President Obama should put Adam Smith's "The Wealth of Nations" at the top of his summer reading list.| Don't be silly. The man doesn't read, he merely carries around the right sort of books with his finger marking a random page, and the title carefully turned toward the cameras. |
| The economists he parrots misread Keynes, so no point in going there, either. |
| The honourable gentleman |
The president spent nearly an hour demonizing his Republican opponent Mitt Romney's economic policies and doubling down on his own failed agenda. He called for higher taxes on our most productive citizens and successful small businesses, more government spending and debt, and Washington micromanagement of wide swaths of the economy.
Instead of doubling down, Mr. Obama could have seen his party's 2010 midterm defeat as a message from voters to move to the center, announcing that his vast expansion of government was temporary and necessitated by the financial crisis and deep recession.
That's similar to what President Clinton did after his 1994 midterm rebuke that swept Republicans to control of Congress and led to bipartisan agreement to balance the budget and reform welfare. Mr. Clinton won re-election handily.
Here are four things the president could have proposed (but didn't) to remove headwinds to growth and instill confidence in the economy:
1) Avoid the 2013 "fiscal cliff," which the Congressional Budget Office says would put us back in recession, by extending all the Bush tax cuts for one year (leaving him free to pursue his tax hikes on the "rich" later).
| He can always do that after he's reelected -- the bill will be popular on both sides of the aisle. And if the voters choose otherwise, the punishment for their temerity will be swift and painful. |
| But before the BP incident, weren't they slow walking the paperwork? How would that be better? |
4) Invest political capital to energize the moribund Doha Round of global trade liberalization and bilateral free-trade agreements.
By taking these four steps, the president would have given the recovery a greatly needed boost and encouraged more businesses to invest and hire. He may well look back on this missed opportunity to move toward the middle as the mistake that ultimately cost him re-election.
| More likely he will reflect on the stupidity of the voters who completely failed to appreciate his peculiar genius. |
Is it any wonder that recent polls show the majority of Americans disapprove of the president's economic policies and are asking why his explosion of spending and debt has done so little good. Mr. Obama claims that when he took office nobody knew just how deep this recession really was. Not so. I and other economists said it was going to be the worst recession in a generation, and immediately after the 2008 election urged him to temporarily set aside his big-government social-engineering agenda, from energy to health-care reform. Whatever their pros and cons, it was the worst possible time to add such a cost burden and uncertainty to the economy. He was mistaken in the hope the economy could withstand his change.
In 2009, 2010 and 2011, the administration forecast average economic growth of 4% in the next two years. But the economy has not had even one quarter of 4% growth during Mr. Obama's stewardship. Rather, our economy has experienced its longest string of consecutive quarters of economic growth below 4% since World War II. Growth has averaged 1.4% in Mr. Obama's first 13 quarters as president.
His record on jobs is just as bad. Mr. Obama's initial forecast claimed unemployment would never reach 8% if his $800 billion stimulus bill passed in early 2009 (as it did) and would now be below 6%. That's off by 3.9 million unemployed workers, millions more if we include those who have given up looking for work.
Perhaps we should not have expected more from the eloquent apostle of hope and change. Mr. Obama had little experience in or respect for the "for profit" part of the economy. Of his one brief sojourn in the business world, he says in his autobiography he felt "like a spy behind enemy lines."
He now says that Mr. Romney's business career--which former President Clinton describes as "sterling"--is not a qualification to be president. How would he know? Before becoming president, he had no executive experience of any kind--private or public.
| Ouch. |
Last month Mr. Obama said, "Since I've been president, federal spending has risen at the lowest pace in nearly 60 years." But it turns out he was quoting a blogger who did not count the massive 2009 stimulus spending. Careful administration fact-checking served former presidents well. Is this administration's standard no longer facts but anything on the Internet?
| Double ouch. It doesn't sound like the writer will be voting to reelect the president in November. |