Sunday, June 10, 2012
10% Never Get It
Politics is frequently a game, and a stupid game at that. Politicians are human; sometimes they choose poor phrasing. When they do, opponents can be counted upon to exploit them and the media can be counted upon to dwell on them. But good politicians understand this fact and act accordingly. The best politicians figure out a way to avoid making those statements, even as they speak candidly and in a mature way to the American public.President Obama is not the most adept at avoiding making stupid statements. There is a huge list of them, from 57 states to the Austrian language. What he had enjoyed was getting full omerta from the left leaning media every time he uttered something stupid. I'm talking full John Edwards like ignoring--no coverage whatsoever. But that seems to be ending, largely because of the precipitous, self-imposed decline of the left leaning media while the net and new social media rise and rise. But let's get to the meat of Mr. Cohn's piece.
Obama is usually among the most adept at doing that. Today he was not.
So let's look at what Obama actually said, in full context:The last Obama sentence quoted is not a sentence but a subject and dangling clause, alas, never to be united with a verb to make a sentence. But beyond the quibbles of grammar, the analysis, broad or narrow, is wholly incorrect. The private sector suffered a huge hit and is not recovering. The "steady" pace of new jobs is wholly inadequate for recovery. It doesn't even cover our population growth, as college grads are learning to their chagrin. And lately it's been bad; last report was 69,000 new jobs in May. Doing fine indeed.
The private sector is doing fine. Where we're seeing weaknesses in our economy have to do with state and local government. Oftentimes cuts initiated by, you know, Governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don't have the same kind of flexibility as the federal government in dealing with fewer revenues coming in.
Broadly speaking, the analysis is correct. The private sector has been creating jobs at a steady pace, but the public sector has been shedding them, slowing growth. And there is no reason why that has to happen. Stabilizing the public sector workforce or, better still, increasing it would be among the very easiest things for the federal government to do: It can simply write checks to state and local government, as it did with the Recovery Act and has traditionally done during times of economic distress.
The compression of the public sector, to the extent it exists, is a wholly good thing, would that it spread to the federal government. The slightly downsized state or local government is having little effect on economic growth, it's certainly not slowing private growth. Then comes the long telegraphed punch, fully expected from a lefty like Cohn, who says: We need to have the Federal government, borrowing 40 cents of ever dollar it spends, "simply write checks to state and local governments" to expand their workforce. I'm not kidding. Cohn seems unaware of the votes in Wisconsin, San Diego and San Jose. He certainly has no finger on the pulse of the middle class, who support smaller government by a good margin.
The lefty model is to 'ensure' growth by taking ever increasing amounts of money from wage and profit earners so they necessarily have less money to spend to goose the general economy, and giving it to an inefficient and sometimes incompetent government generally to spend on things that do not goose the general economy and at worst, to squander and to waste, sometimes on benefits to non-wage or profit earners. That, in Republican eyes, is a wet blanket on the economy, generally impeding economic growth.
The Republican plan, of which Mr. Cohn feigns complete ignorance, is to cut government spending so that it (eventually) equals government income and to lower individual tax rates so that citizens have more of their own money to spend and goose the economy and to lower corporate tax rates to cut free the lead weights that second sweep from citizens' pockets imposes on our corporations competing globally. (Lefties don't get this--Corporations don't pay taxes, they collect them from real individuals. You never can 'punish' corporations with higher taxes as the tax is necessarily passed on to the consumers of the corporations' goods or services). This is not a secret, but there is a certain percentage of the population that you cannot educate.
Lowering the amount of money the government collects from citizens will boost the economy generally--it always does--and sometimes that boost leads to more tax revenue than would have been collected under the old rates. But it's not revenue that is the major problem, although in any recession and slow recovery less revenue is a problem. Less revenue is dwarfed, however, by the incredible rate of spending. Only less spending (and thus less borrowing) will stop the ticking time bomb cumulative debt over 100% of GDP is to any nation which reaches that high plateau. And we reached it under President Obama and nearly 1/3 because of President Obama and a like minded Democrat dominated Congress.
Cohn is fully for putting construction workers back to work on public projects of infrastructure. Did he miss the two year period when the Democrats had substantially more Senators and Congressmen than the Republicans? Did he miss the near Trillion in so-called stimulus which was pitched as infrastructure building "shovel ready" projects (about which President Obama now jokes there were none) but instead went largely to, well, state and local governments to overpay the public sector. That stimulus was a complete waste of money as far as goosing the economy, even using the Administration's own masking metrics regarding the unemployment rate. Because the left always thinks the failure of its fiscal and tax policies occurred because the spending was too small (and never because the fiscal and tax policies they propose are just wrong), Mr. Cohn and the Democrats have been trying to get another stimulus ever since. The left savages the right for opposing more government spending. It's traitorous the dim bulbs on the left say. Fortunately, the now Republican dominated House of Representative is not going to pass another stimulus package of any size because it's the wrong way to go. It will achieve nothing vis a vis the general economy and it will increase the debt, hugely.
We need less government spending, not more, and a growing majority knows it. But there are some, Mr. Cohn included, who will never see it, never get it.