Barack Obama simply refuses to take responsibility for a weak, jobless economy that’s persisted longer than it should have because of his impotent policies over the past three-plus years.
With his latest big-spending stimulus plan dismissed by Congress, President Obama is back on the campaign trail with the same politically threadbare appeal he’s used throughout his presidency: We can’t return to the policies of the past “that got us into this mess in the first place.”
That’s the worn-out line he tried out Thursday in yet another economic “reframing” address in Cleveland. It was his response to Mitt Romney’s stepped-up assault on a failed multiyear record that economists say has given us the weakest recovery since the Great Depression.
With the economy sharply slowing down to a mediocre 1.9 percent growth rate, new job creation falling perilously in April and May, and wages virtually flat for three months, Mr. Obama’s bid for a second term is in deep trouble.
“The president’s team indicated that if we passed their stimulus of $787 billion, borrowed, that they’d hold unemployment below 8 percent. We’ve gone 40 straight months with unemployment above 8 percent,” Mr. Romney said Wednesday in a talk before the Business Roundtable, an influential trade group here in Washington.
“If you look at his record over the last three-and-a-half years, you will conclude, as I have, that it is the most anti-investment, anti-business, anti-jobs series of policies in modern American history,” Mr. Romney added.
Democrats on Capitol Hill, fearing a weakened president could drag down some of their most endangered candidates, want him to change his message from blaming George W. Bush to laying out a strategy to get the U.S. economy up and running again at full strength.
But Mr. Obama is sticking to his repeated warning that his Republican rival’s low-tax and reduced-spending policies are no different than Mr. Bush’s policies, which he blames for all of the country’s present economic woes.
Let’s examine that argument for a moment, because it doesn’t stand up to even cursory scrutiny.
Mr. Obama’s central policy offensive over the course of his term has been to kill the Bush tax cuts, including those on upper-income people, small businesses, investors, capital gains and dividends. These policies, he says, are part of the previous administration’s mess that he claims he has been trying to clean up.
But the unspoken reality is that the Bush tax cuts have been the central economic policy throughout the past four years of the Obama presidency. In fact, it can be argued that Mr. Bush’s lower, across-the-board tax rates that affect every income bracket have helped the economy weather the storm of the subprime mortgage scandal and the recession that it spawned.
Moreover, as much as Mr. Obama has raged against the Bush tax cuts, he agreed at the end of 2010 to extend them for another two years amid signs the economy - in spite of all his efforts - remained dangerously weak. Many Democrats supported him in that decision.
Now Mr. Obama is campaigning for a second term on the proposition that we must end the tax cuts he’s extended over the course of his presidency.
Those temporary tax cuts are due to expire at the end of this year. But not everybody in Mr. Obama’s party is happy at that prospect.
Former President Clinton urged last week that the tax rates be extended because of the economy’s weakness. He was slapped down by the White House for his proposal, but the economic problems he pointed to are not going away.
Retail sales fell in the last two months as consumers cut back on spending. New manufacturing orders have fallen in the past couple of months as well, while worker productivity is declining, a sign that businesses have too many workers in the face of declining demand.
Mark Zandi, the major news media’s go-to-economist at Moody’s Analytics, says it is critical that the tax increases be delayed while the economy is showing further signs of distress. “I don’t think we want to have a fiscal headwind in our face going into 2013,” he says.
Others are forecasting even more frightening prospects in the months to come. “The U.S. economy is drifting toward recession,” says University of Maryland business school economist Peter Morici.
Meantime, Mr. Obama made clear last week that he doesn’t have any understanding of the economy’s dire situation when he told a news conference, “The private sector is doing fine.”
Nor does he acknowledge the key role his own remedial policies have played in extending what should have been a two-year recession into a likely four-year recession that could last several more years if he’s re-elected to a second term.
In a $15 trillion economy, he is proposing that we spend billions of dollars more to build roads and bridges and give more money to the states to meet their payrolls (especially in battleground states, which he needs to win a second term). It didn’t work before. It’s not going to work now.
What will work is an economy-wide policy of lower taxes to make the United States a place where businesses will want to invest again, applying the brakes on spending; boosting energy production here at home, including the Canadian Keystone XL oil pipeline; reducing job-killing regulations, and repealing Obamacare.
Raising taxes now, as Mr. Obama wants, would discourage the capital investment needed to build businesses that will put Americans back to work and open up opportunities for generations to come.
Mr. Romney is correct when he says, “this election is a watershed election, which will determine the relationship between citizen and enterprise and government.”
The stakes couldn’t be greater. It’s a choice between more spending, bigger government and higher taxes, or stronger economic growth, plentiful jobs and a more prosperous future.
Donald Lambro is a syndicated columnist and former chief political correspondent for The Washington Times.