President Obama Ducks and Covers

During the Cold War, those in charge of our nuclear arsenal were of the mode “grab your launch key and fasten your safety-belts” should confrontation with the Soviet Union blossom into open hostilities.  It was the admission that an apocalypse was at hand  and there was little control of events occurring other than to throw whatever you had at the adversary.

Last night’s speech to a joint session of Congress by Mr. Obama seemed to betray such a mentality that he has: throw what you have remaining at our economic problems and brace yourself for the blow-back.

The President proposed, by modern (the last 4 years) standards, a relatively modest $447 billion dollar package of spending initiatives and tax cuts.

All of the details are generally a warmed-over version of previously tried non-stimulative attempts to put a small amount of money in the hands of consumers.

Among the leftovers Mr. Obama offered, he called for more than $62 billion in spending to extend unemployment insurance benefits through 2012 and fund programs to alleviate long-term joblessness, $140 billion in infrastructure spending and aid to states, and a cut in the payroll tax for both employers and employees in 2012 which would cost $175 billion.

All of this sounds nice but offers no long-term solution to our economic problems.  Extending unemployment benefits, while seemingly compassionate in many a case, is presumably for a problem that will hopefully be resolved within a year or 2, if not less.  The aid to states also props up profligate states who feed an unsustainable growth of themselves.  The payroll tax cut, which is also temporary, offers no long-term reason for employers to hire and retain workers.

Almost all voices across the political spectrum are in agreement that the President’s package is anemic, at the very least.  In short, it is a long way from an FDR initiative which is surprising as Mr. Obama believes we are in the greatest economic calamity since the Depression.  This makes one believe that he realizes that he’s thrown everything from the Liberal playbook that he has, and can do no more.

It seems that the President realizes that he has reached the outer limits of his FDR/Keynesian zenith and from here on it is contraction and a defensive posture.

The speech and its ideas, relatively muted for a “hope and change” President, seems to indicate that he, from both a political and governance perspective, is “grabbing his launch key and fastening his safety-belts” for the 2012 election.

-I.M. Windee

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