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Oct 01 2012

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Obama’s Hollow “Closing Argument”

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A Course Without Substance

With a media-driven narrative of success dominating the headlines, Team Obama has released a new political ad that pundits-in-the-know have dubbed a “closing argument” for the Obama campaign – the kind of “positive appeal” ad that is normally released in the last week before an election. That the ad was released six weeks before Election Day points to the increased confidence of Team Obama in victory on November 6th.

In the ad, the President speaks directly to the camera, relaxed and comfortable. His message is delivered with a convincing “this is common sense” tone. It is elegant in its simplicity; thematically unified but also specific. The production is designed to be cat-nip for “low information” undecides who are trying to make their choice, and in this regard, there is no denying that the ad is persuasive.

Unfortunately for voters, the ad has very little relationship to the truth, distorting the causes for the Great Recession and Romney’s economic plans virtually beyond recognition, making a false allusion to Obama economic succes and offering select, poll-tested initiatives that sound good on paper, but fail miserably as solutions to the nation’s most pressing problems.

Sadly, it is all clever subterfuge.

Let’s break it down.

When I took office we were losing nearly 800,000 jobs a month and were mired in Iraq. Today I believe that as a nation we are moving forward again.”

That’s it.

No, you didn’t miss anything.

That is President Obama’s rationale for re-election.

Two reference points in time to create artificial context, and then a general affirmation to suggest progress. Very clever, but terribly disingenuous.

President Obama was no more responsible for the end of the Iraq war than he was for any economic recovery. The Status of Forces agreement that set the timetable for US withdrawal from Iraq was negotiated, signed and ratified by Bush administration in 2008. President Obama simply brought the troops home on Bush’s schedule – and doesn’t seem the least bit embarrassed for taking credit for it.

On jobs, POTUS is correct regarding job losses in the early months of his term. But it is hardly an accurate pivot point for reflection of what has happened since. The chart below compares unemployment in January 2009 to the most recent release for August 2012:

January 2009 August 2012 Change % Change
Civilian Labor Force 153,716,000 154,645,000 +  929,000 + .6%
Employment 142,099,000 142,101,000 +     2,000 + .001%
Unemployment 11,616,000 12,544,000 +  928,000 + 7.3%
Not in Labor Force 81,023,000 88,921,000 +8,898,000 +10.0%

In stark contrast to the President’s apparent optimism, the number of people employed in the US has barely budged (despite consistent population increases) while the overall number of unemployed has increased more than 7%. Far more striking, however, are the number of Americans that are no longer in the labor pool; nearly 9 million more, or a 10 percent increase over 2009.

There is nothing here to celebrate.

Now, Governor Romney believes that with that even bigger tax cuts for the wealthy and fewer regulations on Wall Street all of us will prosper.”

Another banal distortion of Romney’s plan that borders on caricature.

The Romney plan reduces tax rates for all Americans in return for a greatly simplified and rationalized tax code, free of special interest deductions. This resulting, predictable tax code will provide the necessary assurance for businesses to again make longer term investments in business expansion which will lead to more jobs and growth.

As far as regulations, Romney is guilty as charged, but not as Obama suggests – sotto voce – that Romney somehow seeks to allow Wall Street to run wild.

Romney has committed to repealing Obamacare the largest tax and regulatory miasma hoisted on the American people, against their wishes, in a generation. He has committed to repealing Dodd-Frank which does everything but what it was designed to do – end “to big to fail” in the financial sector. Romney is also committed to reigning in the EPA so that companies aren’t burdened by deliberate, excessive, punitive, growth-retarding policies, exercised by Executive fiat and without congressional authorization.

These Romney plans are designed to lower the cost of government, streamline oversight and promote business productivity and small business creation, all in the service of increasing employment nationwide.

“In other words he’d double down on the same trickle down policies that led to the crisis in the first place.”

Here, we finally get to the “Big Lie.”

It is an article of faith among Democrats that supply side economics was responsible for the Great Recession. The lie dates back to 2008 at least, during the debate on TARP, when then-House Speaker Nancy Pelosi took to the floor to rail against the Bush tax cuts as the cause for the crisis – a truly preposterous non-sequitur.

But saying a thing cannot make it so, and such is the case with this Democratic charge.

During Bush’s presidency, his economic policies added wealth to the US equal to the GDP of Japan, keeping unemployment below six percent. By reducing the tax on capital and driving growth, the federal deficit – with the Bush tax cuts fully phased in – was $163 billion in 2007. By contrast, President Obama has racked up nearly that total in his monthly deficits over the last three years.

Of course the indictment does not mention the nearly 20-year Democratic effort to mandate private sector credit lending policies that failed to conform to any responsible credit lending standards – resulting in the creation of the sub-prime mortgage market; a “teachable moment” on the true limitations of government. This, and Wall Street’s equally reckless effort to monetize these loans, was the cause for the crash – not a pro-growth/pro-business economic agenda.

And the President’s plan?

“First, we create a million new manufacturing jobs and help businesses double their exports. Give tax breaks to companies that invest in America, not that ship jobs overseas.”

Sounds promising, but how?

More government stimulus? We already know how that went down. $5 trillion in the hole and all we got was this lousy recovery.

Clutter up the tax code with even more special interest tax deductions? And what defines a company shipping jobs overseas anyway? Indeed, how does this policy comport with the Obama administration giving Chrysler billions of taxpayer dollars while transferring ownership of the company, to the Italians?

“Second, we cut our oil imports in half and produce more American-made energy, oil, clean-coal, natural gas, and new resources like wind, solar and bio-fuels—all while doubling the fuel efficiencies of cars and trucks.”

At times, you have to wonder how the President can make these claims with a straight face.

The “all of the above” strategy was, after all, the GOP strategy in 2008. Energy independence is a central tenet of the Romney campaign.

The President’s energy policy has been defined by ill-fated government efforts to subsidize clean energy (see Solyndra), stonewalling on the Keystone pipeline, outright hostility to off-shore drilling and a battery of EPA regulations that have all but declared war on coal fired power plants. This has not only retarded energy production, it has hurt employment.

POTUS simply has no credibility on this issue.

As far as doubling CAFE standards, you need only look at the Chevy Volt – impractical, costly, money-losing and occasionally combustible – to see the potential for commercial disaster that lies ahead for the American auto industry.

Third, we insure that we maintain the best workforce in the world by preparing 100,000 additional math and science teachers. Training 2 million Americans with the job skills they need at our community colleges. Cutting the growth of tuition in half and expanding student aid so more Americans can afford it.”

Sounds fantastic, yes? We certainly do need a better trained and adapted work force.

But this falls far short on closer examination.

There are 7.2 million teachers in the US – from pre-K to high school, including other specialties. The President’s proposal is a bit more than a one percent increase. Is 1% the critical difference? No explanation or metrics are given to evaluate whether this is the right number or even the right focus.

It is clear, however, that President Obama’s core constituency, public employee unions, will be made happy.

And the President’s proposals regarding the costs of college are optimistic but not even remotely realistic. Cut the growth in tuition in half? How? If anything, college tuition generally shows an alarming trend to rise with the greater availability of government sponsored student loans and aid.

And expand student aid? Right now the US is sitting a trillion in student loan debt. It could very well be the next big bubble as these unsecured loans cannot be serviced by graduates without jobs. More government aid will only compound the problem.

Fourth, a balanced plan to reduce our deficit by four trillion dollars over the next decade on top of the trillion in spending we’ve already cut, I’d ask the wealthy to pay a little more. And as we end the war in Afghanistan let’s apply half the savings to pay down our debt and use the rest for some nation building right here at home.”

This is simply an imaginative delusion.

The President’s calm reassurance concerning the trillion in spending that “was already cut” actually represents the components of the “fiscal cliff” that the nation faces this December, including truly punishing cuts to defense. For example, if the cuts are realized, Virginia alone would lose over 130,000 private sector defense jobs.

In addition, the President’s math simply does not add up on his supposed $4 trillion in cuts for the next decade.

$800 billion of the total comes from money “saved” from the end of the Iraq and Afghanistan wars. How can you claim savings from money that was not going to be spent? Particularly if it was going to be borrowed to begin with? Indeed, that is why Obama’s plan to use “part of the savings” from Afghanistan for nation building at home is nothing more than a creative hoax – in reality, it’s simply charging the money borrowed from China to a different domestic account.

You are not saving anything by using borrowed money for a different purpose.

All of this is particularly disheartening because CBO estimates that deficits for the next decade will exceed $10 trillion. That would mean that if we accepted every one of POTUS’ claims as valid, the national debt would still increase from its current $16 trillion to $22 trillion in 2023.

Taken in full, the ad is a prodigious sham.

It stitches together urban legends and partisan rhetoric in defense of poll-tested proposals that either lack relevance or candor, and which have only the most casual relationship to the nearly imminent, structural problems the country faces.

Missing from the presentation was even a cursory mention of entitlements – the key driver pushing the US budget towards unsustainability. Nor was there any coherent plan for economic growth. POTUS did mention raising taxes on the wealthy, but failed to note that even under the best case scenario, those taxes will raise only $44 billion a year – an amount less than five percent of the anticipated deficit over the next decade.

This is the President’s final argument?

The media elites, already star-struck by Obama, are nearly rapturous in their praise for this “closing argument.” But under the harsh light of reality, the ad unintentionally proves the true vacuousness of the President and his Administration.

Far from a closing argument to frame a winning campaign, the ad is, ironically, the best evidence against an Obama second term.

 

 

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