Whip Uncertainty Now: An Exit Strategy from Obama's Economy
A football coach once advised, "When you have had a losing season, talk about the band." Last night President Obama seemed to be following that guidance. As much as his dwindling base love American withdrawals from anywhere, he had to commemorate whatever happened this week in Iraq. Even though he really wanted to address the economy, he had nothing good to say about it, so he praised the troops.
With that chore completed, Obama will now, once again, as the White House parlance goes, pivot. This past Sunday on CNN' State of the Union, Housing Secretary Sean Donovan at least four times referred to the Obama Administration focusing, or having focused, or preparing to focus "like a laser beam" on some element or other of our sick economy. But, what is a President to do?
The liberal pundits are telling Obama to double down on old-fashioned soak the rich, redistributionist, hyper regulatory, populism and maybe hire crony capitalists from the corporate side like Geoffrey Immelt to replace crony capitalists from the government and non profit side like Timothy Geithner. A representative sample is Jonathan Alter, here doing his best Bob Shrum imitation: "...name Elizabeth Warren to run the new Consumer Financial Protection Bureau... boil down the choice for voters to its essence: rebuild America or more tax cuts for the wealthy."
In the same piece Alter says the brilliant David Axelrod who conducted the most brilliant presidential campaign in history and thereby elected the brilliant...etc, has a hunch that the problem is that Obama has not been talking quite as much about himself lately:
"...The personal narrative has faded. ‘Into that void comes mischief,' Axelrod concludes. ‘He hasn't talked as much about himself since becoming president, and maybe that's a mistake, but it's not an irreversible one.' One way to get personal, the White House believes, is in nontraditional media like ABC's The View and late-night talk shows." Or maybe, have Obama conduct a prime-time tour of the renovated Oval office on ABC's Extreme Makeover, Home Edition?
Eleanor Clift offers a succession of incandescent insights that demonstrate just why Newsweek has earned the stature and success it enjoys currently: "There's nothing wrong with Obama that a better economy wouldn't fix. Clinton had it right in '92, it's the economy, stupid. Obama's critics on the left were right when they warned that he did not act boldly enough. A president has limited tools at his command in a market-based economy..."
Never have the blind led the blind so inextricably into a dialogue with the deaf. But there is hope. Richard Epstein in Forbes offers a non-macroeconomist's way out - recognize that the problem is economic uncertainty and address it.
Here is one agenda: reduce the level of economic uncertainty by getting government out of the stop and go business once and for all. What is needed are stable economic policies that work as well in good times and in bad ones, so as to remove the need to articulate and implement some nonexistent exit strategy.
There are only two ways to do this. The first is a set of permanent tax cuts on capital gains and high incomes, which will give our most productive individuals the incentive to invest and innovate that they so sorely lack today. The hostility of the Obama administration to these moves right now causes more harm than any public stimulus program can undo.
The second approach, on which Tyson and Krugman take a seeming vow of silence, is major deregulation to stimulate growth, while cutting wasteful government expenditures. No single regulatory program has the general pop of a sound fiscal or tax policy. But the cumulative effect of countless bad policies exerts a profound negative effect on both employment and growth.
Add to this the repeal of Obamacare and Dodd/Frank, and eliminate any talk of cap and trade and CO 2 regulation. One hopes Obama and is friends will do it, but if not here is a Republican legislative agenda that can be justified as a strategy to cure the real ill that plagues our economy-pervasive and debilitating uncertainty.