[Vision2020] Obstruct and Exploit

[Art Deco]

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September 9, 2012
Obstruct and Exploit By PAUL KRUGMAN

Does anyone remember the American Jobs Act? A year ago President Obama
proposed boosting the economy with a combination of tax cuts and spending
increases, aimed in particular at sustaining state and local government
employment. Independent analysts reacted favorably. For example, the
consulting firm Macroeconomic Advisers estimated that the act would add 1.3
million jobs by the end of 2012.

There were good reasons for these positive assessments. Although you’d
never know it from political debate, worldwide experience since the
financial crisis struck in 2008 has overwhelmingly confirmed the
proposition that fiscal policy “works,” that temporary increases in
spending boost employment in a depressed economy (and that spending cuts
increase unemployment). The Jobs Act would have been just what the doctor
ordered.

But the bill went nowhere, of course, blocked by Republicans in Congress.
And now, having prevented Mr. Obama from implementing any of his policies,
those same Republicans are pointing to disappointing job numbers and
declaring that the president’s policies have failed.

Think of it as a two-part strategy. First, obstruct any and all efforts to
strengthen the economy, then exploit the economy’s weakness for political
gain. If this strategy sounds cynical, that’s because it is. Yet it’s the
G.O.P.’s best chance for victory in November.

But are Republicans really playing that cynical a game?

You could argue that we’re having a genuine debate about economic policy,
in which Republicans sincerely believe that the things Mr. Obama proposes
would actually hurt, not help, job creation. However, even if that were
true, the fact is that the economy we have right now doesn’t reflect the
policies the president wanted.

Anyway, do Republicans really believe that government spending is bad for
the economy? No.

Right now Mitt Romney has an advertising
blitz<http://www.slate.com/articles/news_and_politics/politics/2012/09/romney_s_ads_against_defense_cuts_treat_military_spending_as_a_jobs_program_.html>under
way in which he attacks Mr. Obama for possible cuts in defense
spending — cuts, by the way, that were mandated by an agreement forced on
the president by House Republicans last year. And why is Mr. Romney
denouncing these cuts? Because, he says, they would cost jobs!

This is classic “weaponized Keynesianism” — the claim that government
spending can’t create jobs unless the money goes to defense contractors, in
which case it’s the lifeblood of the economy. And no, it doesn’t make any
sense.

What about the argument, which I hear all the time, that Mr. Obama should
have fixed the economy long ago? The claim goes like this: during his first
two years in office Mr. Obama had a majority in Congress that would have
let him do anything he wanted, so he’s had his chance.

The short answer is, you’ve got to be kidding.

As anyone who was paying attention knows, the period during which Democrats
controlled both houses of Congress was marked by unprecedented
obstructionism in the Senate. The filibuster, formerly a tactic reserved
for rare occasions, became standard operating procedure; in practice, it
became impossible to pass anything without 60 votes. And Democrats had
those 60 votes for only a few months. Should they have tried to push
through a major new economic program during that narrow window? In
retrospect, yes — but that doesn’t change the reality that for most of Mr.
Obama’s time in office U.S. fiscal policy has been defined not by the
president’s plans but by Republican stonewalling.

The most important consequence of that stonewalling, I’d argue, has been
the failure to extend much-needed aid to state and local governments.
Lacking that aid, these governments have been forced to lay off hundreds of
thousands of schoolteachers and other workers, and those layoffs are a
major reason the job numbers have been disappointing. Since bottoming out a
year after Mr. Obama took office, private-sector employment
<http://research.stlouisfed.org/fred2/series/USPRIV?cid=32306> has risen by
4.6 million; but government
employment<http://research.stlouisfed.org/fred2/series/USGOVT?cid=32325>,
which normally rises more or less in line with population growth, has
instead fallen by 571,000.

Put it this way: When Republicans took control of the House, they declared
that their economic philosophy was “cut and grow” — cut government, and the
economy will prosper. And thanks to their scorched-earth tactics, we’ve
actually had the cuts they wanted. But the promised growth has failed to
materialize — and they want to make that failure Mr. Obama’s fault.

Now, all of this puts the White House in a difficult bind. Making a big
deal of Republican obstructionism could all too easily come across as
whining. Yet this obstructionism is real, and arguably is the biggest
single reason for our ongoing economic weakness.

And what happens if the strategy of obstruct-and-exploit succeeds? Is this
the shape of politics to come? If so, America will have gone a long way
toward becoming an ungovernable banana republic.


-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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