President Obama has a need to further stimulate the economy.
But does the economy really need more Obama-styled stimulation?
Speaking in Paris last week, Christina Romer, head of the White House Council of Economic Advisers, noted that “It would be wrong to tighten fiscal policy immediately, as that would nip the nascent economic recovery in the bud.”
During a week when Obama was busy raising campaign cash for Sen. Barbara Boxer in San Francisco, taking photos with the Duke University basketball team at the White House, lunching with Bill Clinton, and — yes — holding his first press conference in 10 months to talk about the gulf oil spill, Romer traveled to Europe as the President’s representative to the annual meeting of the Organization for Economic Cooperation and Development, a 31-nation watchdog that includes the world’s richest economies.
While there, Romer astutely observed that “unemployment is still painfully high,” and that “nothing would be more damaging than a protracted recession that brought about permanent high unemployment.” She further noted that the president was planning further targeted fiscal actions to stimulate the U.S. economy, after his current economic stimulus plan “winds down” next year.
Romer’s remarks, innocuous and non-substantive as they were, nonetheless were consistent with the Obama administration’s overall public posture on the economy. Yet her comments also serve as an additional reminder of two extremely important truths — truths that at times seem all but forgotten — in the midst of the ongoing economic hardship.
For one, Obama’s “need” to stimulate the economy, and the genuine needs of the economy itself, are not the same thing. Elected politicians like the U.S. president have an immediate need to appear as though they’re doing something constructive, and to make people feel good about the economy (or at least as good as they possibly can) right here, and right now.
In the past 16 months, Obama’s immediate, short-term political need has produced a lot of public policy that seeks to “rescue” people — rescuing them from the economic downturn, from “greedy bankers” and “rich executives,” and from their own destructive behavior. Obama looks like a hero, presumably, but his policies don’t necessarily improve the economy.
Yet, another important truth in the midst of the murkiness is that far too much of this type of economic policy is built upon the “false assumption of government goodness.” This little axiom stipulates that greed, scandal and injustice only happen in the private sector economy at the hands of “rich people,” while those in the public sector — politicians and bureaucrats alike — always do the right thing, manage economic resources to their best possible ends, and act selflessly in the interests of the common good.
Thus, it is presumed, everything that President Obama seeks to do with our nation’s economic resources is for the good of everybody, done out of the benevolence of his heart. Nationalized health care is all about Obama blessing us with goodness, right? It’s so good that over half the states in our union are suing the federal government to prevent the implementation of the President’s “plan” and nearly 70 percent of the American electorate now wants it repealed.
Good, short-term politics doesn’t always lead to sound, rational, long-term economic policy. May America elect to “stop the stimulus” — before it kills us all.
Austin Hill (www.AustinHill.net) is author of “The Virtues Of Capitalism” and a frequent guest host for Arizona’s Newstalk KTAR (92.3 FM).