Americans – and not just would-be Republican office-holders – it’s the recession, not the presidency, that is National Problem #1 and demands the most urgent action. It won’t be enough to save Obama if he does not deserve saving – but it may be enough to save your neighbor’s house, job, and family. Or even … your own. Republicans after all have been victims of this crisis too. It’s an hour of national emergency even more urgent and overwhelming than the aftermath of 9/11. And things may soon get worse, if the Eurozone begins to crack up, as it seems it may. This is the hour for united action against the economic crisis, not partisan maneuvering.

    1. Mike Kennedy says:

      I agree, surprisingly, with the article. Certainly not a time to tighten money — no doubt, almost as idiotic as raising anyone’s taxes in a stalled economy. Raising taxes and raising interest rates takes money out of the economy….idiotic.

      1. PM. says:

        I don’t think it is all that surprising, Mike–while there are plenty of things that we disagree on, I don’t think you are a knee jerk party line follower. You are too much of a curmudgeon for that!
        😉

  15. Newt says:

    Why are liberals so inclined to believe that government holds the key to economic prosperity? Can anyone point to any example in the world where this point is proven?

    1. Jim Leinfelder says:

      Um, I think many people feel that it has a role to play, not that is the only factor. You, on the other hand, Newt, absolutist thinker that you are, are convinced that it is THE ONLY impediment to economic prosperity, that “rolling back regulations” and taxes is the single key to economic revitalization.

      How’s China doing, Newt?

  16. Newt says:

    And before I could finish my post, this headline comes out …

    NEW YORK – Stocks have plunged after the Federal Reserve said it would buy long-term bonds to help the economy. Investors were expecting the Fed’s move, but they doubted that it would have much of an impact.

Comments are closed.