The Talk: Ideas for Reviving the Economy
September 2, 2011
Ross Freiman-Mendel: The president will deliver his much anticipated, albeit controversial, jobs speech this Thursday. What are you looking for Chip?
Chip Lebovitz: I think the speech needs to be put in context. The general consensus is there is little chance that House Republicans will pass any of his proposals, giving the president two options. Either the president pulls a Harry Truman and offers up a veritable cornucopia of 1990’s Republican ideas, and uses that to prove that the Republicans are more interested in defeating the president than governing, or he offers a big picture jobs plan couched in a long term deficit relief plan. Spending now, cuts in two years – jobs now, deficit reduction when the economy starts to recover.
Ross Freiman-Mendel: Neither will work for the president. He already hurt himself politically, with this ill-advised scheduling gaffe. Ezra Klein said it best; the speech will suggest the usual but do manifestly nothing.
Chip Lebovitz: You’re skirting around the point that the speech will do nothing because the Republicans will not allow it to do anything that might benefit the president. Let’s take a step back here for a second, what could the president actually propose that could get through Congress?
Ross Freiman-Mendel: The Republican message is pretty simple; no country has ever taxed, spent, and regulated its way to prosperity. First and foremost, slash spending across the board, because the huge national debt inhibits growth. Beyond that, the Fed’s interest rate policy has dangerous long term consequences (although House Republicans can do little about that). The President could heed those suggestions.
Chip Lebovitz: You’re ducking the question highlights the main point of this entire scenario: the Republicans will only pass jobs legislation that gives them 100 percent of what they want (or maybe 98 percent). That’s not how the country works; we do not have a parliamentary system where it’s winner take all. Governing requires compromise; it’s plain irresponsible at a time of 9.1 percent unemployment to handicap the government now in the search of a sweeping fix to the problem. So I ask again, what could the president actually propose that could get through Congress?
Ross Freiman-Mendel: Specifics — repeal Dodd-Frank; repeal Obamacare; repeal Sarbanes-Oxley (go Newt!), eliminate the corporate income tax, replace the income tax with a flat tax, bring the troops home, eliminate the Department of Education and Department of Agriculture, need I say more. If you want to talk about compromise, these are ideas the president won’t even touch because they are too “crazy,” too “conservative,” or too “destructive.” Republicans need not compromise if they fundamentally disagree; the system worked brilliantly as a change in popular will halted the president’s vision and direction for the country.
Chip Lebovitz: To quickly put in context some of what you propose: allowing banks to act like they did pre-recession, cut taxes on the richest 1 percent and raise them severely on the poor, and for good measure not fund student’s education. You also forget that the country was founded on compromise and has depended on compromise for its entire life. Sherman’s Compromise helped cement the Constitution, and the Tax Reform Act passed under Reagan with support from Democratic senator Bill Bradley (D-NJ), made America welcome to business and fueled twenty years of economic growth. Let’s not even forget that the S&P downgraded us due to our inability to compromise.
Ross Freiman-Mendel: Compromise, “yes;” reckless spending, excessive regulation, unfunded mandates, prostitution to unions, immense bureaucracies, “no.” Republicans will compromise on things that are ideologically tenable. Perhaps Republicans moved right because they were helpless to a Democratic president and majorities in the House and Senate from 2008-2010.
Chip Lebovitz: Or perhaps they rejected their old ideas (Obamacare does equal Romneycare) to gain an electoral advantage. Hyperbolic rhetoric is usually a cover for something less desirable – in this case, willing to let the economy tank to win in 2012.
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