Sunday, August 5, 2012

“If you agree with the approach I just described, if you want to give the policies of the last decade another try, then you should vote for Mr. Romney,” Obama declared in his June 14 speech in Cleveland.Romney hasn’t helped matters. When asked by NBC’s Brian Williams to explain how his plan differs from Bush’s policies, Romney offered up familiar talking points that could have come from Bush himself. Now, I agree with those points — exploit domestic energy, promote trade, keep taxes low, etc. And you could easily find banal throwaway lines from Obama that at least make it sound like he does, too.
But Obama has the distinct advantage of being branded as the anti-Bush candidate in the race.
Romney needs to explain to voters why he’s not Bush 2.0. Republican politics have been off-kilter for several years now because a large segment of the conservative base does not look back fondly on the Bush presidency. The mainstream media’s various narratives about the Tea Party ignore a vastly more significant and powerful motivation than the various bigotries and conspiracy theories typically ascribed to them. The Tea Party feels the GOP under Bush’s “compassionate conservatism” gave up the store to big government.
Can we finally all agree that Keynesian economics is a flop? The politicians in Washington flushed about $800 billion down the toilet and we got nothing in exchange except for anemic growth and lots of people out of work.
Indeed, we’re getting to the point where the monthly employment reports from the Labor Departmentt must be akin to Chinese water torture for the Obama administration. Even when the unemployment rate falls, it gives critics an opportunity to show how bad the economy is doing compared to what the White House said would happen if the so-called stimulus was enacted.
But for the past few months, the joblessness rate has been rising, making the chart look even worse.
Three years after our worst recession since the Great Depression officially ended, the U.S. economy is still very weak. The people most hurt by this weakness are the unemployed and the poor, and of course the two problems are related. We have 23 million people who are unemployed, involuntarily working part-time, or given up looking for work — nearly 15 percent of the labor force. And poverty has reached 15.1 percent of the population — amazingly, a level that it was at in the mid-1960s. The first priority of the U.S. government should therefore be restoring full employment. This is a relatively easy thing to do. As Nobel laureate economist Paul Krugman aptly put it: "It's like having a dead battery in a car, and while there may be a lot wrong with the car, you can get the car going remarkably easily, if you're willing to accept that's what the problem really is."
Most economists are well aware of what the problem really is, since it is so simple and basic. The economy lost about $1.3 trillion in private annual spending when the real estate bubble burst in 2007, and much of that has not recovered. State and local governments continue to tighten their budgets and lay off workers.
If the federal government had simply funded these governments' shortfalls, we would have an additional 2 million jobs today.

1 comment:

Baxter said...

Keynes reputation has been bolstered by the last four years. The stimulus package did work, but should have been larger. It should have been more spending, less tax cuts.

Electing Romney will effectively give Bush a third term. All of his policies and most of his advisers come straight from GWB.