It would appear that our choice in five months is between two folks who are prone to foot-in-mouth disease. President Obama earned election in 2008 on the strength of his words and a concept (Hopinchange) . The same strategy will not work in 2012. Re-election is about the ability to run on your record, or to at least discredit your opponent’s record. While our die-hard friends on the left may disagree, even the inner-circle at 1600 Pennsylvania Avenue, N.W. realizes that the latter strategy has a better chance come November.
Much like his running mate, President Obama is boxed in by his words. Even a story with a positive spin rings hollow if one wants to do their homework. For example, Rex Nutting of Marketwatch <ahref=”https://www.marketwatch.com/story/obama-spending-binge-never-happened-2012-05-22″>(WSJ)andhis recent spinning of the President as a deficit hawk comes as great news to the administration. Federal spending has increased at the lowest rate since the Eisenhower administration.
While that spin plays well with the “read the headlines” voters, the undecideds who want to apply some critical thinking would have a few things to say about it. For instance, one would really have to do something unprecedented to grow spending at a noticeable rate after the 2009 bailout bonanza. Since the bailouts were supposed to be a one-time rescue program with payback provisions, any increase means that the spending has been duplicated elsewhere. It also helped that the Iraq withdrawal was already scheduled for 2011.
Regardless of the inherited situation, Greece, the weather, etc, there are several troubling trends occurring and the administration doesn’t seem willing to tackle them. Debt versus GDP is at 100 percent. Government spending versus GDP is stalled at 24 percent (by contrast Clinton left office at an ideal 19 percent). To use the lingo of climate scientists, the administration wants credit for changing the graph from a hockey stick to a sand wedge.
It would be akin to Norv Turner’s first year as coach of the Washington Redskins. Norv took over a team that lost twelve games and proceeded to lose thirteen. Could you imagine if Turner claimed success by slowing the rate of the increase in losing? The writers of the Washington Post’s C section would never allow that to happen. But A sections across the country have run with the Nutting spin.
Of course, all of Nutting’s analysis fails to account for the election of 2010. Spending is scheduled to fall in 2013 by 1.3 percent, that is correct, but weren’t the drivers of that summer 2011 budget deal the ones who had to listen to the President tell them how irresponsible they were for not simply raising the debt ceiling as had been done many times over (duh, the blank check was sort of the problem)? Now the President wants sole credit for a deal he would have never made with the Pelosi congress.
Even the President’s own words box him in on the spending issue. The President wants to claim the mantle of fiscal hawk when it is in vogue; however, his feelings on the government’s role as economic engine were made quite clear. To laughter and applause at a February 5,2009 gathering of the House Democratic conference, President Obama doubted spending-weary skeptics of his stimulus plan by saying, “So then you get the argument, well, this is not a stimulus bill, this is a spending bill. What do you think a stimulus is? That’s the whole point. No, seriously. That’s the point.”
If the President had four years of doing things his way, do you think Nutting would have come to the same conclusion? The President seems to favor what I call “liquid soap economics.” (Crazy Troup’s Corner analogy warning) Did you know that one pump of liquid soap and sanitizer will accomplish the task you want it to accomplish? Most people pump three times, because if two milliliters are good, then six must be better. Soap companies like this because restaurants and other facilities have to reorder the product three times faster than they need to.
The point is, money printers have to keep going back to the presses to constantly keep up with the side effects of printing it. As long as certain groups are under the impression that they are better off with the printing presses turned on, they’ll endorse the spending spree. This is why there are folks out there who say the stimulus wasn’t big enough (translation: I didn’t get mine).
Accounting for recent events, the big picture is this -government a la Washington, or government a la Wisconsin? The administration was eerily silent on the Wisconsin front. Why? If he chooses government a la Wisconsin, he abandons his base. If he chooses government a la Washington, he has to give back Mr. Nutting’s golden fiscal championship trophy.
So what’s left? If you said, “Denounce the Romney record,” you win. Even so, that comes with its own risks…
Bill Parks says
Few people in government or the press, including Mr. Troup, understand the world monetary situation as well as the 13-year-old Canadian girl in a YouTube video
Privatized monetary systems are devastating national economies, like those belonging to the U.S. and the members of the European Union.
Whenever private, for-profit corporations create a nation’s currency as debt, issuing bank credit as the principal of loans, converting loan principals into currency, that nation suffers economically as interest drains financial resources from the working economy.
Privately owned Central banks, like the Federal Reserve and the ECU, create capital by simple ledger entries made with a few keystrokes on a computer, lending that capital to nations as the principal of interest-bearing bonds, and using fractional reserve ratios to multiply the money by making commercial loans to corporations, institutions and individuals. These loans must be repaid with interest. Because repaying the loans requires all of the money created by the lenders, the interest must also be borrowed, compounding the debt, creating a never-ending debt spiral, periodically doubling the total debt in the monetary system.
In the U.S. for example, the debt-based money supply is currently $57.4 trillion with an annual interest payment of $3.6 trillion (according to the internet debt clock). In ten years the interest will total $36 trillion and in twenty year $72 trillion – an amount greater than the current money supply. The U.S. debt must double every 15-20 years, or the economy will collapse.
ONLY SOVEREIGN GOVERNMENTS HAVE THE AUTHORITY, POWER AND FLEXIBILITY TO PROVIDE A STABLE NATIONAL CURRENCY. Governments can create currency by fiat, lend it like commercial banks into the private sector of their economies, spend money directly into the economy for infrastructures and helpful social programs, while fine-tuning their nation’s money supply with taxation.
The writer of the U.S. Constitution did not intend to limit the government’s authority to minting a few coins for pocket change, leaving us to borrow the rest of the nation’s money supply. The United States has no need to borrow any money because it has full sovereign authority to simply issue all the money it needs or wants.
MB Troup says
Yeah we know.
If they were going to liquidate it (“inflate it away”), they shoulda done it long ago.
Carla Massoni says
Great comments Bill. Please continue writing – your analysis was very thought provoking.
Gren Whitman says
Mr. Obama’s first term is “akin to Norv Turner’s first year ” as the Redskins’ coach?
“Liquid-soap economics”?
C’mon, Mr. Troup, we know you can do better!
MB Troup says
I love sports analogies. For some reason, that’s what I pulled. Surely there’s a better, more recent example.
Isn’t liquid soap economics ECON495 at Yale? 🙂
Steve Payne says
I like your sports analogies too and the Norv Turner was a good news, bad news period. The good news. Dan Snyder bought the team and fired him. The bad news. Dan Snyder bought the team.
BTW, I’ll take the Clinton plan anytime. The Ryan/Romney plan increases the deficit for 30+ years.
gerry maynes says
Yes mr Obamas term in office ( Rein of Terror) should not be compared toNorm Turner but per haps Casey Stengel of the 1962 Mets. MLb!s most losing team in history of the sport.Ownership recognized that he was better gate then this over the hill players were and gave him a second term in office. His team one three more games but the stands were full with happy fans both years. Yes Joe Biden does re3semble Marvelous Marv Thronerberry, perhaps the worst player ever.
Yes , hopefully the owners of team USA will realize that Mr Obama and his VP Marvelous Joe Biden are not good gate and start overt with a New Field Manager Mitt Romney. Perthaps Mr Obama and Mr Biden can get new gigs on Msbc doing play by play after opening Day.
Gren Whitman says
OR the voters will intelligently agree that Mr. Obama (and Mr. Biden) have done a reasonably good job —- given the lousy hand they were dealt and the Party of No’s unrelenting obstructionism —- and give them a well-deserved second term.
Keith Thompson says
Or the voters will realize that it’s not up to the president to fix the economy because it’s not something that a president CAN or even SHOULD do. As long as the voters (of both parties) believe that it’s the job of government to take care of them, they are not going to try and look in the mirror and attempt to fix their own personal economies. There’s not a pennies’ worth of difference between Obama and Romney and yes that’s accounting for inflation.
gerry Maynes says
Hi Keith. Sorry I do not agree with you, President Hoover felt much the same as you do. How did that work out for him? The President has the Bully pulpit. Great presidents such as FDR . TDR. and Ronald Regan used it to calm the people down and at the same time talk them into good times. Simple yes but it does work. Failures such as Carter and Obama simply don!t understand this. You have nothing to Fear but Fear its self backed up with the bank holiday was strong medicine. Reagans City on the hill and our best days are not behind us. and yoy haven!t seen any thing yet did much to get people to spend money and help reverse that recesion. In short it is leadership at the top that makes the difference. I believe that Romney can lead andf Obama has shown that her simply can!t
gerry Maynes says
Or maybe not. Perhaps the voters will agree with Abe Lincoln You can fool some of the people some of the time and you can fool some of the people all of the time, But you can!t Fool all of the people all of the time. It remains to be seen if Mr Obama and his faithful companion and side kick Hockessin Joe, can find enough folks to fool this time around. At this point in time it is not working puting the Blame on Mr Bush and the voters replaced the democratic Congress to block the President because they do not Agree with his awful policies. If they had approved the congress would have remained in Democratic hands. It comes down to this, If you can honestly say that you are better off today then you where four years ago then vote for my opponent Mr Carter. If not please vote for me next tuesday Ronald Reagan. Replace Carter with Obama and Reagan with Romney and I think the results juist migth be the same.