Obama's Vacation from Economic Reality

Why the president's jobs "pivot" is headed for a dead end.

Two and a half years after the election, after the imposition of a heathcare plan, a Fin Reg bill, two rounds of quantitative easing, and one gargantuan stimulus plan, President Barack Obama is once again promising to "pivot" towards job creation. To say most Americans are less than enthused might be an understatement. Last week the president's approval rating dipped to 39 percent, the lowest rating of his presidency so far. Yesterday, the president said he will present a plan to Congress -- after Labor Day. Prior to that he will be embarking on a vacation to Martha's Vineyard, after "a busy and productive July," according to a White House spokesman.

One can only wonder what constitutes busy and productive in this president's mind. On the most pressing issue of that month, the debt ceiling debate, Mr. Obama's entire contribution consisted of throwing a last-minute road block in front of House Speaker John Boehner, when Mr. Obama demanded another $400 billion in higher taxes in exchange for deficit reduction. Negotiations aside, Boehner revealed something far more telling. “Where’s the president’s plan?" he asked. "When’s he going to lay his cards on the table? This debt limit increase is his problem, and I think it’s time for him to lead by putting his plan on the table, something that Congress can pass,” he said, when a debt ceiling deal was still very much up in the air.

No presidential plan was forthcoming. The House and the Senate hashed out a deal and the president signed it in a somber affair at the White House Rose Garden. In his ensuing speech, the president promoted the same job-creating talking points that have been the staple of his administration. Charles Krauthammer offered a devastating assessment of those points two days after the speech:

An index of how spent he is sort of intellectually on the issue of jobs is the campaign speech he gave today, the fourth in 10 days, in which he pivoted, he did his pivot, and he announced five initiatives. Listen to them. Payroll tax extension: We already have that. Unemployment insurance extension: Already have that. Trade deals: He's had it for two and a half years and done nothing. Spending on more infrastructure: a perennial--you know, more dams, more bridges and roads. And the last one, I love that. Here's the real new one that will get us out of our doldrums: patent process reform. Now that I think is the key to economic explosion, getting us out of 9 percent unemployment.

Krauthammer then cut to the essence of Mr.Obama's policies. "He did a huge Keynesian gamble, and it failed," he concluded.

On his current bus tour of the Midwest, Mr. Obama proposed more government solutions to the nation's problems, most notably a rural jobs initiative plan, which consists of "bringing new capital, job training, and additional investments to our rural communities," according to Agriculture Secretary Tom Vilsack. Leftist economist and former Clinton administration Labor Secretary Robert Reich was unimpressed. "They're worth doing, but very tiny compared to the size of the problem we face: the huge shortfall in consumer demand and unwillingness of business to create enough jobs when consumers aren't able to buy," he cautioned. "The White House must do more than come up with policy miniatures."

Unfortunately, that miniature was the high point of the trip. The descent was rather abrupt, highlighted by Mr.Vilsack, who contended that the SNAP program, aka food stamps, is an economic stimulus. "Every dollar of SNAP benefits generates $1.84 in the economy in terms of economic activity," Vilsack said. "If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It's the most direct stimulus you can get in the economy during these tough times," he said.

As more than one pundit has pointed out, if such were the case, it would make sense to put every American in the country on food stamps.

Yesterday in Atkinson, Illinois, Mr. Obama was forced to deliver more bad news. "It will probably take this year and next year for us to see a slow appreciation again in the housing market," he told the crowd. What was to blame for that? Banks who were hoarding cash instead of investing it. An "inexcusable" debate over the debt ceiling, and a group of unnamed politicians "who sign anti-tax and other pledges," according to the president.

This was a temporary deviation from his more familiar excuses, as in "an earthquake in Japan, the economic headwinds coming from Europe, the Arab Spring and the rise in oil prices" he referred to in his Rose Garden speech. Excuses the president was more than happy to reiterate on Tuesday in Decorah, Iowa. He then offered the crowd this rather startling assessment of his administration's economic acumen. "We had reversed the recession, avoided a depression, gotten the economy moving again," he claimed. "But over the last six months we've had a run of bad luck."

As for that which resides beyond the boundaries of bad luck, Mr. Obama was eminently predictable and pejorative. "The problem is that we've got the kind of partisan brinksmanship that is willing to put party ahead of country, that is more interested in seeing their political opponents lose than seeing the country win," he said. "Nowhere was that more evident than in this recent debt ceiling debacle." Mr. Obama has a short memory. His healthcare plan was passed without a single Republican vote, is still despised by a majority of Americans, and remains an economic "headwind" in its own right.

Perhaps sensing that amorphous rhetoric with respect to job creation has a rapidly diminishing shelf life, a senior administration official told The Associated Press that Mr. Obama's post-Labor Day jobs pivot would contain "fresh" proposals, "not a rehash of plans he has pitched for many weeks and still supports." One of those fresh proposals, according to The New York Times, was the possible merger of "the Department of Commerce, the Office of the United States Trade Representative and some economic divisions at the State Department into a new agency," one which might be called the "Department of Jobs or the Department of Competitiveness."

That article was posted on August 13th. On August 16th, Reuters asked the president to verify the report. "That is not true," replied Mr. Obama.

One might think such conflicting reports, the predictable litany of excuses for the country's economic malaise, and yet another undefined plan to be delivered after yet another vacation would indicate a crisis of credibility for this president. One would be right. Senate Republican Leader Mitch McConnell led the charge, sending around a list of eight other jobs speeches the president has given. It was entitled "here we go again." Republican presidential contender Mitt Romney was equally sarcastic. "It's too little too late, but we appreciate the fact that he's going to devote some time to it. Not just going to be on the bus tour, not just going to be vacationing in Martha's Vineyard, but giving some thought to the American people," he quipped. Romney had previously dubbed the president's Midwest bus trip the "Magical Misery Tour."

House Speaker John Boehner probably got closest to what most Americans want. “It is my hope the president will offer specific proposals that depart from his previous policies and allow us to find common ground and work together to put Americans back to work,” he said.

And in a somewhat surprising development it wasn't only Republicans who questioned Mr. Obama's credibility. Congressional Black Caucus (CBC) member Rep. Maxine Waters (D-CA), speaking at a CBC event in Detroit on Tuesday, delivered an ominous message to an administration which undoubtedly expects the same monolithic support from black Americans in the upcoming election it received in 2008. After telling the audience the CBC doesn't put pressure on Mr. Obama because "you love the president," she expressed her frustration. "The Congressional Black Caucus loves the president too," Waters said. "We're supportive of the president, but we're getting tired, ya'll. We're getting tired."

Waters continued. "And so, what we want to do is, we want to give the president every opportunity to show what he can do and what he's prepared to lead on. We want to give him every opportunity, but our people are hurting. The unemployment is unconscionable. We don't know what the strategy is. We don't know why on this trip that he's in the United States now, he's not in any black community.  We don't know that." (The unemployment rate in general is 9.1 percent. For black Americans it's 16.2 percent.)

Perhaps it hasn't occurred to Ms. Waters that a president who got 95 percent of the black American vote in 2008 may not be feeling any undue pressure to be in black communities at this point in the 2012 election cycle. Perhaps he will soon. "When you tell us it's alright and you unleash us. And you tell us you're ready to have this conversation, we're ready to have the conversation," Water assured her audience. "When you let us know it is time to let go, we'll let go," she added. Judging by the crowd's reaction, it's time.

Unfortunately for Ms. Waters, the Congressional Black Caucus, Democrats, Republicans and every other American, Mr. Obama is in no rush to engage in that conversation. Labor Day 2011 will be celebrated on Monday, September 5th. "Shortly after that" is when the president is scheduled to release his plan. For those Americans with a job and/or economic security, the ensuing three-plus weeks will be a chance to enjoy the waning days of another summer season. For the 25 million un- and under-employed Americans, it will be more of the same ongoing struggle many have endured for almost three years -- and yet another exclamation point on the idea that this president is completely out of touch with ordinary Americans. The very same Americans he ostensibly endeavored to "connect with" on his bus tour.

And despite the president's contention that "everything will be on the table" when he gets around to details, one of the items he revealed as a possible part of his upcoming plan was, according to Fox News, "deeper savings down the road to pay for a bigger jobs program now." In other words, yet another Keynesian economic stimulus program -- paid for with yet another pile of deficit spending.

Is America "shovel-ready" for more of that?