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Does Obama deserve a second term? (For my mom)

Posted By Russ Roberts On November 1, 2012 @ 4:29 pm In Politics | Comments Disabled

In this earlier post [1], I discussed some of the flaws in the Romney and Obama ¬†economic “plans.” I put the word in quotes here and in that earlier post because they are not really plans. They’re marketing brochures. They’re romance to make you think that if either one is elected in the next four years, everything will be wonderful–low prices, lots of jobs, and a pony for everyone. Or two ponies.

In that earlier post, I focused on what was wrong with the Romney plan. A number of people wrote me and said he doesn’t really mean what he says about China. I agree. I think it’s just talk. But in general, I don’t see my job here at the Cafe to predict what people will really do relative to what they say. I don’t have much expertise in that–you’re just as good or better than that than I am. (Other than to point out that Romney probably would find a trade war with China to be a bad idea so I do have some evidence that he’s likely just saying what he’s saying to fool people in Ohio. Somehow, that’s supposed to console me. Similarly, when Obama in the 2008 campaign said some nasty things about Canada, his economic advisor Austan Goolsbee let the Canadians know he was just kidding [2]. Enjoy that link. We don’t get to link to a Mother Jones that often here at the Cafe.)

And of course you might equally discount the “good” part of Romney’s economic plan–pledging to cut the deficit, for example, by cutting spending. Or reforming taxes to lower rates with fewer exemptions. Those too may just be talk. Who knows? That’s your call. But again, I do have some knowledge (and you do too) of how hard both of these will be. So I wouldn’t get my hopes up. Romney’s not a free-market guy by his nature. Just occasionally by his rhetoric. Other times (see China) not so much.

The rest of this post is for my mom. She thinks I was too hard on Romney yesterday. So here I thought I’d make it clear what’s wrong with Obama’s record. Not his plan. It’s as silly and pie-in-the-sky as Romney’s. But in the case of Obama, we do have some actual evidence. Sort of. He might behave differently in a second term or facing a Republican Senate, though that prospect appears unlikely.

But for my mom, I’m going to lay out what’s been bad about Obama’s economic policies in case that wasn’t clear enough.

He signed what ended up being an $820 billion spending package. He let Congress design it. A third of it was a tax rebate that had no incentive effects built into it. A third of it was a giveaway to states that had already spent too much money. Even his supporters admit the package was badly designed. That’s partly because he didn’t seem interested in designing it.

Yes, he inherited an awful mess. He’s not the first President to inherit a mess. See Reagan, Ronald. Or Roosevelt, Franklin D. Obama made the inexcusable decision to reform health care in the middle of that mess, despite its unpopularity with the American people. He signed a reform that years later is still not finished–the regulations are still being written. No one is quite sure how it’s going to work. I think it was a step in the wrong direction for what ails our health care system, but that’s almost irrelevant. “Reforming” health care in the middle of a recession in a way that leaves its specifics unspecified is a terrible misjudgment.

The UAW GM bailout and the Goldman Sachs AIG rescue were terrible violations of the rule of law. Both discouraged normal bankruptcy proceedings from going forward and put the politically powerful ahead of others in their claims on the remains. See this conversation with Neil Barofsky [3] for more on how the cronies got ahead of the ordinary folk in dealing with the financial sector. Both encouraged American companies from working harder at building relationships with their customers and instead, build relationships with Washington.

During his time in office, the Federal government has consistently spent a trillion dollar more than it takes in. This does not appear to have improved the path to lower unemployment. It may have made it worse.  He has shown no leadership in dealing with either short-term or long-term fiscal problems of the United States other than to persistently insist on raising taxes on the rich.

Raising taxes on the rich is not a horrible idea. It may be a good idea. But Obama has pursued this policy more as a moral crusade than as a fiscal imperative. (If it were a fiscal imperative he’d argue for raising taxes on everyone.) Unfortunately, his policies toward the financial sector have made it easier for some of the 1% to make even more money. As a moral issue, we should stop those policies instead of taxing all successful people.

His green energy initiative is bad policy. It has wasted taxpayer money and rewarded cronies.

The best thing I can say about the President is that he has been remarkably unimaginative and passive over the last two years. I don’t understand how his fans can abide this. Were he a Republican, he would be flayed in the press for his lack of concern for the state of the economy. (See this piece by Richard Cohen [4], who is still going to vote for him.).

So does he deserve a second term? He doesn’t.

But will Romney be better? Not if he is serious about China. Maybe not if he cuts tax rates but can’t reform those exemptions and deductions in the middle of a trillion dollar deficit while leaving spending untouched. And not if he only repeals the “bad” parts of ObamaCare (whatever they are) as he said in one talk show appearance. What’s he really going to do? I don’t know and neither do you. Too bad. That’s the way politics works in America. You get stuck with a product for four years even if you don’t like it after six months.

Mom, I hope you’re happier today than yesterday.

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URLs in this post:

[1] this earlier post: http://cafehayek.com/2012/10/who-is-worse.html

[2] he was just kidding: http://www.motherjones.com/mojo/2008/03/whoops-obama-adviser-did-talk-nafta-canadian-govt

[3] his conversation with Neil Barofsky: http://www.econtalk.org/archives/2012/09/barofsky_on_bai.html

[4] this piece by Richard Cohen: http://www.washingtonpost.com/opinions/richard-cohen-obama-the-president-who-seems-not-to-care/2012/10/29/a52246a0-21e2-11e2-ac85-e669876c6a24_story.html

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