President Obama’s economic record has been a mixed bag thus far—a tale of good intentions circumvented by bad politics.
President Obama, Allentown, PA
When he first came to office, the president managed to push through a stimulus that was meant to prevent the economy he inherited from careening even further off the skids.
Many observers, myself among them, thought the stimulus was too small and gave away too much in unstimulutive tax cuts under the guise of bipartisan support. Today, no one gives the president credit for bipartisanship, unemployment remains at close to double digits and the Administration is looking for an additional infusion of federal funds by way of infrastructure spending.
That is the bad news and the reality with which we are faced today. It is fair, however, to point out that the economy Obama was handed in January 2009 resembled a Yugo much more than a Cadillac. The first order of business for the new administration was triage and this was done with moderate effect.
According to the Congressional Budget Office, the actions taken by the president and congressional Democrats in early 2009 raised GDP by as much as 4.5 percent during the last quarter and allowed up to 3.3 million Americans to not face the unemployment line. Even the conservative American Enterprise Institute cited the stimulus as the reason why the economy grew in 2009.
It is also fair to mention that other efforts to jolt the economy were stymied by a callous and politically calculating Republican minority. It doesn’t take a rocket scientist to draw a connection between consumer spending and economic recovery. Yet getting another unemployment benefit extension passed this summer became a Herculean task, despite the fact that it is exactly those who suffer from unemployment who are most likely to spend the money immediately.
Seventy percent of our economy is derived from consumer spending but, had the minority had its way, the unemployed would have been left penniless and unable to engage in the sort of spending that is key to economic recovery.
Finally, the president is right to largely ignore the Republicans on the question of deficit spending. Like a bunch of drunken sailors who have suddenly embraced teetotaling, Congressional Republicans have been doing all they can to thwart proactive economic growth by crying foul over an increased federal deficit.
To say that this is bad policy would be an understatement. At a time when the economy desperately needs an infusion of spending, worrying about the deficit is nonsense. For a party that spent like there was no tomorrow when it was in power, Republicans have suddenly seized on austerity for political gain.
The same legislators who voted for an unfunded and massive prescription drug plan and two unfunded wars have now, in the greatest recession since the 1930s, suddenly had a deathbed conversion about deficit spending. Of course this does not prevent them from holding hostage tax breaks for 98 percent of Americans in order to provide larger tax breaks to the very wealthiest among us—or specifically the demographic which is least likely to spend the money immediately.Apparently deficit spending is all right as long as the wealthiest among us are satisfied.
So where does the president go from here? He is right to push for new infrastructure spending because whatever the Administration may call it, this is the stimulus we needed two years ago and the same stimulus we need today.
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He is right to reject calls to balance the federal budget at a time when we need infusions to keep Americans employed and our economy recovering. He is right to focus on new regulations, opposed by Republicans, which at least attempt to prevent another meltdown from happening.
But the president would also be right to finally find his voice on the economy, use his bully pulpit to shame those who would rather grandstand than help their constituents and stop trying to push for a bipartisanship for which he gets no credit.
Yes, the economy is not in good shape. Yes, unemployment is at unacceptable levels. Yes, the recovery is too tepid and slow in coming. But this president and his allies in Congress have kept us from slipping into an abyss and have begun, however slowly, to turn things around. What we have had from this Administration is not a failure to act. But what we have also had is a failure to communicate.
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Julie Roginsky is a CNBC contributor who has extensive experience in government, politics and public relations on both the federal and state levels including serving as the Washington communications director for former Senator Jon Corzine.