* Middle Class Relief. These are the type of proposals that work for politicians in normal economic times. In bad economic times, the middle class (and others) do not want symbolism and sympathy. They want economic growth and jobs.
* Economic Growth and Jobs. Tonight the president had one main task: to make a credible case that his policies will help reduce unemployment. For the most part, he failed. His proposal to cut the capital gains tax for small business investment seems positive. His other ideas -- taking money from some bankers and giving it to other bankers and a temporary hiring tax credit -- are a caricature of job-creation policy. For the most part, Obama defended a continuation and expansion of the stimulus package, which promises to bring prosperity on high-speed trains. Compare Obama's speech to John Kennedy’s State of the Union in 1963, which called for permanent tax cuts that would allow America to move toward full employment. Some Democratic presidents have actually understood how the economy works.
1. David Hein wrote:
Gerson is a smart guy, and he hits the nail on the head, though I confess that I do like the idea of direct job creation thru support for high-speed rail. The traffic on the East Coast, esp. between Richmond and Boston, is horrific.
How did Obama go so fast from being the charismatic wonder to being so chilly, boring, and out of touch?
January 28, 12:43 pm | [comment link]
2. billqs wrote:
#2 He could only ride the Bush-bashing so far…
January 28, 1:29 pm | [comment link]
3. David Hein wrote:
No. 2. Yes. And I hate to say it, because I know he’s not loved by either Right or Left, but John McCain’s straight talk still makes a lot of sense to me.
January 28, 1:33 pm | [comment link]
4. graydon wrote:
BHO should thank GWB for his presidency. People voted for him to not be GWB and little more. Problem is they failed to weigh and measure him for who is was and is. Pretty much a lightweight as he moves into his term. Still, I stand by my rule. Never judge a public figure until they have been dead for 40 years. Give time to season the memory of their deeds. Had we done that, the FBI HQ would not bear the name Edgar J Hoover.
January 28, 1:53 pm | [comment link]
5. Cennydd wrote:
I’m willing to give Obama the benefit of a doubt, and then if he doesn’t carry through on what he proposes, then I’ll pass judgment. Then, too, he can’t do it by himself, as he said, and it’s up to Congress to act. If they don’t, then the blame’s on them.
January 28, 2:32 pm | [comment link]
6. Chris wrote:
the Public: Obama doesn’t get it
Obama: the Public doesn’t get it
Public has more votes, even in Chicago (or Mass.)...
January 28, 2:35 pm | [comment link]
7. John316 wrote:
Republicans in power: Cut taxes, increase spending, gripe about “giant deficit left by Dems”.
January 28, 2:51 pm | [comment link]
Dems in power: Cut taxes, increase spending, gripe about “giant deficit left by predecessor”.
8. Dave B wrote:
#4 Not only do we owe George W Bush for Obama’s presidency we owe the left leaning fawning press. A New York times columnist Bob Herbert wrote about Obama’s Credibility Gap and ask who is Obama..Maybe the New York Times and other media should have asked that a year and a half ago, a little late now…..
January 28, 4:38 pm | [comment link]
9. obadiahslope wrote:
The US: recession and record unemployment.
January 28, 6:54 pm | [comment link]
Australia: no recession, jobless rate falls to 5.5%
The reason: Australia had a conservative government that really was conservative and ran surplus budgets. Our incoming Labor governement was able to run a massive stimulus (larger than the US in relative terms) new buildings for every school in Australia and free roof insullation to all who want it.
As a result the GFC was only a blip for us.
10. Chris wrote:
#9 there is no American equivalent to John Howard (or at least has been).
January 28, 10:44 pm | [comment link]
11. John Wilkins wrote:
This is one of the most ridiculous articles I have ever read. Who is this guy? Understand economics? Perhaps Gershon does have a better understanding than all the economists who think that Obama’s stimulus wasn’t big enough. He missed that Obama did, actually, offer tax cuts, but they were for the middle class, and not those who probably didn’t need them.
If Gerson really understood economics, he might have read Richard Posner’s reading of Keynes. Right now businesses and banks have lost confidence in the economic system. In an ideal world it would be pretty great if they would just invest in jobs and people. But they aren’t. And they won’t unless they become confident. All government does is step up the pace of spending to increase confidence.
Then people pay taxes to make up the deficit. But if they aren’t working, then no taxes, and the deficit remains. The deficit Obama inherited.
Amusing how the other party wants to deny responsibility for the mess we’re in.
JFK had the benefit of a rapidly growing government that had just invested in the infrastructure of the US. The government used taxes to pay for universities, roads, the military and NASA. Businesses benefited. Tax cuts were helpful, but only helpful because we already had an infrastructure that people paid for. Some might not have wanted to pay for it. But it ended up helping everybody.
January 28, 11:41 pm | [comment link]
12. azusa wrote:
#4: or even J. Edgar Hoover ....
January 29, 3:36 am | [comment link]
13. Dave B wrote:
John Wilkins wrote: “The deficit Obama inherited” Are you refering to the Tarp funds Obama voted for as a Senator, the “Stimulus Package” with tons of pork in it, it is bantered about that Obama, in one year, has doubled the deficit and there is a CBO report that the stimulas package is costing 70 billion more than projected! Obama didn’t inherit it all…
January 29, 6:34 am | [comment link]
14. graydon wrote:
#12: I stand corrected. Hopefully my point was conveyed nevertheless. Whether it be Reagan National Airport or anything else, take a breath or two before carving it in stone.
January 29, 9:37 am | [comment link]
15. Sarah wrote:
RE: “Right now businesses and banks have lost confidence in the economic system. In an ideal world it would be pretty great if they would just invest in jobs and people. But they aren’t. And they won’t unless they become confident. All government does is step up the pace of spending to increase confidence.”
Well NO. Businesses and banks have lost confidence in the State—which increasingly is inserting itself more and more into the economic system. The businesses with whom I’m working—successful businesses too—are terrified of the massive increased costs that the State is hopeful of tacking onto their P&L sheets—increases in energy [thanks cap and trade], healthcare, and much much more in the form of further regulatory burdens.
As a result they’re doing just what they ought to do—stockpiling cash and tightening down on employment and all other costs or hoped-for purchases.
One can’t help but wonder if JW has ever actually worked in the business world for any length of time, as opposed to a non-profit; the cluelessness about how and why businesses make their decisions and what they are dealing with in the State’s random jerkings and heavings and convulsions is exceptional.
January 30, 2:23 pm | [comment link]
16. John Wilkins wrote:
“The businesses with whom I’m working” this is an example of an anecdote. Anecdotes are useful. She interprets this as a counterclaim to my own. My claim is that 1) businesses require confidence and 2) the state can help restore confidence. It doe this by 1) supplying money and 2) purchasing products. It does the first through monetary supply (think Friedman), and the second through buying products that businesses sell.
She mentions some cryptic businesses: and of course there would be some businesses that work based on ideological grounds rather than, say, on supply and demand, and then there is a standard “ad hominem” refutation. I do, of course, purchase from businesses and observe that governments routinely hire businesses in the community to do work. Those businesses seem to base their decisions on a simple idea: demand. They may share some fantasies about the collectivist Goblins that haunt the mind of many bloggers. But in the end, if the government wants to purchase a road, plenty of private contractors will dive in.
I’m sure there are individuals, including business people, who don’t believe in the multiplier effect. It’s kind of central to the concept I’m describing. But that doesn’t means that it is wrong. And whether or not I’ve worked in the business world really makes little difference about the truth of how money, in fact, works. Usually, to make an argument, anecdotes and ad hominem attacks are less effective. But its always amusing to see how Sarah makes the argument about the person, rather than the concept itself.
Because to me, money is money. The government’s money is not much different than any given corporation. The money any business makes from building the house of a fireman, teacher or policeman or government employee; the business cards made for any person who works for any agency who has a government contract; has benefitted from some government spending.
Confidence generally improves if the product you sell will be bought. For most businesses, I imagine, it doesn’t generally matter who.
Although perhaps, in some places, it does matter who. That would, of course, be an error in the marketplace, it seems.
January 31, 2:23 pm | [comment link]
17. John316 wrote:
My own anecdotal evidence is that the economy is rebounding. A part of my business is working as a freelancer for national television programs and they have been increasing spending with me. This part of my business trails off when national advertising dollars dry up, and it returns when those national advertising dollars return. Currently, there is a lot of money being spent so I’m thinking that the corporations that buy the advertising are confident in a good year this year and so are the national television programs.
John it is only anecdotal evidence, but it has always been a good indicator of what is going on nationally.
January 31, 3:18 pm | [comment link]
18. majorinsight wrote:
My company performs pre-employment background screening across a broad spectrum of industries, companies both big and small. Our volume continues to be flat, off about ” percent from our historical average. Our clients tell us they are treading water, filling positions when they get to the point of desperation. Hiring always lags behind consumer demand, and our projections continue to be that we will flat for the remainder for the calendar year.
January 31, 3:39 pm | [comment link]
19. Sarah wrote:
RE: “this is an example of an anecdote.”
RE: “She interprets this as a counterclaim to my own.”
Well no—it *is* a counterclaim. ; > )
JW asserted: “Right now businesses and banks have lost confidence in the economic system.”
I asserted: “Businesses and banks have lost confidence in the State. . .
RE: “My claim is that 1) businesses require confidence and 2) the state can help restore confidence.”
Probably a good idea for JW to now try to change his original claim. Which was crystal clear and in writing earlier and which readers can see for themselves.
SOP for JW. It’s just how he operates when his rhetoric falls to incoherent shambles. Setting that aside, on to his later assertions.
RE: “. . . of course there would be some businesses that work based on ideological grounds rather than, say, on supply and demand” . . .
Fascinating. JW deems the loss of confidence in the State due to its random jerking convulsive insertions into business as “ideology.” But it’s simple loss of confidence. And when people lose confidence, and are anxious, they hold onto their money.
RE: “. . . and then there is a standard “ad hominem” refutation.”
Nonsense—the actual refutation was earlier. ; > )
And JW still doesn’t comprehend what an ad hominem fallacy is—it has to do with thinking that an argument about an idea is made by attacking the idea’s *messenger*. But I didn’t attempt an argument about JW’s assertion by attacking the messenger. After the refutation of his assertion I then proceeded to conjecture about the reasons for JW’s startling ignorance of basic business behavior.
And it appears . . . heh . . . that my conjecture is closer to the mark than I had thought.
RE: “I do, of course, purchase from businesses and observe that governments routinely hire businesses in the community to do work.”
Yes, yes, of course you routinely make purchases.
RE: “Usually, to make an argument, anecdotes and ad hominem attacks are less effective.”
I made no argument. I made no “ad hominem” [sic] attacks. I issued a contrary assertion to JW’s assertion.
And he didn’t appreciate that. And now he’s just throwing random new [and old] assertions against the wall.
January 31, 5:20 pm | [comment link]
20. John Wilkins wrote:
Well, Sarah, you always do know how to raise it up a notch.
My initial comment was: “they won’t unless they become confident. All government does is step up the pace of spending to increase confidence.” That was the central economic argument. There is plenty of evidence: but I’m not the economist. I’m simply reading USA Today and the FT.
I followed it up with: “1) businesses require confidence and 2) the state can help restore confidence.”
Both are fairly similar, to me. I believe that the government’s money and the money of business is the same. In standard economic theory, it may take a while for businesses to gain confidence again. They may in the long run, but as Keynes said, “in the long run, we’re all dead.”
The counterclaim you make, which is that some anonymous businessman believes that the government is too big, and has lost confidence in the state, is an interesting opinion. But just because someone drives a car, doesn’t mean they understand engineering. Human beings may be animals, but they don’t all understand anatomy. I suppose I could infer you’ve never worked in a factory, been on welfare, or a blue collar job in your life, but, it simply doesn’t matter. I suspect there is a greater diversity among businessmen than your anecdote illuminates.
Church does have plenty of similarities to business, in any case.
I admit, I don’t quite expect businessmen to have read Adam Smith. Mark McCormack once told the anecdote of a millionaire who said “I just buy my product for two dollars, sell it for five, and make two dollars!”
My point: lack of confidence in the state doesn’t say very much. Lack of people spending, that’s probably more of a cause. Fantasies about the state are probably (althoguh if you have empirical evidence I’ll change my mind) less important than real-time spending.
Let me say that there are good reasons not to trust the state. It has a history of lying about all sorts of things. Say, the gulf of Tonkin. The overthrow of Allende. Watergate. Iran-Contra. Monica Lewinsky. It used to be, in the old days, conservatives trusted the establishment and the leftists critiqued it. It’s interesting to see how that’s changed.
It seems that the stimulus package - the government’s attempt to shore up confidence- helped plenty of people keep their jobs, and kept money in communities. Apparently, big bad government worked. Without it, it would have been much worse. The government’s spending was more effective than Sarah’s assertion indicates.
February 2, 7:27 pm | [comment link]
21. Sarah wrote:
RE: “but I’m not the economist. I’m simply reading USA Today and the FT.”
And boy does it show.
RE: “The counterclaim you make, which is that some anonymous businessman believes that the government is too big, and has lost confidence in the state, is an interesting opinion.”
Yup—an opinion. Both of us throwing opinions and assertions around.
RE: “But just because someone drives a car, doesn’t mean they understand engineering.”
Well I’d say when someone has built the car they probably understand the car. And when someone has built a business they probably understand the business.
RE: “I suppose I could infer you’ve never worked in a factory, been on welfare, or a blue collar job in your life . . . “
You could—and you’d be wrong. You could infer something and be wrong. And I—tee hee—could infer something and it appears that I was correct. ; > )
RE: “It seems that the stimulus package - the government’s attempt to shore up confidence- helped plenty of people keep their jobs, and kept money in communities. Apparently, big bad government worked. Without it, it would have been much worse.”
Haw haw haw haw haw haw—hee hee hee . . . no it didn’t help “plenty of people keep their jobs”—heavens it helped people *lose* their jobs. The State has massively and monstrously FAILED—Epic Fail—in its last two years of idiotic responses to the recession. So no. It did not work. Yes, the economy is much worse than it would have been had the State not interfered. And yes, we’ll be paying for those foolish actions now for a long long time. It, in fact, did the precise opposite of what you assert that it did.
Of course . . . mutually opposing and antithetical assertions is nothing new for us, JW.
RE: “Fantasies about the state are probably (althoguh if you have empirical evidence I’ll change my mind) less important than real-time spending.”
Well of course you wouldn’t change your mind—look at your comments above about jobs. You’re a collectivist—you adore the state and its expansion. And why would either of us, in our usual exchange of assertions and beliefs, wish to offer “empirical evidence”? Duh—neither of us are trying to change the other’s mind anyway—we don’t share a similar enough foundational worldview to get even close to that.
No, our exchanges are merely countering assertions—and I like that.
It’s always good to demonstrate and reveal the chasm between the two sides, as is so easily accomplished with you.
February 5, 1:23 pm | [comment link]