Short-term Obamanomics vs Long-term Romneynomics
posted at 12:14 pm on July 7, 2012 by Karl
This is largely how Juicebox mafia capo Ezra Klein sees the difference between the presumptive nominees’ economic plans:
In his news conference, Romney emphasized four ideas in his plan: expanding domestic energy production, working out trade agreements with Latin America, cracking down on China and cutting the corporate tax rate. These are all reasonable ideas. But working out trade agreements takes a long time. Getting the Keystone oil pipeline up and running takes a long time. Rewriting and implementing a new corporate tax code takes a long time. Changing China’s policies takes a long time. It’s difficult to see how any of these ideas creates a substantial number of jobs quickly.
Obama also tends to emphasize four parts of his plan: increasing infrastructure investment, hiring more state and local workers, doubling the size of the payroll tax cut and adding a new set of tax cuts for small businesses and companies that hire new employees. Two of those policies imply directly hiring hundreds of thousands of workers. The other two move money into the economy immediately. It’s easier to see how these policies lead to more jobs and demand in the short term.
Klein generally argues for Obama’s approach on the grounds that: (1) Obama’s plan is specific, while Romney’s has not; and (2) Obama’s plans would boost job creation now, while Romney’s would not. You will be as shocked a Capt. Renault to discover Klein is not entirely correct about either point.
Klein is correct that Obama has proposed some $450 billion in tax hikes on the productive sectors of the economy. However, as Klein should know, those are recommendations to the so-called “super-committee,” because Obama really does not care whether they happen. Moreover, self-professed policy wonk Klein must know that Obama’s overall plans are not “paid for” even in the medium term.
As for Romney, I have freely acknowledged that Romney’s lengthy economic plan is more a plan to have a plan than a plan. However, Klein is aware of said plan. Moreover, Klein has written that Romney’s plan is similar to those of Rep. Paul Ryan, whose detailed budget has been passed twice by the House GOP. Presumably, a federal budget is more than sufficiently detailed for the average swing voter; it is certainly sufficiently detailed for Team Obama to have attacked Romney over it, a practice almost certain to escalate as November draws closer.
Klein’s second defense is more puzzling. Team Obama is still flogging a “vision for an economy built to last, one that creates the jobs of the future and makes things that the rest of the world buys.” This seems at odds with Klein’s cheerleading for short-term thinking. Then again, Obama’s own proposals seem at odds with Obama’s stated vision, so I do not blame Klein on this point.
Moreover, it is difficult to see how increasing infrastructure investment even creates jobs now. After all, Obama and the Democrat Congress 2009 tried it in 2009. Mind you, at the time, Ace (a blogger who affectionately refers to his readership as “morons”) had figured out that there’s no such thing as “shovel-ready” infrastructure projects. Although Obama would later joke about this, it appears that he and Klein have again drunk deep of the Keynesian Kool-Aid. Economists (for whatever their projections are worth in the era of “unedxpectedly”) do not project all that many jobs being created for that $450 billion price tag, which may explain Senate Democrats’ lack of enthusiasm for Obama’s plan. If you want to argue that Obama’s plan would create jobs now, you might want to be able to show his own party is interested in passing it. It appears that even high-ranking elected Democrats have tired of Obama’s myopic vision for the American economy, even if pundits like Klein have not.