In the Liberal / Progressive view central governmental control and central planning is the answer. Economic failures associated with this approach, past and present do not alter this view, meaning simply that it’s ideological. When fact and failure do not result in change, it’s ideological. The Progressive view demands that economic winners and losers be chosen based on political considerations not economics. Green good, carbon bad! Green continues to fail despite hundreds of millions in support and carbon makes profits like clockwork. In the Progressive view economic or financial success must be managed so that no one has too much of it. Current Liberal / Progressive positions on taxing “the rich” provide the evidence of the moment. Liberal / Progressive devotees believe that redistribution of resources in its many forms and evolutions is the key role of government as the path to a “just” society. Churchill put a fine point on this approach; “the inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.”
In the Conservative view government’s role is to set conditions whereby private enterprise and personal creativity flourish providing the engine for economic expansion, growth and jobs. This view holds that competition results in efficiency, creativity as well as failure of those who cannot compete, contribute or create. It’s a simple formula really: rational regulation, competitive tax policy, and government support only where demonstrable growth can be reasonably anticipated or the issue is too big for any single private entity. Conservatives would also, I believe, agree to a government role in basic research that can be translated into ideas and technologies that create competitive advantages in the global marketplace. Conservatives believe that redistribution of resources is a function of productivity and creativity. Produce more, create, innovate and enjoy the fruits of your efforts as you carry others along in the wake of expansive innovation.
We arrive at the conundrum facing the President. His ideological view is, unquestionably, Progressive, his economic preferences clearly Keynesian. He will put forth a jobs plan in the context of what has been essentially zero job growth over the past few months. The public finger is pointed at both Presidents Bush and Obama, 50/50. President Bush however, is not running for reelection. Additional context is defined by the fact that only 16% of Americans believe we are on the right path and while the President maintains a significant degree of personal favorability his economic policies are rapidly becoming a tsunami of rejection. The ultimate Progressive economic mother lode; government guaranteed income levels enjoy only 11% support in the general electorate. (Rasmussen) While Progressives may salivate over European style economic support American voters comprehensively reject the idea.
The refusal of the Administration to expedite domestic energy production costs jobs. The NRLB in the Boeing case and the EPA’s attack on coal costs jobs. The demonization of private industry costs jobs, uncertainty costs jobs. A Heritage foundation study ties the lack of economic recovery directly to passage of the Health Care bill; the charting is dramatic and leads to unavoidable conclusions. The propensity of the Administration to do with regulation what they cannot do legislatively inhibits long term job growth as the investment in private infrastructure needed to support long term job growth is clearly waiting it out in hopes that a second Obama term does not occur and that regulation and Health Care legislation can be deconstructed.
The fact is that job growth is a result of the economic climate common sense is all that is required for this particular point of insight. You simply cannot manufacture short term fixes that have any lasting impact on employment. A lesson we should have over the past two and a half years as the administration threw spaghetti against the economic wall in hopes some would stick.
It is about policy, confidence and psychology. What can the President do? Rhetorical answer; he has to abandon Progressive economics. Whether the President can bring himself to that point of abandonment remains to be seen. Can he eliminate taxes on repatriated profits? Can he move toward Conservative views in terms of tax policy and regulation as an admission that his approach has not worked and that “putting American workers first” or a “laser focus on jobs” is more than tele -prompter driven rhetoric? Can he discipline himself not to demonize the likely suspects? Can he accept policy that motivates capital investment and convinces the consumer that the worst is over? Most fundamentally, can he view economics empirically and not through the prism of Progressive political agendas? Can he extend the smack down of EPA smog regulations, as he, laudably, did today?
Or, will he propose more Keynesian stimulus spending dressed up as something else? That’s the infrastructure bank; stimulus with a dress on. Will he “go big” as his Progressive supporters so firmly desire? Can he strike a balance that can pass Congress?
The baseline problem for the President is that he has to abandon his belief system to turn the tide of the current economic trends and as a result job growth. Can he do it? Will he do it? Will he see that repudiation is the only path forward? That is a bitter pill for a President decidedly unwilling to swallow bitter pills.