Obama: New Plan is on its Way!

The Dow Jones Industrial Average dropped like the old proverbial rock yesterday and who knows about today. Short term swings are not troubling but long term trends are. Since peaking some weeks ago, the DJIA has reflected global troubles, particularly in the European bank sector, and a loss of confidence here at home. The President has been out on a campaign bus swing, berating the Tea Party and Republicans in general. Now he is taking a vaca among high income taxpayers. If only the country had followed the lead of the President as he reminds us, we would all be in high cotton with the birds singing. Oh, I thought that is what was done in the last Congress with health care expansion, financial restrictions and the so-called stimulus. Silly me, I forgot about the Arab Spring, hurricanes, earthquakes and the other things to blame. 

The President has announced he would give a major address after Labor Day to present his plan to stimulate jobs, raise taxes on the chosen ones and reduce the deficit. I think I have heard this all before. Wasn’t there a big time economic speech in April? And, what has the Administration been doing all this time, like the last 3 years? But now they promise some “new ideas.”  For what are the waiting?

I am one of those few that believe government cannot always positively push the national economy around. In fact, usually government only does harm by its actions rather than promote job creation.  I do recognize like Adam Smith did more than two centuries ago that there is a role for government to prevent excesses in the market in the capitalistic system but there has to be a balance. We have long ago past that balance.

The Administration's economic brain trust is working we are told on "new ideas." It has been reported the Administration wants to extend the Social Security Employee 2 percent tax reduction for another year. That is a good idea but not new. They want to propose more infrastructure projects but that is not new. I hope these are not the same shovel ready ones. This used to be a good idea but the budget situation makes this problematic. Then there is, of course, the costly extension of unemployment benefits that is not new. I have sympathy here for those souls who are been out of work but not sure how long this can go on? How many weeks is enough? Until after the next election, I suspect. Maybe some more trade assistance programs, the usual training programs and the kitchen sink. Plenty of time to grade the President’s “new direction’ after it comes out. Wonder if there will be anything in writing? I also wonder how all this spending and “new ideas” dovetails on the need to reduce the Federal deficit.

In addition to new “stimulus”, there are the tax issues.  Positions are well known but this matter is in the hands of the new Super Committee and it is doubtful there will be anything startling on taxes and revenue (despite Warren Buffet’s generous offer) come out- not enough time, consensus and political flexibility. Taxes will be a 2012 issue with most of the rhetoric on the expiring cuts at the end of the year. No better election issue has been made in some time.

The President’s poll approval ratings reflect the equity market. His reelection has to be in question despite favorable demographics, total allegiance to him by Democrats, perceived weak opposition, massive political funding and the power of incumbency. The erosion of approval and lack of confidence in the Administration’s policies has been startling. I am not sure this can be overcome in spite of the advantages but it is early.

What should the Government do? First of all, the Administration should stop blaming everyone and take responsibility for its policies. It should stop class warfare and come up with policies that do not regulate business out of existence. He needs to be reminded that in capitalism, the private sector creates the jobs. The President needs to be reminded also he is President of all the people, and we as a nation rise and fall together. If he fails to do this, then he seals his own fate and the overall welfare and standing of the country, at least until 2013.

 

 

Comments

[Beekeeper]

I think this guy is toast if things do not turn around soon. Mickey Mouse would beat him if there is a double dip or UR goes back over 10.