Friday, September 16, 2011

Holding the Economy Hostage

Holding the economy hostage. Those words usually come from liberal commentators maligning evil capitalists, who we've been told are sitting on piles of cash they refuse to invest to get the economy going because they want Obama to fail, are racists, haters, etc. In the case of House Republicans the words come from Obama himself, portraying their refusal to pass his bills as hostage-taking. But assuming the economy is being held hostage, who's really doing it?

Talk to the average Democrat and they'll admit the Stimulus failed--but only because it wasn't large enough. Obama is now proposing Stimulus Part Deux, Stimulus Junior, call it whatever, which is half the size of the first one. In order to save the economy we have to pass this new bill, and pass it now! But why would even a Democrat assume it would work at half the size?

Talk to the average Republican and maybe they'll admit to being somewhat happy that Stim I failed because its success would have been a huge affirmation for Keynesian economic theory. They would suggest we try the other approach, one more similar to Warren Harding's reaction to the forgotten depression of the early 20s.

But Obama can't. He simply cannot throw out Keynes and redistribution and all the tenets of his liberal faith.

So instead of actually saying, "well, we tried this and it didn't work, let's take a suggestion from those guys and see it their idea works, because after all, it's about jobs, jobs, jobs and I am always open to suggestions from the other side", he's left to double down on Keynes and try a shorter version basically designed to punish his enemies. As Tina Korbe at Hot Air notes, this approach leaves him with three political hammers to hit Boehner and the candidates with come 2012. It's all about his job, job, job.

So who's actually holding the economy hostage? The head-scratcher to political pragmatists like Carville and Clinton is why Obama doesn't take the GOP up on their offer. If Obama came out today and said he was going to work with the GOP to try their way how would people react?

Perhaps he couldn't get any such bills past a Democratic Senate, but would they want to be the ones holding everything up? If he did, and the economy improved next year, he might be re-elected in a landslide. Most of the moderates/independents who voted for him DID NOT vote for Keynes, or Ayers, Marx, or Eurosocialism, they voted for an amorphous 'change' that was largely seen as 'anyone but Bush'. Most of those same folks would probably approve of moving in a new direction and laud his leadership. Of course, if things didn't improve Obama would be left with "we tried their way", etc, which could nullify the platform of every one of his contenders.

It seems pretty basic, but therein lies the conundrum--Obama is a true believer. When he said he wanted 'change' it wasn't what the moderate/indies thought, it was likely something more radical. Affirming a Hayek-Freidman-God forbid Bush approach to the economy would probably be the worst thing imaginable and certainly not something worth risking to fix the economy. So we're all captive.


Debbie said...

TARP, the first stimulus, was actually done under Bush. Sadly, Bush (wanting to be a nice guy, make things easier for the man following him, and probably not wanting to look racist etc.) basically turned the oval office over to Obama after the November election, before Obama was inaugurated. We are still paying for that mistake.

Right Truth

A.C. McCloud said...

The difference is that TARP was a loan program that has largely been repaid by the banks, while Stimulus I, and the Omnibus were payoffs to constituencies that our children will be paying off.