History, Mark Twain, reminds us, does not repeat, but it certainly does rhyme. With the congressional elections now over, the nation is finally going to get an answer to the question that has been on many minds this fall. Will Barack Obama, as did Bill Clinton before him, compromise sufficiently with his political opposition after it increased its numbers in Congress two years into his term, to advance the nation’s business and save his presidency? Or will he tighten up the hatches and forge ahead in the direction his gut tells him is best for the nation, public opinion polls and election returns be damned?
The president provided the first glimpse of an answer at his first post-election press conference. He mouthed some of the right words. Yet, his body language told another story. Obama said that he looked forward to working with congressional leaders. He made certain to make mention of Nancy Pelosi and Harry Reid, along with John Boehner and Mitch McConnell, as if to remind Republicans that they did not win control of Congress, but only half of it. He then, as his political “base” among the cable commentators had been urging, invited Republicans to put forth ideas they have as to how to grow the economy without adding to the deficit and promised to study them.
As is his wont, Obama then betrayed an attitude that might cause his listeners to conclude that he had been disingenuous. Obama knows perfectly well that the Republicans have plans to grow the economy. They call them “tax cuts.” They would argue with credibility that they are not seeking to cut them, but merely to leave them at current rates. They point out--with justification--that it is Obama who, in insisting that not all the “Bush tax cuts” stay in place, seeks to raise taxes on some Americans. (Most economists they relate--including some who have recently departed Obama’s administration--say both that raising taxes in perilous economic times can be calamitous and that tax cuts do more to promote economic growth than increased government spending.)
What then, do the president and the Republicans have to talk about? Presumably where on a sliding scale to draw the line as to at what income level tax increases will be imposed. The divide between the two parties is not over rates and incomes, per se, as in which level of earners might do more to create jobs and grow the economy. This is a matter of ideology as well as of economic theory. The differences between the two cannot be so easily breached.
As if to persuade his questioners that he is not hostile to business or to capitalism, Obama delivered a poorly crafted sermon on the power of tax cuts as an economic stimulant. As if anyone opposed extending tax cuts to the middle income Americans, Obama justified them on the grounds that these are the people with the greatest capacity to spend. Leaving aside whether that is even true (Warren Buffett certainly has greater purchasing power than most readers of this Web site), or whether people making in excess of $200,000 are “rich” (as the president characterizes them), is consumption alone, as Obama appeared to suggest, the best measure of economic growth? In addition to consumers, there is such as thing as an “investor class.” In response to sufficient incentives and the promise of high returns for investment in risky ventures such as high-tech companies and electric cars, this is the group that expands payrolls and provides jobs. That is the true source of economic growth, not public or private sector spending. Protest as much as he likes, it is this that Obama does not “get.”
Obama also knows that the GOP has ideas about how to implement their tax cuts without adding significantly or at all to the deficit. They call them “spending cuts.” The president would have his listeners believe that all government agencies will and should remain in perpetuity and that catastrophe will ensue if modest across the board cuts are made. Does anyone seriously believe that the quality of government service has improved commensurately with the rise in the number of government workers since Obama took office? Expect the House of Representatives to find out. Then there are all those government mandated costs that are part of what has become known as “Obamacare.” The only change the president appears willing to make in this monster is the elimination of a single form.
Only a Rip Van Winkel, who fell asleep on January 20, 2009, would take the president’s suggestion that he hoped to work with the GOP on necessary infrastructure repairs seriously. Those who were awake at the time will distinctively recall Republican criticisms of a stimulus package that the president allowed to be transformed into a scheme of transfer payments to state workers and justified as a “teacher retention” program. With nearly a trillion dollars now gone, do not expect Congress to “significantly add to the deficit” by passing another “stimulus” package.
Anyone listening to Obama’s explanation of why the business community has lost faith in his administration could be forgiven for asking how familiar Obama and his team are either with business or about the actions of their own administration. He correctly said that business feels frustrated at not knowing tax and regulatory rules under which they were operating. He neglected to cite the absence of a federal budget as one cause of their frustrations. After sounding like he really cared about the pressures and anxieties of the business community, the president, pivoting to his now familiar stance as class warrior in chief, related consumer fears of corporations taking advantage of customers.
No, history does not always repeat. The “rhyme” between 1994 and 2010 is that the Republicans did, in fact, win control of the House of Representatives. The difference is that then, its leader was Newt Gingrich, self-described “revolutionary,” who appeared ready and able to take the Democratic administration down. This time, the more affable Republican Speaker is John Boehner, an incrementalist by nature and an institutional loyalist. Whereas Gingrich was only too happy to make himself the major story, Boehner will be just as happy to let Obama do most of the talking. He may yet talk himself out of a job.