Why Won’t Obama Tell Anyone His Jobs Strategy?

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One of the most common bipartisan criticisms of President Obama’s White House is that they have no cogent strategy for creating new jobs. These critics rightly say that jobs and the economy are voters’ biggest concern right now, and that more needs to be done to – dare I say – stimulate job creation. Yet the political feasibility of any more substantial stimulus spending is non-existant. How, then, should the government go about resuscitating the economy?

I tell you now that such a plan is hidden in plain sight. It starts with allowing the Bush tax cuts to expire for the highest bracket ($200k+), and is realized by the recent (and quickly forgotten) pledge to introduce a 100% tax write-off for business investment through 2011. Put yourself in the mindset of a business owner, small or otherwise, who would be affected by the tax rate increase. Are you likely to hold your +200k earnings in the bank and take your tax hit lying down, or are you going to spend it to expand your business, your revenue, and (the crux of the plan) your employees?

By incentivizing job creation rather than engaging in it through government directly, the White House may have signaled an intriguing shift in policy. If done full-throatedly, it changes the Democrat vs. Republican debate in a very important way. Currently, because of the stimulus package and the way it’s been handled, the choice can be phrased this way: “Would you rather put your trust in the bureaucracy or business to most quickly and efficiently restore the economy?” This is, as any American will be able to tell, a losing battle for Democrats; nobody trusts the bureaucracy.

But, as I’ve written before, Obama is far more of a centrist than virtually anybody in this country gives him credit for. Maybe he’s not really all that jazzed about handing direct control of job creation to the bureaucracy. But maybe he’s also learned his lesson from TARP – specifically, banks’ unwillingness to lend to one another after having been bailed out: business success is not always American success. Perhaps he’s starting to recognize that sweet-spot right between the two – where government sets the high-level priorities of the country, and leaves the efficiency aspect to business.  Profit-maximization is now the motive for the job-creators, not political mandate, and the choice instead becomes: “Would you rather trust government to steer business towards job-creation, or leave them alone and hope they do it themselves?”

That’s a far more winnable debate.  And it begs the question that’s been bothering me for a solid week: why aren’t we having it?

Wingers Never Quit, and Centrists Never Win

Ahhh. Another day, another fresh issue for left- and right-wingers to yell and scream and assault each others’ characters over, or in the parlance of traditional news outlets: “[Insert political entity] divided on [Insert key issue].” Today’s tantalizingly (as always) reads, “Capitol Hill divided on Obama plan to bypass approval for Elizabeth Warren.” Now, if you haven’t heard of this particular lawyer/bureaucrat, you can be forgiven. She’s formerly a Harvard law professor, and currently sits on the board of five in charge of monitoring the successful repayment of TARP funds by the bailed-out banks. She’s not quite a national figure. But she should be.

Full disclosure: I am in love with Elizabeth Warren. Maybe it’s the quasi-folksy charm, maybe it’s the long and illustrious tenure at Harvard, maybe it’s her fiery rhetoric in defense of the American consumer, or maybe I’ve just got a thing for glasses, but whatever it is, it’s potent.

Anyway, the issue at hand is the brand-spanking new Consumer Financial Protection Bureau created by the much-ballyhooed financial reform bill enacted into law a few months ago. Its job is defined quite nebulously – “regulating consumer financial products and services in compliance with federal law,” to be exact – which means that its actual power and scope will be defined over the course of the next few years by the White House, Congress, and most importantly the CFPB’s inaugural director and his or her willingness to push its powers to their limits. As the CFPB was an institution Ms. Warren had been vocal about creating long before the 2008 financial crisis, many (left-wing) people would love to see her be first to hold the five-year-long position. Others (right-wing), however, fear that she’s a bit too much a full-throated bank-hater to properly run the agency.

Personally, I believe both sides have a point. I wouldn’t complain if she were the first director, but I can’t fault Obama for likely not choosing her to be, as the director’s role requires Senate confirmation and Ms. Warren is quite a polarizing figure among those in the know.  Instead, Warren is being taken on as an assistant to the President and special advisor to the Secretary of the Treasury, with a focus on leading the initial planning and structuring of the CFPB. Cue the outrage, please. Leader of a left-leaning advocacy group, described in the New York Times as ‘disappointed’: “Warren is confirmable, and a fight over her confirmation is worth having.”  US Chamber of Commerce, notorious Warren-haters: “This maneuver is an affront to the pledge of transparency and consumer protection that’s purported to be the focus of this new agency.” The left is saying the White House didn’t do enough, the right is saying they’ve gone too far. Sound familiar?

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Let’s be clear: What the White House has chosen to do in this instance is consistent with what they’ve done on nearly every contentious issue faced: taken the middle ground. Yes, that’s right all you hard-liners, I’m saying it: Barack Obama is a centrist. And the fact that so few see him that way demonstrates a fundamental problem with politics. Too many people in this country only listen to their idealogical clones, and tune out the rest to the point where their perceptions about the economy, foreign policy etc. begin to seem like gospel truth to them. So when, say, a right-winger hears that Obama is forcing through an $800 billion + stimulus package, they perceive that as far outside (read: to the left) of their experience of the debate, which makes him appear to be far-left. But if that person spent some time reading a few Paul Krugman columns here and there, they’d be a little more clear on what the scope of the debate was. At the height of the crisis numbers significantly higher than $1 trillion were being floated as serious possibilities. So, in search of bipartisanship, Obama went with a quite middle-of-the-road stimulus package.

Fast forward to the healthcare debate. When the public option was dropped from the final bill, a good chunk of left-wingers felt utterly betrayed by the White House for not threatening to veto unless the option was in the bill sent to him. But perhaps if they’d turned off MSNBC’s inane polemics about which healthcare firms were donating to which anti reform groups for a bit, they’d start to see that opposition to it was far less based on “death panel” rumors, and much more based on people’s concern that having the government run its own healthcare plan would send that whole sector of our economy into conniptions during a crisis, and on the widely-held idealogical belief that government is inherently bad at effective management.

Right now, Obama is generally viewed as a left to far-left politician, but that’s a product of the Tea Party’s vocality and its steady integration with mainstream Republicanism. But if the Democrats were under siege by their own fringe, we’d be hearing about how Guantanamo Bay is still open, how Obama ordered a troop increase in Afghanistan, and how he’s normalizing relations with China while it practices active repression in Tibet. The truth of the matter is that centrists are both the most important and most reviled members of our political system. Without them, we would be at a never-ending governmental impasse. Obama’s no devil, and he’s no saint either. He’s a center-left president, doing his best to take the middle path at a time when neither side knows what the hell is going on.

Honey, I Shrunk the Sense-Data

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In preparation for the beginning of my course in two weeks’ time, I began reading Bertrand Russel’s The Problems of Philosophy today. In it, he makes a distinction between physical objects, or matter, that exists solidly of its own accord and independent of us; and sense-data, the information we are given through our senses about the physical objects which comprise the world. He points out how our experience of anything external is based entirely on the sense-data we get from it, meaning that we live and understand our entire lives through the five windows we are born with, each of which helps us relate objects to ourselves, but none of which fully inform us of an objects nature entirely.

As I read through this, I was reminded of middle school – specifically, the first time I heard the scientific explanation for how our eyes see. I remember being thoroughly shaken, almost scared by the idea that color is not something intrinsic to an object, but rather something our brains construct from whichever wavelengths of light the object happens to reflect back to our pupils. At the time, it seemed so natural and basic that an item was its color in the same way that it was its shape and its size.

Not much later we learned about atoms and how each one is almost entirely empty space, and up went in a puff of smoke my assuredness in any object’s shape. After all, if at the sharpest level of clarity 99.9999% of a wooden cube isn’t really there, and the remaining 0.0001% is constantly in random motion, then we can’t really trust our sense of touch when it tells us that there are only six sides to it, and that each of them is very flat.

Well, today I fear I’ve lost size, too. Thinking about sense-data and how eyes work, I started to grow unsettled by the thought that, at any given moment, everything we are seeing is being taken in by two very small little spots on our eyeballs, which means that the actual sense-data we are receiving is far smaller than we perceive it to be. The actual image of a doorknob, or a TV, or our own bodies for that matter, is presented in a sliver of stray light less than one square centimeter in size, reflecting off of the physical objects around us. Our brains – as part of the very same process that transcribes certain wavelengths of light to our sensations of color – takes a square centimeter’s worth of data and, before that data even reaches our consciousness, imbues it with an innate recognition that it is representative of a much larger space – indeed of all the physical objects in our vicinity. From one square centimeter at a time, we get our entire concept of size, position, place, color. Ridiculous.

Boehn of our existence

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It’s nice to at least read about Mr. Boehner saying something to the effect of, “I’d be willing to drop the tax cuts for rich provision to pass renewal of the tax cuts for the middle class,” even if I’m not necessarily naive enough to take a professional politician on his word.  But what’s far more interesting about the article is the initially quite shocking statistic Mr. Boehner accidentally brings to the fore in this interview.

In explaining his position in support of renewing tax cuts for those in the highest bracket, he points out that in allowing the cuts to expire, “about half of all small business income will be taxed.”  When the interviewer responds by pointing out that the Joint Committee on Taxation calculates the percentage of small businesses as 3%, Boehner responds: “Well, it may be 3%, but it’s half of small business income, because obviously the top 3% have half of the gross income for those companies that we would term ‘small businesses,'”

Wait, what? The top 3% of small businesses haul in half of all the money that American small businesses make? That’s certainly news to me, and is also probably not the sort of statistic Boehner would want coupled with his campaign to renew the highest-bracket tax cuts.

Er, who did you say a gasoline tax hurts, Tom?

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In the New York Times on Saturday, Tom Friedman wrote about how America’s prerogative to consistently act unilaterally in support of non-vital interests is waning. Word craft aside, he occasionally has some very interesting points to make about the world, and so when I initially came across his idea to help maintain our influence in the world, my interest was sufficiently piqued.

Mr. Friedman suggests “a much higher gasoline tax” in order to “shore up our balance sheet and weaken that of our enemies.” In many ways this makes sense: either end of the two extreme reactions (and anything in between) to a gasoline tax initially seems beneficial. At one end, nothing happens to the amount of oil we take in on a yearly basis and the deficit gets a little bit smaller thanks to tax revenue, and at the other oil imports are drastically reduced along with OPEC’s influence on the country.

But there’s a lot of unintended consequence here. First is the obvious: gasoline is the consumer’s product. It’s what we use to get to work and to come back home. And consumers aren’t doing all too well right now. In fact, given the state of our economy, we really don’t need a sliding scale of possibilities for how a gasoline tax would affect our imports: consumer spending, employment and, crucially, consumer confidence, are all at or near all-time lows. People are already saving money any way they can, meaning that those who can limit or avoid trips to the gas station are already doing so. Increasing the gasoline tax would have have very little effect on the oil we import (and thus little effect on our “enemies” or our dependence on them) – in fact, its biggest effect would be to take money from those who have no alternative to driving, a.k.a. rural America. So, adding a gasoline tax amounts to little more than levying a tax on the lower and middle classes during an economic slump.

I have a theory. I believe that Mr. Friedman is using this editorial about America’s status as a superpower as an indirect argument for an aggressive push towards sustainable energy alternatives, a topic he writes about often. I believe that he’d very much so prefer the second of the two extreme results of a gasoline tax, since he and his friend Paul Krugman don’t lose too much sleep over our deficit.  It’s too bad for him, then, that increasing gasoline taxes is unlikely to convince anyone to buy a Prius, at a time when they’d neither be able to afford one, nor want to pay up for gasoline anyway.

2008 was a turning point in American politics, after all

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Remember November of 2008?  It was an emotional and victorious time, especially for liberals, who saw in Barack Obama’s election and the massive Democratic majorities in Congress the realization of what they’d been hoping for since 2005: that the majority of the country had been convinced by the actions of the Bush administration and Republican legislature to look to the left for practical, responsible governance, and that our center-right country had seismically shifted a few notches leftwards.

Fast forward to today. Obama’s population rating with the electorate that was once so enamored of him has stalled solidly below 50%. The Kaiser Health Tracking Poll shows that Democrats’ signature legislation, the healthcare reform bill, was viewed this past August more unfavorably than favorably for the first time since its passing. Republicans are poised to take control of the House this November.  What happened to that seismic shift? Well, I’m convinced that it hasn’t gone anywhere.

Much has been made of the similarity between this election cycle and that of 1994, when Newt Gingrich and his fellow political hopefuls rode Clinton’s unpopularity into the driver’s seat of both the House and the Senate – and rightly so.  They are, in fact, very similar stories: new telegenic Democratic presidents push hard for reform with fierce backlash from the opposition and public opinion steadily swinging against them.

But here’s the kicker: Obama’s first two years were vastly more liberal-oriented than Clinton’s.  Obama passed healthcare reform and the $800 billion+ stimulus package and some degree of financial reform and laid out a budget for 2010 that required an unprecedented $1.3 trillion deficit. Clinton not only abandoned his healthcare reform ambitions, but also drastically cut the deficit inherited by his Republican predecessor, well on his way to removing it completely. And the response of the electorate was, “NAFTA is too liberal for us,” and to take away both the House and the Senate.

In our time, the fact of the matter is the Dems won so badly in 2008 that if every seriously contested senatorial election this cycle swings for the GOP, they’ll pick up 10 seats and hold the Senate by a mere 51-seat majority. In 1994 they held it by 54, and that was against a party with a president eager to cut the deficit. Given the fact that they’re pitting political amateurs against some of the most politically experienced people in the country, it seems highly unlikely that the team fielding Civil Rights Act gaffe-prone Rand Paul and separation of church and state gaffe-prone Sharron Angle will be able to pull off this degree of an upset, which means the Democrats will all but certainly hold the Senate through both the worst economic crisis since the Great Depression and the most liberal presidency since at least Jimmy Carter. Now that’s what I call seismic.

Of the eight Republican senators elected in 1994, only three still hold their seats. Do you think that the inexperienced 2010 versions will fare any better? Reactionary gains tend to be short lived, and politics isn’t a short-term game.

Manifesto

Ah, that new blog smell.

In roughly one month, I begin my course in PPE – Philosophy, Politics and Economics, overseas at a university in the UK.  In order to keep sharp on these topics I’ve started this blog.  Every once in a while I’ll write something related to one of those three subjects.  Deviation for the sake of entertainment/laziness may occur, but I will make sure that there is some tangible connection with one of my subjects.  Hopefully something good comes out of this, but only time will tell.