Voodoo Economics

“After embarking on a record spending binge that left us deeper in debt, where are the jobs?” John Bohner Tweeted during Obama's Twitter Town Hall. Obama responded by talking about tax cuts and the need for infrastructure improvement. What he should have said was “Don't you remember?, we agreed to layoff thousands of workers.” Many were shocked at the June employment report- only 18,000 jobs added. What got less attention was that 39,000 government jobs were lost. This adds to 72,000 government jobs lost during April and May. The writings of Paul Krugman are becoming increasingly relevant. “If all you did was listen to his speeches, you might conclude that he basically shares the G.O.P.'s diagnosis of what ails our economy and what should be done to fix it,” Krugman wrote in “What Obama Wants”.

A simple overview of the situation should come to this conclusion: Obama is trying to give in to as many Republican demands as possible in order to secure his reelection as the moderate candidate who is willing to compromise. The problem is that this is hurting the economy so much that by November 2012 the objective conditions of the American people might trump the traditional political wisdom for being moderate. By election time people might be ready to vote for anybody but Obama.

Krugman notes that “Almost all the high-profile economists who joined the Obama administration early on have either left or are leaving. Nor have they been replaced.” Obama is not an economist, and one must wonder whether he is trusting the Republicans to develop a coherent economic policy for him. Is it possible that the Republicans realize how much influence they have over him, and are guiding his hand toward deliberate economic sabotage for their own political gain?

I don't think that Obama can just be given a pass as a progressive who doesn't understand economics very well. The more shocking remarks in his Twitter Town Hall were in response to a person concerned about the recent loss of collective bargaining rights for public sector workers in some states. At a time that unions are under the most vicious attacks they've seen in decades, their supposed ally in the White House said, “In the public sector, what is true is that some of the pension plans that have been in place and the health benefits that are in place are so out of proportion with what's happening in the private sector that a lot of taxpayers start feeling resentful.” He further endorsed the thrust of the anti worker attacks saying, “all of us are going to have to make some adjustments.” He concluded his response by bragging about his two year pay freeze for federal workers. (Apparently not all of us will have to make adjustments; the president, vice president, and members of Congress are exempt from the pay freeze.)

If deliberate economic sabotage seems like a conspiracy theory, my other hypothesis is that Obama has secretly been a Republican all along. Perhaps the past 15 years of his political career were all mapped out in a smoke filled meeting with Newt Gingrich and Haley Barbour before he ran for the Illinois Senate. This, I admit is unlikely.