The Penultimate Day of a Dreary Eight Years

Today is President Barack Obama’s last full day in office, and it’s been a long wait. We were loudly grousing about the man back when he was first elected on a waft of hope that he was some sort of messiah, we groused again when he ran re-election on the argument that his opponent was some sort of devil, we’ve been grousing ever since, and we feel obliged to grouse once again as he leaves office with unaccountably high approval ratings.
Obama’s more die-hard admirers have already unleashed newspaper serials and hour-long video tributes and full-length hardcover books explaining how great he was, almost as great as promised back in the days when he was talking about how sea levels would fall and the national debt would decline and all that unpleasantness with Islam and the rest of the world would surely be worked out, but the case is hard to make at the moment when Donald Trump is about to be inaugurated as president.
All the testimonials point out how very bad the economy was when Obama took office, and how not -so-bad it is upon his departure, but we’ve paid enough attention that we’re not impressed. The economy was indeed in a deep recession starting some four or five months before Obama was inaugurated, but recessions always end and this was officially over before Obama could get his literally more-than-a-trillion-dollar “stimulus package” passed, and despite all the spending that had been added on top of the literally-more-than-a-trillion dollar Troubled Asset Relief Program that Obama and pretty much everyone else from both parties voted for the recovery has been the weakest on post-war record, and although the headline unemployment rate looks pretty good the broader measure that includes part-timers and the unemployed and those out of the workforce and is buried deep in story hasn’t fully yet fully recovered. Massive new regulations for the financial industry and a major government power grab of the health care sector almost certainly had something to do with the sluggishness, and what growth did occur can largely be attributed to an oil boom that Obama tried to thwart. There was also a stock market boom, but that was because the Federal Reserve kept pumping money that had nowhere to go but the stock market, where it naturally wound up exacerbating all that economic inequality that Obama had vowed to end with his tax hikes, and although he has Bill Clinton’s luck that the bubble won’t burst until the next administration we’re not counting it as a major accomplishment.
Accomplishments are even harder to find in Obama’s foreign policy, although that doesn’t stop his admirers from trying. No one dares say that Obama’s Libyan adventure or that “red line” he in drew in the Syrian sand have worked out at all, and his past “reset” appeasement of Russian dictator Vladimir Putin is suddenly unfashionable in liberal circles, but they do try to cast the deal with Iran where we give them billions of dollars and they sort of pretend not to be building a nuclear bomb as a breakthrough victory. The decision to withdraw American troops from Iraq helped win Obama re-election, and after four years it gets occasional mention, although even his most ardent admirers must admit there have been unhappy consequences. Obama’s efforts on behalf of the European Union and Israel’s more liberal political parties and Latin America’s more Marxist types have not proved fruitful, China and Russia and Iran and all the usual troublemakers are more troublesome than they were eight years, and we can’t think of any of international relationships that have been improved. His most ardent admirers point to his good intentions, which we’ll conceded for the sake of argument, but the only thing that good intentions wins is a Nobel Peace Prize.
All the promises of a post-racial and post-partisan and altogether more tolerant society have also proved hollow. The past eight years of attempts to impose racial quotas on law enforcement and school discipline have made life more dangerous for many black Americans and understandably annoyed a lot of the white ones, Obama’s declared belief that politics is a knife fight and the Democrats should bring a gun and the Republicans can come along for the ride so long as they sit in the back of the bus because “I won” has heightened partisan acrimony, and although we’ve got the same sex marriages that Obama claimed to oppose in both of his runs he’s fueling the intolerance for anyone who doesn’t want to bake a cake for the ceremonies.
Although it’s good to at long last see it all come to an end after today, we expect the effects to linger for a while. The next president has already promised a more-than-a-trillion-dollars stimulus package, plenty more market interventions, health insurance for everybody that’s going to be cheaper and better than what was promised in Obamacare, and no messing around with those Social Security and Medicare and Medicaid entitlements that are the main drivers of the national debt. So far Trump’s Russian policies make Obama’s seem downright Truman-esque, and our erstwhile allies in Europe are as alarmed as ourselves, and although Trump also seems a friend of Israel we have no idea what he has in mind for the rest of the Middle East. As far as that hyper-partisan atmosphere of guns and knives and relegating enemies to the back of the bus and the might of an electoral victory making right, we see little improvement ahead.
We’ve already been grousing about Trump for more than a year now, and expect to do so for another four years or more, but we’ll always attribute some share of the blame to Obama. Those who cheered on Obama’s racialist and partisan and intolerant rhetoric should have known what they were bound to provoke, and those who cheered on the executive actions and bureaucratic harassment of political enemies are about to find out what it’s like to be on the receiving end, and despite all promises about making America great again none of us are likely to find out it works out any better than the Obama administration’s blather about hope and change.

— Bud Norman

Oh Yeah, the Economy

Perhaps it’s just because we’re not hanging out with a high-rolling crowd, or because baseball season is underway and the National Basketball Association’s playoffs just concluded, but nobody seems to be talking about the economy these days. All of the non-business news media seem equally uninterested, to the point that it takes another announcement from the Federal Reserve Board to get any front-page play for those poor newspaper scribes stuck on the economy beat.
We suspect this has something to do with the diocletian nature of all that boring data that the Fed went on about Wednesday. The economy isn’t quite bad enough for the Republicans to make an issue of it, and not nearly good enough for the Democrats to do any bragging, and apparently not so bad that the Fed feels obliged to again ramp up the money-printing that fueled that newsworthy stock market boom, but not so good that it intends to raise interest rates above 0 percent any time soon, and only the economics geeks understand what any of that means and none of them seem agree about it. Better to talk about baseball and basketball and whatever else might be going on, we suppose, but we can’t shake a nervous feeling that something important is going unremarked.
Perhaps it’s also because no one seems to know what to do about it. President Barack Obama’s only big economic initiative since that pork-laden “stimulus” bill and all the other debt-increasing “investments” he and his Democratic majorities in Congress foisted on the country back in the bad old days has been his Trans-Pacific Partnership free-trade deal with most of Asia, and the Republican congressional majorities that resulted from those earlier fiascos have been largely supportive, and it’s suddenly the remaining Democrats who are balking, and by now it’s more a story about our troubling politics than our troubled economy. David Brooks, The New York Times’ token “conservative” who fell in love with the perfectly pressed crease in Obama’s pants way back in ’08 and has never quite gotten over it, blames it all on what he calls the “Tea Party” faction of the Democratic party, which is wedded to labor unions and their protectionist preferences, and although he admits that Obama’s characteristic secretiveness prevents anyone without top-secret security clearance from knowing what the free-trade deal is he rightly notes that those same Democrats don’t seem to mind they have no idea about the wacky deal he’s making with the even wackier mullahs of Iran about their nuclear weapon ambitions. Our conservatism requires no quotation marks, and we’re staunchly Republican, and will grouse that the “Tea Party” analogy belies Brooks’ putative conservatism because the “Tea Party” was pretty much right about the growing debt and all the regulatory red-tape resulting from all those expensive “investments” and everything else, and we’re free-traders to our Adam Smith core, but even we are so spooked about Obama’s negotiating record and what might be hidden in that Trans-Pacific partnership that we’re willing to wait another two years or more for a better and more transparent agreement. There’s some fun in watching all the presidential hopefuls in both parties try to finesse this mess, even if the smart ones seem to understand they can simply ignore it, but otherwise we can well understand why people are following the divisional races in major league baseball and The Golden State Warrior’s long-awaited basketball championship.
Eventually everyone will be forced to pay some attention to the economy, certainly by November of ’16, and at that point it will be all about politics. The Republicans will argue that the numbers regarding jobs and household wealth and Gross Domestic Produce could have and should have been been much better, the Democrats will reply that those admittedly unimpressive numbers would have been so much worse without the president’s “investments” and resultant regulations and trillions of dollars of debt that everyone would have stopped going to work and buying groceries and falling for the latest advertised seductions and we’d all be rubbing sticks together in some cave, and that the same president’s secretiveness and lack of meaningful relationships with anyone else in government sank that Trans-Pacific Partnership that might have helped, and there’s no way way of knowing who the public will blame.
They’ll blame somebody, though, because there’s no getting around the end-of-the-month fact that economy isn’t that good. Even through the rose-colored glasses of the Federal Reserve Board the economy is expected to grow at at only 1.8 to 2 percent this year, barely enough to sustain those much-touted jobs number that haven’t quite kept up the arrival of new legal and illegal immigrants, another issue proving problematic for both Republican and Democratic presidential candidates, and on those rare occasions when people talk about the economy nobody seems to singing that happy days are here again. Whatever the economic numbers might be deep inside the business section around the next election day, we expect the Democratic nominee will be griping about the inequality of it all, which will resonate with a large resentful population of the country, and the Republican nominee will be talking about tax-cutting and de-regulating and unleashing the potential of the economy, which will resonate with the more hopeful portion of the electorate, nd the electoral numbers will decide the matter.
Until then, we’re as confused as anybody else. Zero percent interest rates don’t seem to provide any incentive for making the loans that could fuel an economic boom, and it isn’t any good for those poor old folks counting on interest-bearing retirement plans, but anything higher is likely to scare away investors in such uncertain and debt-laden and over-regulated times such as these, and that free-trade deal with a crucial foreign might or might not be a good idea, as only those with a top-secret security clearance would know, so we’ll anxiously await whatever happens. In the meantime we note that The Kansas City Royals are back on top of the American League’s Central Division and that The New York Yankees are within striking distance of the lead in the Eastern, and we’ve had a certain sympathy for The Golden State Warriors ever since they won their last title 40 years ago with that arrogant white boy Rick Barry as the star, so we’ll hope for the best.

— Bud Norman

The Debate is Over

The debate about Obamacare is over, according to a presidential pronouncement, and it seems a shame. There was a lot more grousing about it that we’d plan to do, now we’ll have to cancel that sarcastic skit we’d written for the upcoming “Gridiron” show, and the public is stuck with a spectacularly stupid law.
Perhaps the debate will rage on, despite the president’s protests, but he does seem to have an eerie power to end any arguments that he’s losing. The Benghazi scandal disappeared from the news shortly after his Secretary of State declared “What difference, at this point, does it make?” The Internal Revenue Service’s harassment of conservative non-profit groups has been similarly ignored after the president dismissed it as a “phony scandal,” even though the woman at the middle of it of all has quite genuinely invoked her Fifth Amendment right against self-incrimination. The arguments about fiascos from Fast and Furious to Solyndra to whatever happened to all that stimulus spending have all been as abruptly truncated.
All those cancellations of policies and increases in health insurance bills and the death panels passing judgment on grandma and the rest of it will make Obamacare harder to ignore, but the left’s power to put an end to losing arguments should not be underestimated. Even with the coldest winter in memory stubbornly stretching into April after a decade-and-a-half of global cooling the debate about anthropogenic global warming has been declared over, and most of the media have obediently obliged. A relatively recent bout over the five millennia-old tradition of marriage has also been stopped on a technical knock-out, and the half of the country with lingering doubts has effectively been banished from the mainstream of contemporary society. Any debate about the social acceptability of white racism has been thoroughly ceased, which is a good thing, but some very non-racist debate about affirmative action and inner-city crime and other issues that have baleful effects on minorities have also been stopped.
Around the time of the president’s first election Time Magazine declared on its cover that “We Are All Socialists Now,” and that seems to have settled that. If America isn’t quite yet socialist by consensus, we’re at least far enough along that the Majority Leader of the United States Senate can confidently slander the Koch brothers as “un-American” for their pro-capitalism activities and anybody with concerns about that $17 trillion of debt is easily dismissed a radical anti-government kook. Arguments about the basic assumptions of the New Deal welfare and regulatory state were declared over more than 60 years ago, with even such a stalwart Republican as Ronald Reagan being unwilling to do more than try to retain their old limits, and they’ve been barreling towards their illogical conclusions ever since.
We think that these debates never really go away, though, even if they have to be revived by catastrophe. We’d also like to think that Americans still have a stubborn unwillingness to submit to stupid laws, and that enough argument can avert catastrophes, but that’s debatable.

— Bud Norman

Five Long Years of Stimulation

Monday marked the fifth anniversary of the American Recovery and Reinvestment Act, better known as “the stimulus,” but we did not observe the occasion with a celebration. What with the economy the way it is, and having failed to apply for any available federal funding, we could ill-afford a fancy party or a bottle of fine champagne.
There was a warm rush of nostalgia, however, as we recalled the giddy optimism that attended President Barack Obama’s lavishly ceremonial signing of the law. We were told that the law would cost a mere $800 billion, already a insignificant sum by Washington standards, and yet keep the unemployment rate from topping 8 percent and bring it down to 5 percent by 2013 with “shovel-ready jobs” while lifting two million Americans out of poverty and saving the world from global warming by creating a new “green energy” industry. Since then the cost has grown to $2 trillion, the unemployment rate hit 10.1 percent and stayed above 8 percent for four years before enough people finally gave up looking for a job to push it down to the current 6.6 percent, the poverty rate has risen to a 50 year high, the president has joked that the shovel-ready jobs were “not as shovel-ready as we expected,” and the “green jobs” that survived the bankruptcies of the subsidized companies turned out to cost about $5 million apiece. This winter’s wicked weather suggests some success in combating global warming, but otherwise an objective observer might reasonably conclude that all the optimism seems have been unfounded.
Still giddy after all these years, the law’s indefatigable apologists offer two lines of defense.
One is that even if the stimulus did not live up to its promises it did at least prevent the country from sliding into another Great Depression and the earth from sliding out of its orbit and into the sun. The White House economists did overstate the stimulative effect of the stimulus, according to this popular theory, but only because they had generously underestimated the damage done by the stinginess and de-regulatory zeal of that free-market-crazed cowboy George W. Bush. This ignores that only months before signing the stimulus into law Obama had criticized Bush’s “irresponsible” and “un-patriotic” budget deficits, and fails to name a single regulation Bush eliminated that might have caused the financial downturn, and conveniently omits any mention of the Clinton-era “affordable housing” policies and their sub-prime shenanigans that did in fact cause the crash, but it has the emotionally satisfying appeal of blaming Bush.
The other argument is that the stimulus failed to achieve its stated goals only because it was far too small. One might expect that a $2 trillion infusion of freshly-printed cash would be sufficient to stimulate some economic activity, especially if you throw in a third trillion from the Trouble Assets Relief Program passed just a few months earlier, but apparently not. The theory that if what you’re doing only seems to be making things worse you should do far more of it is not new, having been around at least since it informed the Roosevelt administration policies that prolonged the actual Great Depression for nine years before the massive stimulus program that was World War II came along, and its temptation to those handing out the money has not diminished over the years.
Neither of these arguments can be definitively disproved, as economics does not allow for the sorts of controlled laboratory experiments that would settle such questions in the harder sciences, but there does seem ample reason for a healthy skepticism. The notion that handing out a couple trillion dollars of Monopoly money to reliably Democratic constituencies is the only logical way to revive an economy has an inherently suspicious ring to it, and much of the stimulus money was spent in ways that are remarkably unproductive even by government standards.
Those cheeky iconoclasts at The Washington Free Beacon chose ten especially outrageous expenditures that illustrate the point. One program spent $389,357 to find why young men drink malt liquor and smoke marijuana, when we could have told them for a far more economical sum that it’s to in order to get drunk and high, and another spent $8,408 to find out if mice can get drunk, which could have been learned for the price of a mouse and a beer. Another spent $1.2 million on a University of California-San Francisco study of erectile dysfunction in overweight men, while Yale University was given $384, 949 to study duck penises. (This genital pre-occupation reminds of us an old bureaucracy joke too blue to repeat here, by the way, but if you’re interested shoot us an e-mail with proof that you’re of age in your state and we’ll pass it along.) Yet another $100,000 went to fund anti-capitalist puppet shows, a particularly peculiar way of promoting economic growth, and still another $600,000 was spent to plant trees in the wealthiest neighborhoods of Denver, which presumably offset the benefits to the hated rich with commensurate benefits to beloved and impoverished Mother Nature. If such wacky use of public funds does not convince you of the wisdom of the stimulus, perhaps the $1.3 million spent on signs advertising the benefits of the stimulus did the trick. Judging by the amount of Obamacare’s budget spent on advertising its blessings, the government seems quite convinced that you’ll fall for it again.
Which is not to say the apologists aren’t quite right, of course. Perhaps such spending did save the country from breadlines and a return to the hit parade for “Brother, Can You Spare a Dime,” and perhaps it would have worked better yet if only we’d be willing to shell out a cool million for even more duck penis revelations, and there is no denying that the earth hasn’t slipped out of its orbit and into the sun. We can’t quite shake a nagging suspicion that Keynesian is bunk, and that like global warming it’s a scam to legitimize the government’s ravenous appetite for power, but if we could afford a fine bottle of champagne we’d drink it.

— Bud Norman

The “What, Me Worry?” Administration

Vice President Joe Biden was sounding quite bullish during his remarks at the White House on Monday, going so far as to say that Americans are no longer worried about the economy or “America’s ability to be in position to lead the world in the 21st Century.”
He was obviously making an overstatement, as proved by our own incessant worrying about these matters, but we suppose that vice presidents are obligated to engage in such hyperbole. There’s something troubling about it in this case, though, and for a couple of reasons.
One is the frightening possibility that he’s right, and Americans actually have stopped worrying about the economy. Not all Americans, as the many millions of unemployed and the millions more struggling to get by on their more highly taxed wages are no doubt as worried as ever, but at least enough of them to keep the pressure off the administration to do something about it. Anyone still feeling secure in a well-paid job who gets his information from the usual news sources could easily believe that the economy no longer requires worry, as the usual news sources now mostly concern themselves with sequesters and pointless gun control proposals and an illegal immigration problem that has largely gone away due to the lousy economy. The average news consumer has likely also gleaned a general impression that to whatever extent the economy is still struggling it is because of those darned Republicans and their bizarre fetish about the national debt, a view that might even be especially common among the unemployed and the working poor.
Even more frightening is the possibility that Biden and his boss also believe there is nothing to worry about, which would neatly explain the Obama administration’s economic program. Obama’s main preoccupation seems to be punitive tax rates on the rich, which is always couched in terms of “fairness” and never in terms of economic growth or job creation. Whatever arguments one might make for the “fairness” of the administration’s signature legislation, derisively known as “Obamacare,” it unquestionably provides hugely expensive disincentives for every business to hire no more than 49 employees or any new workers at more than 29 hours a week. The ever-expansive regulatory state that Obama seeks might also provide some benefit, but no one is arguing that it will cause an economic boom any time soon. There are still the occasional calls for more stimulus spending, even as the president poses as a fiscally sober sort, but at this point it seems rather perfunctory.
Everything on the Obama agenda seems to be sorts of things that liberals want to do when the economy is churning along, confident that the great engine of free enterprises will withstand a few tweaks, but it’s not all the sort of thing that one does during times of economic contraction. Biden might be offering the obligatory pep talk, but the scarier possibility is that he’s being sincere.

— Bud Norman

That Confounding Obamanomics

Perhaps it’s because Barack Obama’s genius is so far beyond the comprehension of mere mortals, but even after four years of pondering we’re still having the hardest time understanding his economic theories,
We’ve never quite grasped, for instance, the part about how the economy crashed in 2008 and has never fully recovered because the income tax rates for the top 2 percent of earners were set a few points too low way back in the dark days of the Bush administration. So far as we can tell the president has never attempted to explain this counter-intuitive contention, and instead seems content with the knowing nods that it always gets from his avid admirers, but we’d love to hear him walk us through it some day. We thought the recession had something to with the government’s insistence that the banks make hundreds of billions of dollars in home mortgage loans to people who were never going to be able to pay the money back, but the president has never made any mention of that so there must not be anything to it.

Some people have explained on the president’s behalf that the too-low tax rates for the hated rich caused the deficit to rise, which somehow caused all those people to default on their mortgages, and they seem to truly believe this. When we note that federal revenues actually increased in the years after the tax rates were lowered, and continued to rise until all those bad loans brought the banks down, they always respond with an exasperated sigh that sounds quite convincing. We also note that the deficits have doubled since Obama took office, but apparently this is also Bush’s fault, and we’re assured that deficits are necessary to stimulate the economy.

It makes some tenuous sense, we suppose, that if the too-low tax rates caused the recession then upping them a few points would restore the nation’s economic health, but that leaves us wondering why the president is also insisting on another round of multi-billion dollar stimulus spending. According to one story the spending is needed to offset the economic drag of a tax hike, but if so it would seem much simpler to just skip the tax hike. Adding to the confusion, the proposed spending would add to the deficit that is said to have caused the economy to tank and remain tanked, but maybe it will only add to the good kind of bigger deficit that stimulates the economy.

All those trillions of dollars of deficit spending over the past four years don’t seem to have done much stimulating, not at first glance at the statistics measuring economic growth and job creation, yet the president’s many fans insist that without it everyone in the country would now be rubbing sticks together in caves and shooting each other over the last bushel of grain. There’s no way of proving this, economics being such a dismal science, but neither is there any way of disproving it so we’ll just do the fashionable thing and take the president’s word for it.
We’re also assured that no matter how many trillions of dollars of debt accrue there will none of the negative consequences that have followed in Greece, Spain, Argentina, or any of the other countries that have taken such a profligate path. Why this is so we’re not sure. Something to do with American exceptionalism, probably, although the president only believes in that to the same extent that the Greeks believe in Greek exceptionalism.
Oh well, there’s another four years to figure it all out. We’re sure that happy days will be here again by then, and the genius of it all will be clear.

— Bud Norman