The World According To Bleh

I'm not coming out of this box until the world is sane again...

So it does look like Obama is endorsing a change in COLA to reduce Social Security payments over the long run.  In return he wants revenue increases.  So to recap: Obama wants to piss off older voters so he can raise taxes on the rich - who also vote.  He will reap political rewards by.... Hell if I know.

And then we have today's job report.  It is beyond sucky and is likely partially tied to uncertainty surrounding the debt ceiling.  If you were hiring would you take on the training of new workers when we are staring at a new Dark Ages?

Obama was largely right in saying that the collapse in hiring can be attributed to four things:

1) Uncertainty surrounding the immediate economic conditions, especially the possibility of default.

2) Persistent unemployment in the construction sector.

3) State lay-offs as the "Fifty Little Hoovers"* reduce state payrolls to balance their budgets.

4) Natural disasters like the Japanese earthquake that have disrupted global supply chains.

What's amazing is that looking at those top three causes, it would seem that the last thing we should be doing is cutting spending at the federal level.  I can't imagine someone is deciding not to open a small business because of the federal deficit.  But they might be because they don't know if America will be solvent in three weeks.

Similarly, Obama has  - rightly - proposed infrastructure spending to get people working in the construction trades.  All the while buying in to the BS fallacy that federal debt is somehow inhibiting job growth.

At the state level, one of the benefits of the stimulus bill was that it kept states solvent and allowed them to avoid laying people off.  That money is gone.  There is no way in hell the Tea Party controlled House (and it does seem to be controlled by the Tea Party) will appropriate money to states to keep state employees on the job.

Krugman, Stiglitz and others noted in 2009 that the stimulus was too small and too short in duration.  Obama admitted that he underestimated the power of this recession.  And yet he seems to be following the advice of the same people who advised him poorly in 2009.

I also understand that Obama likely couldn't have gotten a bigger stimulus through Ben Nelson's Senate in 2009.  I understand he will not get more spending from Louis Gohmert and Michelle Bachmann's House in 2011.

But the White House political team should have looked at William Howard Taft's disastrous endorsement of the Payne-Aldrich tariff.  Taft ran for office on lowering the tariff, but reactionaries in the Senate and House leadership took a tariff reduction and turned it into a tariff increase.  Then - and here was Taft's mistake - he called it "the best bill the Republican Party has ever passed".  This set up the Progressive flight from the GOP party to the Bull Moose party and eventually to the Democrats under FDR. It also insured Taft's defeat in 1912. (I am not prepared to offer an exegesis on early 20th century tariff policy right now.  I haven't slept well in about five nights.)

Sometimes circumstances serve you up a big old steaming Poo Sandwich.  And while you may have to eat it, don't pretend it's delicious.

* The appellation "Fifty Little Hoovers" isn't really fair to Hoover.  He did embrace modest deficit spending, albeit primarily in a "trickle down" effect through the RFC.  Sorry, Herbert.