Politics

Liberals Worried About Obama’s Economic Competence

Newsweek’s Howard Fineman wrote in his "A Turning Tide?” column that “the establishment is beginning to mumble that the President may not have what it takes.”

Fineman, firmly established in the establishment as Newsweek’s senior editor, reported that Obama is “dismissed as being in over his head by technocrats” and, more broadly, “in ways both large and small, what’s left of the American establishment is taking his measure and, with surprising swiftness, they are finding him lacking.”

Obama’s stock is falling, stated Fineman, because of the $787 billion stimulus plan that’s not aimed clearly enough at job creation, the $400 billion spending bill that’s overloaded with 9,000 earmarks, and the $275 billion home refinancing plan that’s too complicated and misdirected.

Fineman adds that Obama appears to be in “a state of paralysis” in the face of the banking crisis and his bailouts appear to be throwing “good money after bad,” especially with Citibank and General Motors. He says that Obama is giving “way too much leeway” to Congress in crafting important programs like the stimulus package and health care reform, and that Obama’s 2010 budget tries to do far too much with “overly rosey predictions” of future growth in both the economy and government revenues.

With the problem of trying to do too much too soon with bank bailouts on Monday, health care reform on Tuesday, fixing education on Wednesday, tax restructuring to soak the rich on Thursday and replacing coal with windmills on Friday, Obama seems to lack focus and an ability to prioritize.
 
Fineman concludes that Obama, “known for his eloquence and attention to detail,” is “seemingly unwilling or unable to patiently, carefully explain how the world works — or more important, how it failed.”

My guess is that the establishent would find Obama even more lacking if he explained how he thinks the world works. Go beyond the hype of inspirational mantras like “hope,” “change” and “yes, we can,” and Obama turns from a savior into an economic lightweight.

Moderator Charlie Gibson of ABC News during the Democratic presidential debate in April asked Obama why he favored an increase in taxes on capital gains when “history shows that when you drop the capital gains tax, the revenues go up.” Obama replied, “Well, that might happen,” but it still might be right to hike the tax “for purposes of fairness.”

Does Obama’s concept of fairness mean that an increase in taxes on capital gains is the right policy even if it leaves less money in the private sector for investment and job creation and brings less tax revenue into the government to fund his priorities in education, anti-poverty programs, energy and health care?

Does Obama believe it’s the right policy simply because the rich should pay more? Does he think that a more level distribution of income is right even if it results in slower economic growth, a government with less revenues and a business sector with fewer jobs?

Similarly, perhaps Obama could explain why he seeks to limit tax deductions by the rich for charitible giving and mortgage interest payments when the effect will be a drop in charitable donations and housing sales right at the time when we need more of both.

Is he saying that it’s okay to starve the charities and keep home builders unemployed because the goal is to make the rich pay more?

When politicians raised the taxes on the sale of new yachts for purposes of equity and income leveling, the effect was lower sales and more unemployment for workers.

With Fineman’s call for Obama to explain what’s failed in how the world works, one wonders if Obama understands that what’s failed most spectacularly and consistently over the past century are the regimes that overly empowered government, criminalized businesses and demonized individualism in the pursuit of a pie-in-the-sky fairness and egalitarianism.

If Obama followed Fineman’s advice and explained his views on how the world works, would he be able to defend his concept of “fairness” and his subsequent policies which actually harm those he means to help?

When your ideology is actually harming the people that you want to help, it’s time rethink your principles.

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