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Evaluating Obama on the Economy – Prevailing Criticisms Lack Perspective

Evaluating Obama on the Economy – Prevailing Criticisms Lack Perspective

While weighing in about the Republican National Committee’s potential ‘Reagan Purity Test’ for its candidates, I focused primarily on its fiscal policy implications.  Primarily, I took umbrage to the notion that aspiring to emulate the policies of ‘Reaganomics’ was in any way wise.  That Reagan’s economic policies were foolish — broadly speaking, reducing taxes while increasing spending — there can be no doubt.

That being said, it’s important to maintain perspective when criticizing a president’s fiscal prescriptions.  Too often, the effects ascribed to presidents and their economic policies are disproportionate to the actual power they wield.

The perception that an American president can snap his fingers and fundamentally alter economic realities is misguided.  However, this perception is understandable considering the present state of infotainment masquerading as news on televisions and radios nationwide.  Something as huge and complex as the American economy can not be understood in this manor.

Indeed, the complexity of the economy is such that the sound bite analysis offered in “news” reports only serves to muddy the waters.  The vast majority of Americans are not economists, and I am no exception.  However, I, like so many others who have spent time in college, have been provided with useful metaphors that can help us keep it all in perspective.

In the paragraphs that follow I’ll attempt to impart one such metaphor.  Please be aware that my effort to do so is not an attempt simplify the economy as a whole; rather, it is lens to assist the non-economist’s viewing and understanding of the hyperbolic analysis of pundits.

I must admit that I found my brief exposure to the study of economics as an undergraduate as monotonous.  However, when the professor delivered her lecture on fiscal policy, she employed the sport of curling as a metaphor in explaining the limits of presidential power in the economic arena.  For whatever reason this stuck with me.

If you’re unfamiliar with the sport, here’s a quick glance.  (Continued below the clip.)

In curling, the brush is used to maintain the stone’s momentum by melting a thin layer of ice in its path, reducing friction.  A brusher can alter the stone’s direction, but unable to apply a direct influence upon it, this ability is very limited.

It isn’t a perfect metaphor, by any means.  For our purposes, imagine the economy as the stone already in motion, its momentum and direction affected by the policies of previous administrations.  The administration, then, is the one of the players working the brush, not so much to get the stone to stop in a specific place, but in an effort to maintain its momentum toward measured economic growth and full employment.

Consider President Obama as the brusher, his initial economic stimulus package representing him furiously working the brush.  Obama’s progressive critics would say he isn’t working the brush hard enough.  They argue that the stimulus package was helpful, but insufficient.  The New York Times reported Nov. 20 that there’s broad agreement among economists that this is a fair assessment.

Conversely, conservative critics argue that Obama should slow his brushing, or stop it altogether.  Considering  how Republicans handled the brush when they were in control, the motives for their criticisms — that Obama should be cutting taxes and paying down debt — become suspect.  Of course, this is an easy argument to make when your party lacks control of the White House, and the debt in need of paying down was created by Obama’s predecessor.

George W. Bush thought it wise to lower taxes while making little or no effort to control government spending.  Bush’s administration managed to make matters worse with the invasion of Iraq.  No matter where you stand on the legitimacy of the war, you must admit that its expense was miserably handled.

Returning to the curling metaphor, Bush’s dismal economic performance, combined with neutered regulatory oversight, amounted to ditching their brush in favor of a spade.  They dug a trench in the ice leading away from the target, slowing the stone’s momentum and making it more difficult for future administrations to correct.

Criticism of the former administration is notoriously absent in conservative criticism of Obama.  They’re quick to declare Obama’s efforts as failing or failed, simultaneously advocating for remedies that would ensure his failure.

That Obama has made any progress on the economy is universally dismissed by right-wing pundits.  Instead, they have curiously taken to insisting that Obama is radically “raping” America.  Like the conservative policies which brought the U.S. economy to its most recent low point, their hyperbolic analysis has nothing to do with improving the economy.  It is intended to craft and solidify the perception among conservative voters that their candidates could do better.  For them, it is about power, not progress.

While progressives are also critical of Obama’s economic policy, their criticism is infinitely more constructive.   For a good example of this, check out William Greider’s Nov. 23 article at The Nation.  Greider effectively illustrates the progressive viewpoint that Obama has thus far been too pragmatic in using the economic powers at his disposal, regardless of their limitations.

Of course, you will not find any curling metaphors in Grieder’s analysis.  As I indicated above, this metaphor’s usefulness is in managing expectations of fiscal policy impact.  That even if Obama were to follow Grieder’s advice, we shouldn’t expect a rapid economic recovery to commence.  To do so would be just as unrealistic as the outrageous Obama-is-raping-America meme advanced by right-wing pundits.

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Image from flickr.com user, abraaten, by way of CreativeCommons.org

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51 comments

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9:59AM PST on Dec 4, 2009

Yeah. Taxes, regulation, and directed economies work well-ask those with them.

Obama has committed virtually every possible mistake that a politician can do regarding economic policy. At a time of dwindling tax revenue, he outspends all but LBJ/FDR. He adds more to the deficit in less than a year than Bush did in 3. The money spent goes mainly to areas with political need rather than economic needs. Much of the money is slated to be spent during the time before his presidential reelection campaign. He proposes additional taxes on business/the "rich"-the same people who create jobs in the economy. He proposes huge new entitlement programs that will dwarf his previous spending and that will stifle US industry/saddle consumers with energy taxes.

Frightened by polls he decides to have a photo op about a job summit. The only thing he'll talk about is tax rebates. Kind of a sideways admission his current tax ideas are flailing...

Grade is F but what do you expect from a president and cabinet who have virtually no experience in the private sector they want to control so much?

9:42AM PST on Dec 4, 2009

Thanks for the info.

10:53AM PST on Dec 3, 2009

good article

6:41PM PST on Dec 2, 2009

Tonie, you touch on two subjects in my comment; my so-called speculation that the U.S plans on permanently occupying both Afghanistan and Iraq, and my accusation that civilians did not die accidently at the hands of our troops.

To respond to your first argument about permanently occupying these countries, it is not speculation on my part. The invasions of Afghanistan and Iraq, along with a planned invasion of Iran are all covertly spelled out in a plan known as PNAC, the Plan for a New American Century, signed off by Dick Cheney himself along with Donald Rumsfeld, among other important signatures.

In terms of targeting civilians, last year there was a conference known as the Winter Soldier conference where they had American soldiers giving testimony as to what they personally did and what they witnessed in Iraq, and what they described publicly wasn't pleasant to listen to. This is just the tip of the iceberg in terms of testimony by witnesses of atrocities that took place in Iraq by American forces.

Everyone says let's give this time. Let's see who's right. The problem with this is that if I am proven to be right come 2011, and Iraq and Afghanistan remain occupied nations, the cement will have hardened and it will be impossible to go back, to undo the damage. And the damage to this country economically speaking will make today's economy look like boom-town.

12:41AM PST on Dec 2, 2009

Aaron
Our pres. was taking his time to make this decision and look how the Republicans were a getting ready to nail him for this as well...sending in the additional troops were requested by the generals over in Afghanistan...either direction he would have gotten on the firing line...and more over there will help insure that at least they might have someone protecting their backs and as for the war continuing due to the amount troops and equipment additionally being taken into...removal is not all that difficult...my son in Desert Storm...450,000 and equipment moved out quite quickly and fast from Kuwait...all knew then that we would be back to finish it...for we didn't finish the objective then,..Hussein...and we also killed some of his family members a looking for him, so he had an axe to grind with us...for helping Kuwait get from under his take over of them...I don't understand how we as a nation forgets so much, so quickly if we aren't personally involved in it. The propaganda conspiracy stuff supposedly being instituted by our government against us, is only adding more stress to all lives already stressed...so surprized am I that all sites are full of the propaganda and either not knowing that it all goes global all over the world, or not caring as if that is the intent...all this stuff is doing is putting all Americans, rather military or not in danger..What is sad is the fact that a hand full creates the war due to noncompromises and all pay for it.

12:21AM PST on Dec 2, 2009

Harold
All that you wrote is purely speculation on your part and doesn't serve to calm anything or anyone down at all. We have no interest in Afganistan for did you not follow what Hillary stated in Afganistan that if they don't assist that we are a pulling out of it all together...
before we get their forces adequately trained...one thing all are not a remembering is that the reason we hadn't got Bin Laden yet, was due to the training he got from America...
Yes, we do have military bases over there...that is a common given , had are they elaborate and one that will stand the test of time...no...all that I know that has been sent to either or, state it is a hell hole...
I also don't feel it is right for you to state that civilian deaths are not accidental...as if to imply that our soldiers over there would out right go and slay others...I say until Iraq and Afganistan openly assist our troops and all the other allied troops, yes it will remain hard for then to correctly hit those wanting to hit not only us, yet their own not on their same page kind of thing.
Trust on both sides of the gambit is at hand here and yes I understand about Russia laying the premise for the Afghan lack of trust.
Afghan and Iraq were war torn countries before we got there and I pray won't be when we leave, yet I heard 4,000 years of wars between themselves and now wanting better play ground space with us, 9/11?
just my thoughts take what you want and do please leave the rest. Please GBU

11:58PM PST on Dec 1, 2009

Dear Carole:
Lack of jobs was due to NAFTA -Clinton-Gore, CAFTA-f.p.Bush Jr., and I agree a return to jobs, yet I don't know about industry jobs...I believe we are headed towards a more high tech. kind of country...yet what we can do is as one of my clients stated, tax those American companies that followed the cheaper salaries, and tax breaks of other countries, tax their products coming back into America as a way to subsidize job losses and feed it into education that f.p. Clinton were he thinking outside of the box, would have headed us prior to getting us to throw the baby out with the bath water...know what I mean?
I also understand what you mean about throwing Beneke and others you mentioned out as well...yet I feel that our president knew that he had a horrendous job ahead for him and he had to have somebody that knew what the dickens of a mess he was in and how to find our country's butts out of the wet paper bag we all were in...
Many Republicans stated that McCain lost the election due to his choice of S.Palin...I believe he lost it two weeks before our country fall down when he told I believe either Harry or Mike Wallace when pin pointed down with the question..."how is our country really doing?" and he stated, "just fine."
For no one can have hope and trust in one to lead the nation when he had what 28 years in office then?
If those closest to the president, doesn't have a handle on things...thus I believe he felt it was the wisest choice then.

9:05AM PST on Dec 1, 2009

I think Obama would be doing a lot better at getting the economy back on track if he got rid of Geithner, Summers and Bernanke. They were partly responsible for the deregulation of the banks during the Clinton administration that went a long way in causing our present debacle.

No one mentions the fact that Americans just don't make enough money anymore. Our economy is 70% consumer driven, and when you export so many jobs, especially manufacturing, and replace them with low-wage jobs, people have to rely on credit to just keep up.

Banks and other big businesses have to be tightly regulated, we have to start making things again and we need to get rid of unfair trade agreements, like NAFTA. There should be a moratorium on legal immigration and the H1-b visas should be discontiunued.

As for blaming the Democrats, since WW II the only presidents that have lowered the deficit were the Democrats. Every single one of the Republican presidents raised the deficit while in office. Look it up if you don't believe me.

We need to stop the war in Afghanistan and rescind the Bush tax cuts for the rich. It is a myth that lowering taxes creates jobs. The 50s and 60s were the most productive decades in our history and the rich had tax rates from 70% to 90%. With their tax shelters, they paid an average of 50% in taxes. The present tax cuts make up about 1/3 of the deficit and prevent government spending for things the country needs, such as health care and infrastructure improveme

8:28AM PST on Dec 1, 2009

One of the difficulties in addressing economic issues is the number of other issues that need to be addressed. Almost all the comments on this thread deal with Afghanistan.

Getting back to the economy, and dredging up Bush #1 as Jerry Greer did, Bush didn't get re-elected because he broke his "read my lips" pledge. He broke it because he didn't have the guts to veto the budget drafted by the Democratic Congress that sent him a bill that raised taxes. He signed it to prevent the Fed Gov't from being shut down and lost the next election as a result, almost like the Democrats planned it that way. Had he vetoed and held to his pledge, he might have been reelected. No surprise from the guy who labeled Reaganomics as Voodoo Economics.

Bush working with Congress expanded the deficit and the debt. It has done nothing but expand since. Clinton wasn't bad, particularly after the 1994 election ended one party control of Washington.

Not a Republican, or a partisan, just your average limited gov't kind of guy. Economic revisionists tend to be partisan, R or D, but with everything Obama, Reid, Pelosi, Frank, and Dodd are doing, why argue? Just sit back and we'll see how things go.

Still waiting for the data and charts that indicate taxes only go up when rates go up. Still waiting for someone to say the wealthy pay a lower portion of taxes now than then. Still waiting for someone to say that all economists agree that there is "no doubt" that Reaganomics didn't work.

8:08AM PST on Dec 1, 2009

Roger, I really do not mean any disrespect as to your contention that we are sending in additional troops to help train the Afghan army and police force, but you have been deluding yourself. You actually believe that the U.S. has honorable and noble intentions in Afghanistan and you actually believe that we accidentally killed innocent civilians. We, like the Soviets, are supporting a puppet government of the United States in Afghanistan. Hamid Karzai is jumping through our hoops. The additional troops thatw e are sending in to Afghanistan will be added troops kicking in the doors of Afghan civilian homes in the middle of the night, terrorizing families and even arresting innocent peopleand detaining them without trial or legal representation. The people that are fighting us in Afghanistan are not terrorists and they are not all Taliban. They are Afghans who want us out of their country. In the very same way that I would take up arms against any force that invaded our country, the Afghans are just doing the same. The U.S. has no intentions of ever leaving Afghanistan, or Iraq for that matter, unless we are literally kicked out by the insurgents. We have built many permanent American military bases in both countries that we intend to use, and we have built, illegally I may say, huge abortions of American embassies in both countries. Don't fool yourself into thinking that we are there for noble reasons. We are not!!

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