Obama Reprises 2008

In what was initially billed as a major economic speech, President Obama took to the podium in Cleveland this afternoon and gave a highly political speech that invoked the language of his presidential campaign at every opportunity.

From the very start, Obama recalled a late campaign stop he made in Cleveland in the fall of 2008 and said that election was about the failed economic policies of Republicans. He then moved on to attacking House Minority Leader John Boehner — essentially a stand-in for Bush. Yet this is an odd choice politically given that a new poll shows most Americans don’t even know who Boehner is, let alone have an opinion.

Even rhetorically, Obama recycled from his campaign — talking about overcoming cynicism and framing a choice between hope and fear.

In 2008, Bush was in power and his policies were highly unpopular, so Obama had a receptive audience. This time around, however, Democrats have total control of Washington, and have pursued policies overwhelmingly opposed by the American people, and those policies have failed to solve the problems Obama was elected to fix. So what seemed fresh in 2008, just two years later, has become a stale routine that is unlikely to resonate with voters.

It comes as no surprise that the Cleveland Plain Dealer reports:

With less than an hour before President Obama’s scheduled speech, 75 seats remained empty in the recreation center at Cuyahoga Community College’s Western Campus.

So organizers went around campus and recruited more students to fill the seats.

From what I could tell watching on television, the reaction of the crowd seemed rather tepid.

The Daniels Payroll Tax Holiday

Indiania Gov. Mitch Daniels, who has been mentioned as a possible 2012 presidential candidate, proposes an emergency one-year suspension or reduction in the payroll tax in today’s Wall Street Journal to spur job creation. It’s an idea that I also floated during the initial economic stimulus debate as an alternative to Democrats’ focus on government spending.

A reduction in the payroll tax would boost the economy in several ways. Like any reduction in taxes, it would mean that individuals would be able to keep more of their earnings, and thus have more money to inject into the economy. But the unique aspect of the payroll tax is that it’s also paid by employers — it is, in fact, a tax on employment. If you were to lower or eliminate the payroll tax for a period, it would make it effectively cheaper for businesses to hire new workers, or to at least maintain their current workers, until the economy improves. Keynesians have traditionally opposed the idea of a payroll tax cut because they believe that in a bad economy, people would save more of the additional money they’d be taking in, and so they prefer to have the government spend the money.

The federal government collected $891 billion in payroll taxes in 2009 and is projected to take in $862 billion in 2010, according to the Congressional Budget Office. That means that a full one year holiday would, in monetary terms, be something along the lines of the economic stimulus package, which cost $862 billion.

In his op-ed, Daniels proposes a number of ways to make up for the lost revenue from the payroll tax holiday. The lowest-hanging fruit would be to use unspent stimulus and TARP dollars. Though according to Pro Publica, only $134 billion in stimulus remains unspent and uncommitted, and remaining TARP money, at least in theory, is supposed to be put back in the treasury for deficit reduction.

But Danleis has a number of other creative ideas that are a bit fresher. He proposes giving the president the power to spend less that Congress appropriates, a power he has used as governor to maintain a balanced budget and AAA credit rating for the state. He suggests a federal hiring and pay freeze, or even cut, as federal pay “vastly outstrips private-sector wages…”

Congress would have had much more money to play with had it not wasted money on the failed economic stimulus to begin with, but the idea of a payroll tax holiday — or at least reduction — is still worth considering as a means to boost employment.

Obama Follows The Bush Script

One of the most prevalent criticisms of President Bush was that he wouldn’t acknowledge that he made mistakes and thus stubbornly refused to alter his decisions based on new information. This charge was most prominently associated with his policy in Iraq. During the campaign, Barack Obama attacked John McCain for having a similar trait.

“We’ve seen this movie before,” Obama said at a May 2008 campaign event. “A leader who pursues the wrong course, who is unwilling to change course, who ignores the evidence. Now, just like George Bush, John McCain is refusing to admit that he’s made a mistake.”

Obama, we were told, was more self-reflective, substituting Bush’s coyboy swagger for sober introspection, which would allow him to admit error. However, with his political standing continuing to erode, President Obama is demonstrating the same type of intransigence that he once criticized in Bush.

Instead of acknowledging that the $862 billion economic stimulus package was a dismal failure that did not produce the promised four million jobs, his administration continues to tout it as a major success. Now, he’s announcing plans for yet another round of government spending, making the same arguments that he made when selling the original plan.

In addition, the New York Times reports that Obama is going to dig in on raising taxes on those earning more that $250,000 a year, even though many of them are small business owners filing as individuals. These marginal tax increases during a severe economic downturn come on top of a raft of new tax hikes as a result of the national health care law he rammed through Congress in the face of overwhelming opposition from the American public.

Obama captured the White House on the idea that he was different than President Bush, not just in terms of policy substance, but also in governing style. He may just lose the presidency by replicating one of Bush’s most prominent flaws.

Polls Continue to be Grim for Obama, Democrats

As Americans return to work after the Labor Day weekend, a new Washington Post/ABC News poll reveals that Democrats still appear to be in deep trouble, with Republicans opening up a 13-point lead on the generic ballot.

In addition, 92 percent of Americans think the economy is in bad shape, and now more Americans think President Obama’s economic policies have hurt rather than helped the economy. Overall, a majority of 52 percent disapprove of his job performance.

The poll also found that 78 percent say they are disfatisfied with the way the federal government is working, which is the highest measure since October 1992, right before Bill Clinton beat George Bush in the presidential election.

The fundamentals, in other words, continue to be terrible for Democrats, and now that we’re into September, there really isn’t much time to turnaround these basic perceptions.

Aug. Unemployment Rate 9.6%, Economy Sheds 54K Jobs

The economy lost 54,000 jobs in August and the unemployment rate creeped back up to 9.6 percent, but the numbers were better than expected and the job losses could be attributed to the expiration of temporary Census jobs, according to a report released this morning by the Department of Labor.

During the month, there were 114,000 jobs lost because of the Census, while the private sector added 67,000 jobs. According to a Reuters survey, economists were expecting overall employment dropping by 100,000 and private sector hiring up 41,000.

There were also 1.1 million discouraged workers who are not reflected in the unemployment rate because they have stopped looking for work, believing that no jobs are available to them.

While the numbers may have been better than expected, they still aren’t great. Politically speaking, they won’t do anything to change voter perceptions that the economy is weak and that the Democrats’ spending measures have been a failure. Keep in mind, too, that there is only one more jobs report due out before the election, so Democrats are running out of opportunities to demonstrate sufficient progress.