White House advises Senate to not lead in an election year

Senator Ron Johnson (R-WI) asked Ben Bernanke at the recent Senate Budget Committee if the lack of Presidential leadership was hurting the US economy. He asked, “I’m afraid President Obama has just been phoning it in here the last couple years in terms of our debt and deficit issue. … Can you speak to how harmful that is in terms of economic growth?”

Now Bernanke can’t answer these sorts of things straight away. But he basically got there. Here’s what he said:

Well Senator, I’m not going to comment on parliamentary maneuverings, but Senator Wyden made exactly the same question. You know, is uncertainty about the future of the tax code, government programs, and so on a negative for growth? I think it is because firms like to have certainty, like to be able to plan. And again I would take on the same responsibility as a regulator, that we need to make regulations as clear and as effective as possible.

So he’s saying that firms like to have certainty and that as a regulator, Bernanke wants things to be clear and effective. Today Jake Tapper asked Jay Carney about this. Should Senate pass a budget? Does the President have an opinion on this? Turns out that the answer is no

TAPPER: The White House has no opinion about whether or not the Senate should pass a budget? The president’s going to introduce one. The Fed chair says not having one is bad for growth. But the White House has no opinion about whether –

CARNEY: I have no opinion — the White House has no opinion on Chairman Bernanke’s assessment of how the Senate ought to do its business.

I think it is worth recalling why the Senate stopped passing budgets. Because they are politically difficult, and being accountable is hard in an election year. The Senate last passed a budget on April 29, 2009. They didn’t work on a budget in 2010. Why? Because a budget requires taking responsibility for the fiscal state of our country. And it was clear that the 2010 election was going to be rough for Democrats. So what did they do? They ducked. They dodged all responsibility. Republicans were willing to do it in the House, but the Senate was not. They didn’t even bring a serious budget to the floor and haven’t since.

And since the Republicans have been able to put their ideas up for inspection by the American people. See the Ryan Budget. Republicans are willing to fight an election on ideas and tell the American people what sacrifices will need to be made to address our fiscal crisis.

But now, not only is the Senate failing the American people, but President Obama is helping the Senate in dodging this responsibility. The fact is that he has no opinion on running the country like an adult. He has “no opinion” about giving business certainty.

Thank you Ron Johnson for asking the question and getting the clarity on this from Chairman Bernanke. And thank you to Jake Tapper for asking the White House if they are interested in leading.

They aren’t.

 

What Obama’s tire treatment teaches us about his administration

 At 9:18 Friday night, I got an alert from the Washington Post. Barack Obama had slapped tariffs on imports of Chinese tires. Barack Obama’s handling of this issue shows several things. First, it shows a real contempt for China, trade policy, and his international relationships more broadly. As one of my liberal friends likes to point out, this action demonstrates how the Democrats really cannot be taken seriously as the internationalist party.  And it shows the implicit contradictions in much of Obama’s economic policy.

Let’s start with the time of its announcement: 9:18pm. Really? Saturday morning in China? This tells us who the audience for this policy was: the United States. It tells us that Obama is willing to subordinate trade policy — just before the G-20 meeting no less — to domestic politics that he is embarassed about. Why else release this late on a Friday night?  (note that by statute, he didn’t have to release a response to International Trade Commission recommendations until the 17th. He picked this timing)

By Saturday afternoon, China issues scathing remarks. By Sunday, they announce counter-tariffs against US chickens and auto-parts. We have a full scale trade war.  And Asian and European markets open the week down. Thanks Barack…

So Barack Obama started a trade war for entirely domestic reasons, jeopardizing the recovery, and is afraid of the headlines here, why he doesn’t care about international opinion. How does that sound?

Now, why chickens and auto parts? I don’t immediately understand the chickens, although I suspect it is a pretty good business for us, but I understand auto parts. 

US auto parts are made by the United Autoworkers, the same union that Obama bailed out when he bailed out GM and Chrysler, two companies that had becoming wards of their union pension funds. In addition to hurting the unions, this could hurt the auto manufacturers themselves, which Obama owns and which opposed the tire tariffs because it will raise their costs. First he screwed the car companies for the UAW, now USW. Perhaps this is a lesson for when he takes over the health care sector. 

So where was the logic in this? He helps his allies, with one hand, but hurts them with the other. He hurts the economy. He hurts the government run companies. And he opens a trade war just in time for the G-20 to create real structural damage to the US economy.

Furthermore, this is how he is celebrating the anniversary of the death of Lehman Brothers. By sticking the knife in the economy.

That’s change I can believe in.

4
Your rating: None Average: 4 (1 vote)

What Obama’s tire treatment teaches us about his administration

 At 9:18 Friday night, I got an alert from the Washington Post. Barack Obama had slapped tariffs on imports of Chinese tires. Barack Obama’s handling of this issue shows several things. First, it shows a real contempt for China, trade policy, and his international relationships more broadly. As one of my liberal friends likes to point out, this action demonstrates how the Democrats really cannot be taken seriously as the internationalist party.  And it shows the implicit contradictions in much of Obama’s economic policy.

Let’s start with the time of its announcement: 9:18pm. Really? Saturday morning in China? This tells us who the audience for this policy was: the United States. It tells us that Obama is willing to subordinate trade policy — just before the G-20 meeting no less — to domestic politics that he is embarassed about. Why else release this late on a Friday night?  (note that by statute, he didn’t have to release a response to International Trade Commission recommendations until the 17th. He picked this timing)

By Saturday afternoon, China issues scathing remarks. By Sunday, they announce counter-tariffs against US chickens and auto-parts. We have a full scale trade war.  And Asian and European markets open the week down. Thanks Barack…

So Barack Obama started a trade war for entirely domestic reasons, jeopardizing the recovery, and is afraid of the headlines here, why he doesn’t care about international opinion. How does that sound?

Now, why chickens and auto parts? I don’t immediately understand the chickens, although I suspect it is a pretty good business for us, but I understand auto parts. 

US auto parts are made by the United Autoworkers, the same union that Obama bailed out when he bailed out GM and Chrysler, two companies that had becoming wards of their union pension funds. In addition to hurting the unions, this could hurt the auto manufacturers themselves, which Obama owns and which opposed the tire tariffs because it will raise their costs. First he screwed the car companies for the UAW, now USW. Perhaps this is a lesson for when he takes over the health care sector. 

So where was the logic in this? He helps his allies, with one hand, but hurts them with the other. He hurts the economy. He hurts the government run companies. And he opens a trade war just in time for the G-20 to create real structural damage to the US economy.

Furthermore, this is how he is celebrating the anniversary of the death of Lehman Brothers. By sticking the knife in the economy.

That’s change I can believe in.

4
Your rating: None Average: 4 (1 vote)

What Obama’s tire treatment teaches us about his administration

 At 9:18 Friday night, I got an alert from the Washington Post. Barack Obama had slapped tariffs on imports of Chinese tires. Barack Obama’s handling of this issue shows several things. First, it shows a real contempt for China, trade policy, and his international relationships more broadly. As one of my liberal friends likes to point out, this action demonstrates how the Democrats really cannot be taken seriously as the internationalist party.  And it shows the implicit contradictions in much of Obama’s economic policy.

Let’s start with the time of its announcement: 9:18pm. Really? Saturday morning in China? This tells us who the audience for this policy was: the United States. It tells us that Obama is willing to subordinate trade policy — just before the G-20 meeting no less — to domestic politics that he is embarassed about. Why else release this late on a Friday night?  (note that by statute, he didn’t have to release a response to International Trade Commission recommendations until the 17th. He picked this timing)

By Saturday afternoon, China issues scathing remarks. By Sunday, they announce counter-tariffs against US chickens and auto-parts. We have a full scale trade war.  And Asian and European markets open the week down. Thanks Barack…

So Barack Obama started a trade war for entirely domestic reasons, jeopardizing the recovery, and is afraid of the headlines here, why he doesn’t care about international opinion. How does that sound?

Now, why chickens and auto parts? I don’t immediately understand the chickens, although I suspect it is a pretty good business for us, but I understand auto parts. 

US auto parts are made by the United Autoworkers, the same union that Obama bailed out when he bailed out GM and Chrysler, two companies that had becoming wards of their union pension funds. In addition to hurting the unions, this could hurt the auto manufacturers themselves, which Obama owns and which opposed the tire tariffs because it will raise their costs. First he screwed the car companies for the UAW, now USW. Perhaps this is a lesson for when he takes over the health care sector. 

So where was the logic in this? He helps his allies, with one hand, but hurts them with the other. He hurts the economy. He hurts the government run companies. And he opens a trade war just in time for the G-20 to create real structural damage to the US economy.

Furthermore, this is how he is celebrating the anniversary of the death of Lehman Brothers. By sticking the knife in the economy.

That’s change I can believe in.

4
Your rating: None Average: 4 (1 vote)

Romney’s closing message in Michigan or a new campaign?

Dean Barnett offers a scathing assessment of the Romney campaign today. I don’t want to focus on that here, instead his closing:

I hope Mr. Romney does well enough in Michigan today that he gets the opportunity to introduce the public to the real Mitt Romney. He is a wonderful and gifted guy. It would be nice if he and his campaign allowed the voters in on that secret.

If Mitt Romney’s closing speech to the Detroit Economic Club is the real, Mitt Romney, then we have an even bigger problem then we thought. Byron York had this analysis of the speech:

Romney’s proposals might not be music to the ears of free-market conservatives who believe Detroit made its own problems and needs to fix itself. But it’s what a lot of people in Michigan want to hear.

In other words, Romney ran to the left telling "a lot of people [what they] want to hear." If this is the real Mitt Romney, still telling people what they want to hear, abandoning his new refound principles, then just wait until a general election.

McCain town hall in Reagan Democrat country

(Cross-post from Redstate)

Macomb County, Michigan, is one of the homes of the Reagan Democrat. Today, I saw John McCain give a town hall in the closing stretch of the Michigan primary. I don’t have pictures because my video camera was stolen, but I have impressions.

Michigan is in an a single-state recession. Unemployment is above 7%. Many of the current jobs are in manufacturing which, the Detroit News, the conservative paper in the state, has noted won’t come back. How to handle this is the fundamental debate. Mitt Romney is saying that he, personally, can turn the state around and that the future of Michigan is bright. McCain has argued that more realism and effort is needed, and has focused on retraining programs. My gut is that McCain wins this fight by recognizing the challenges. In New Hampshire exit polls McCain received substantially more support from people with economic anxiety, and Romney won only one economic subgroup, those making between $150k and $200k.

McCain’s answer is a retraining program. In March, I was in New Hampshire (before my camera was stolen), and asked him a similar question. This was his answer:

This is the backdrop of the town hall and the current debate in Michigan. Between 600-700 people attended (contrast with around 150 at Romney’s the previous day. In the Romney campaign’s defense, they have had some scheduling snafus that have forced them to cancel a number of events) The questions were primarily about national security, veterans, Iraq, etc., and economic issues like pharmaceuticals and healthcare, and the subprime crisis.

McCain was asked about the subprime crisis, and he passed the microphone to Carli Fiorina, the CEO of HP (formerly Hewlett Packard). She said that she had never campaigned before and was supporting McCain because he is "a unique and inspiring leader." She turned to answering the question and focused on the need for transparency and accountability. She said that there were many things "off balance sheet" so that risks couldn’t be properly accounted for. She then invoked Enron and said "if you can’t see it, you can’t understand it." One person in the audience liked the answer enough to say "Thank you Madame Vice President."

Off to an event at the Americans for Prosperity Forum.

Romney out of touch?

I have worried about the strange sense that I get that Mitt Romney is out of touch. He seems like a rich guy who doesn’t understand what normal people go through. The question is whether this impression gets down into the voters. MSNBC’s exit polls found that in New Hampshire the only income class that Romney beat John McCain was $150-200k, and they tied above $200k.

I was reminded of this when I saw an AP story today about Romney’s tax plan:

But the former Massachusetts governor goes beyond that to say "anyone" with adjusted gross income under $200,000 — that’s after certain deductions — should be relieved of all taxes on capital gains, interest and dividends, pushing his definition of the middle class well into six-figure incomes.

Now, I don’t have a problem with Romney’s position, but the polling above suggests that people might be getting an impression here. This could be bad news for him in Michigan, when Mike Huckabee is relating to the people who have "been laid off" and Romney is talking about "getting rid of people." Especially when there is 7%+ unemployment.

Turnaround artist didn’t turn around Mass. Job Growth

In March of this year the Boston Globe analyzed Mitt Romney’s economic record in Massachusetts:

On all key labor market measures, the state not only lagged behind the country as a whole, but often ranked at or near the bottom of the state distribution. Formal payroll employment in the state in 2006 was still 16,000 or 0.5 percent below its average level in 2002, the year immediately prior to the start of the Romney administration. Massachusetts ranked third lowest on this key job generation measure and would have ranked second lowest if Hurricane Katrina had not devastated the Louisiana economy. Manufacturing payroll employment throughout the nation declined by nearly 1.1 million or 7 percent between 2002 and 2006, but in Massachusetts it declined by more than 14 percent, the third worst record in the country.

They lost total jobs, ranking 3rd from the bottom:

While the number of employed people over age 16 in the United States rose by nearly 8 million, or close to 6 percent, between 2002 and 2006, the number of employed residents in the Commonwealth is estimated to have modestly declined by 8,500. Massachusetts was the only state to have failed to post any gain in its pool of employed residents. The aggregate number of people 16 and older either working or looking for work in Massachusetts fell over the Romney years.

They lost total population:

We were one of only two states to have experienced no growth in its resident labor force. Again, without the devastating effects of Hurricane Katrina on the dispersal of the Louisiana population, Massachusetts would have ranked last on this measure. The decline in the state’s labor force, which was influenced in large part by high levels of out-migration of working-age adults, helped hold down the official unemployment rate of the state. Between July 2002 and July 2006, the US Census Bureau estimated that 222,000 more residents left Massachusetts for other states than came here to live. This high level of net domestic out-migration was equivalent to 3.5 percent of the state’s population, the third highest rate of population loss in the country. Excluding the population displacement effects of Hurricane Katrina on Louisiana, Massachusetts would have ranked second highest on this measure. We were a national leader in exporting our population.

Does Romney want to take this nationwide?

Steve Forbes, Rudy, Romney, and the economy

(Cross-posted from Redstate)

Two days ago (technical problems delayed this) in Manchester, New Hampshire, I sat down with Steve Forbes, and we talked about his endorsement of Rudy Giuliani, and his thoughts on the economic records of the other candidates. As a supporter of Rudy Giuliani’s he has the most to say about what he likes about Rudy, but it was interesting to me that he ripped pretty hard into Mitt Romney’s record.

The next step of the Presidential race will turn to Michigan and South Carolina. Michigan is a big northern state in, perhaps, the worst economic state in the country, the old rust belt. Voters are going to want to know what can be done for the economy. This is different than taxes, which was an important issue in New Hampshire. In Michigan, the question on voters’ mind will be "who will create jobs?" Mitt Romney’s record is weaker than is generally assumed. The Club for Growth is already up with ads attacking Huckabee, although I suspect that this is more press release. John McCain, as a Senator, has his voting record and new policy proposals to defend and propose. Erick and Neil have more on that.

South Carolina is more complicated. I will be back with more about that.

Defining news story of the cycle?

We might have just found the issue and story that crystalizes the anxieties of all Americans around a protectionist message. The story is:

Citigroup Inc., the biggest U.S. bank by assets, will receive a $7.5 billion cash infusion from Abu Dhabi to replenish capital after record mortgage losses wiped out almost half its market value. … the state-owned Abu Dhabi Investment Authority

Let’s put the pieces together.

  1. We have a shadowy Middle Eastern monarch. A King. He is loaded up to the gills with oil money.
  2. We are worried about Middle Eastern terrorism.
  3. We have a domestic housing crises that risks being a larger economic crisis.
  4. We have an intangible crisis of confidence involving globalization.
  5. This is about our banks and our money. Now some king in the Middle East tied to oil — and inevitably terrorism, legitimately or not — makes money if I don’t pay off the whole balance on my Citibank credit card.

Remember the 80s when people were taking sledge hammers to Japanese cars? How do you take sledge hammers to banks? Owned by Arabs. Etc.

This a made for demogoguery moment. If you thought Dubai Ports was bad (and, btw, I think that the President got it right, but you knew I was a rabid internationalist) just you wait.