27 February 2009

Change I Cannot Believe In

This past TUESDAY President Obama gave an outrageously good non-State of the Union speech (it’s not called that when a new president has just taken office, but it’s essentially the same). I actually watched all of it again on Wednesday online and had to admit that the presentation was practically flawless. Others have since pointed out that it was very hard to watch because Nancy Pelosi kept jumping up like a jack-in-the-box at every applause line. As for content, well. Obama presented a program that is truly astounding—and he has no money to pay for it. On top of the recession, Obama plans to reform education, institute universal health care, create world peace… It was really sickening to listen to the smug nonsense of the speech and much of it was specifically designed to lay blame at George W. Bush’s feet. “We have inherited a deficit,” etc. Well, never mind that it was the Congressional Democrats who created those deficits, even if Mr. Bush can be blamed for not vetoing more spending bills.

What was quite painful to watch was the Republican response to the speech, given by Louisiana governor Bobby Jindal. It was a terrible speech, regardless of what Michael Medved says. I was and am in complete agreement with David Brooks’ assessment which he gave immediately afterward on the News Hour with Jim Lehrer on PBS (that it was “not a good speech”). And I am not just talking about the delivery which was astonishingly bad. He seemed like an eight-year old reading a book report his mother had proofread and corrected. But the contents were stupefyingly bad too. Not that I did not agree with most of the things he said, but he was hammering on the wrong topics as if he were tone deaf to the public conversation that has been going on about the current crisis. It is fine to believe in a pro-business, lower corporate taxes and incentives approach to the economy but it simply is not sufficient, in an address like this to the entire nation, to lambast the Current Occupant—to borrow a phrase from Anoka’s favorite left-wing loony—for being a closet socialist. Jindal’s speech was in essence nothing but a childish McCarthy-esque Red Scare speech. It really made me doubt whether Jindal has any future in politics, much in the same way as I believe Sarah Palin ought to be firmly tethered to the Alaska governor’s mansion for fear she tries to step on the national stage again. Palin presents a scary anti-intellectual approach to conservatism that I believe will do more harm than good. Folksy? Fine. Straightforward? Fine. Anti-intellectual? No way, Jose.

On THURSDAY came Obama’s budget. In addition to the $700 billion Spending Bill (wrongly named the Stimulus Package) Obama is now proposing another $500 billion in “regular” spending. My friend David Brooks again explains what’s wrong with this budget in his New York Times column today:

On Thursday, he [Pres. Obama] offered a budget of his own, and the question arises: Will he really change all that?
The answer is somewhat, but not enough. Obama’s budget is far more honest than the ones that preceded it. It imposes real pay-as-you-go rules on future outlays. Intellectually serious efforts are made to pay for at least half of the cost of health care reform.
But the ingrained habits are still there, and the rot is not expunged.

There is a certain virtue in honesty. George W. Bush’s insistence that the expenditures of the wars in Iraq and Afghanistan be hidden by accounting tricks and kept off the regular budget has not convinced me, so the fact that the true cost, at least in dollars, is now visible in the budget is not bad. But this honesty does not go very far, nor is it even complete. As Mr. Brooks explains, Nancy Pelosi is running the show and that is truly a scary thought. It’s bad enough to think she is third in line under the Constitution.

However, the best analysis of the budget I have heard has come from former McCain campaign advisor and former CBO Director Douglas Holtz-Eakin. He went head to head with Robert Greenstein, Director of the Center on Budget and Policy Priorities, on (yes, again) PBS’s News Hour with Jim Lehrer on Thursday. Holtz-Eakin exposes the Obama budget (and the economic policy in general) as old-fashiond socialist tax-and-spend dogma. Interviewer Jeffrey Brown asked him whether he thought Peter Orszag (White House budget direcor) was wrong in rejecting the label “wealth distribution.” Holtz-Eakin responded, in probably the best-presented media critique of Obama fiscal politics,

Oh, it is. I mean, there’s no question. This is a trillion dollars in tax increases. They are going to be on business through deferral and other sorts of arcane things and on high-income individuals explicitly. Raise their rates, tax their dividends and capital gains, diminish their charitable and mortgage interest deductions, and use it to fund Make or Pay, Earned Income Tax Credits, on American Opportunity Credit, low-income tax credits, refundable credits for some people who don’t even pay income taxes. So, there’s no question what that is.

Liberal counterpart Robert Greenstein had no answer for this. He took the so-called high ground by reminding the PBS audience that all Obama’s policy does is go back to the tax rates that existed before George W. Bush’s irresponsible tax give-aways to the wealthy. That sounds very good on TV and I’m afraid that many people bought that excuse, but it has one major logical flaw: it assumes that the tax rates in 1999 were good then. (One may ask, in addition, whether the 1999 rates—or the 1988 rates, for that matter—will work in 2009, but we will leave that matter for now.) In other words, what Greenstein was saying is, in effect, our policy is okay because it we used to do it this way before. To take this argument ad absurdum, imagine how high eyebrows would have to be raised if, say, President Grant had decided to reinstate slavery in 1871 with the justification that “all we are doing is returning to the situation before 1860.” Just because a situation existed in the past does not make it right or applicable to the present.

No comments: