When a candidate offers platitudes on the stump and avoids specifics, most people consider it smart politics — keeping options open and offending few. When a President continues to offer the same platitudes after more than five months in office and in the middle of a deepening economic crisis, it becomes clear that the Oval Office has nothing but platitudes to offer. In practically a rerun of yesterday’s weekly radio address, Barack Obama wastes space in the Washington Post by offering a campaign speech and a cheerleader rally for a failed stimulus bill:
The American Recovery and Reinvestment Act was not expected to restore the economy to full health on its own but to provide the boost necessary to stop the free fall. So far, it has done that. It was, from the start, a two-year program, and it will steadily save and create jobs as it ramps up over this summer and fall. We must let it work the way it’s supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity.
I am confident that the United States of America will weather this economic storm. But once we clear away the wreckage, the real question is what we will build in its place. Even as we rescue this economy from a full-blown crisis, I have insisted that we must rebuild it better than before. For if we do not seize this moment to confront the weaknesses that have plagued our economy for decades, we will consign ourselves and our children to future crises, sluggish growth, or both.
There are some who say we must wait to meet our greatest challenges. They favor an incremental approach or believe that doing nothing is somehow an answer. But that is exactly the thinking that led us to this predicament. Ignoring big challenges and deferring tough decisions is what Washington has done for decades, and it’s exactly what I sought to change by running for president.
Now is the time to build a firmer, stronger foundation for growth that not only will withstand future economic storms but that helps us thrive and compete in a global economy. To build that foundation, we must lower the health-care costs that are driving us into debt, create the jobs of the future within our borders, give our workers the skills and training they need to compete for those jobs, and make the tough choices necessary to bring down our deficit in the long run.
First, let’s correct the record — again — about the ARRA and its intent. Obama and his economic council explicitly sold Porkulus as a means to prevent short-term escalation of unemployment, not long-term rises in joblessness. Christine Romer’s analysis showed that unemployment would return on its own to somewhere between 5-6% in four years with or without the stimulus spending. They wanted to “create or save” 4 million jobs by the end of 2010, but their chart showed clearly that the big impact would happen in 2009. The difference between the dark blue line and the light blue line promised that Obama’s $800 billion stimulus package would have an immediate impact on joblessness.
Unfortunately, as Geoff at Innocent Bystanders shows in his adaptation to Romer’s chart, Porkulus didn’t do anything to stabilize the economy or provide job growth:
Note too that Obama has quietly dropped the promise to “save or create at least 3 million jobs by the end of 2010,” as Romer’s support of Porkulus claimed. Nowhere in this essay does Obama put a number on jobs. Suddenly, Porkulus has stopped being a jobs project — the entire basis on which Obama pushed Congress to pass it — and has become instead a foundational, long-term rebuilding of the American economy. How exactly does Obama make that claim? After all, the bill mostly funded a hodgepodge of supposedly “shovel-ready project” such as normal road construction, although much of that has gone into self-promotional road signs intended to show off Obama’s neat-o Recovery.gov logo and act as roadside campaign advertisements for his reelection — and at a hefty cost.
When given the opportunity to explain his new foundation for America’s economy, though, Obama falls back into campaign mode and says almost nothing beyond a couple of slogans. He talks about revamping the health-care industry, which some would agree would be foundational, but never once mentions the word Medicare. The biggest problem facing the American economy is the entitlement disasters of Medicare and Social Security, two problems that need much more attention from the government than private-sector health care, and Obama refuses to even mention either.
What other “foundational” changes does Obama offer in his op-ed column? Reforming community colleges and leading the world in college degrees by 2020. That’s it. Literally. Obama really puts himself out on a limb and takes this opportunity to reach a national audience by explaining that education is really, really good. I suspect a statement about apple pie may yet be forthcoming.
Either Obama has no idea how to “rebuild” the American economy, or his ideas are so bad that he has to hide them in embarrassingly elementary platitudes. I’m not sure which is worse.
Update: Keith Hennessey also responds:
This did not have to be a two-year program. Congress could have front-loaded the stimulus had they instead given the cash directly to the American people, as they did on a bipartisan basis in early 2008. We would have saved much of it, paying off our mortgages, student loans, and credit cards (which would not be a bad thing). We would have spent the rest much more quickly than the federal and state government bureaucracies now stumbling through their usual corrupt, slow and inefficient processes. Instead the President handed the money and program design over to a Congress of his own party, who saw it as a big honey pot rather than as an exercise in macroeconomic fiscal policy. The President’s primary macroeconomic policy mistake was allowing Congress to pervert a rapid Keynesian stimulus into a slow-spending interest-based binge.
The President is correct that the stimulus will increase economic growth, mostly next year. That is too late, and later than it could have been had they done it right.
Be sure to read it all.