Published – Idaho State Journal, 02/26/12
I recall vividly an experience growing up on a farm years
ago when I claimed credit for doing something one of my brothers did. It was a
task assigned to me, which I failed to carry out. But my brother completed it
before I could. My father, in his wisdom, upon learning of my unearned credit,
sardonically asked me, “Don’t you know how dishonest that is?”
I did know it was dishonest, but that experience piqued my
attention to claims of credit unearned. And now that presidential politics are
into full swing, the claims of unearned credit are being self-proclaimed nearly
every day.
A visit to the official presidential reelection campaign
website reads like a bad fiction novel. Improvements in various sectors of the
economy and our collective financial viability as a country are claimed as
“accomplishments” of the president.
Obama claiming credit for an economic rebound is like an old
girlfriend of mine in high school who claimed credit for every time our Snake
River High School football team won. She claimed that whenever she went to a
game, we won. Just “showing up” caused the win. Correlation is not to be
mistaken for causation.
Certainly if he’s to be given credit for an improving
economy, we should be able to identify and quantify, to at least some extent,
what he has done to ameliorate our moribund economy. Any policy of his, any
legislative accomplishments, any executive orders that he has issued or
implemented should provide the evidence to validate his claims.
His three most significant legislative exploits provide no
evidence of causation for improving the economy. Obamacare certainly doesn’t
stimulate the economy, for it is laden with new taxes and fees imposed on
individuals and employers to be implemented over the next few years. And
actually when those new taxes hit, the adverse impact on the economy will be
considerable. For as Christina Romer, former chair of Obama’s Council of
Economic Advisors, revealed last year, "Tax changes have very large effects: an
exogenous tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3
percent."
How about the FinReg, Dodd-Frank financial regulatory reform? As with
Obamacare, there is nothing stimulative in it either. It only solidifies the
crony capitalistic relationship between Wall Street, the major banks, and
Washington by assuring further government intervention with institutions deemed
“too big to fail.” The costs of implementation at the private sector level will
likely result in higher fees, charges, and interest rates for financial
institutions to recoup the implementation costs. That’s definitely not
stimulative!
The claims for improving the economy must be in the president’s
“stimulus” package. According to
the Wall Street Journal, over half of the $850 billion ($1.1 trillion,
including interest) “stimulus” bill could be more correctly classified as
discretionary spending. The Congressional Budget Office “scoring” of the
stimulus package indicated that only 12 cents of every dollar would have a
stimulative affect on the economy within the first 18 months. The scoring
process clearly indicated the impotence of the “Stimulus” for creating positive
economic activity.
Then there must be some evidence in his executive orders then, a total
of 111 that he’s issued to date. Of those, most deal with regulation,
government agencies, commissions, and appointments. Perusing all the executive
orders I didn’t see one that was designed to augment the economy, improve job
prospects for out of work Americans, or stimulate economic growth.
In three years at the helm, in real world economics, there is only one
thing that I can recall that he did that had any potential to stimulate the
economy, and that was extension of the payroll tax holiday. And for the average
American that is fortunate enough to have a job, that amounts to $40 per month.
Even his unprecedented increase in government spending cannot be
considered as stimulative. There are some academic die-hards, many of whom are
currently serving in the administration, who still adhere to that aspect of
Keynesian economic theory. And it’s hard to understand why, unless it’s just
“bitter clinging” to an archaic ideology, for it’s failed every time it’s been
attempted, by any administration, including FDR’s.
The great Nobel
Laureate for economics, Milton Friedman, declared a couple of years ago, “unbridled
government spending is the single greatest deterrent to faster economic growth
in the United States today.” He’s probably rolling over in his grave as he
observes the unparalleled spending spree the federal government is engaging in.
Sorry, Mr. President, you have no grounds to claim credit
for the modicum of improvement we’ve seen since the recession officially ended.
Any improvement is in spite of your policies, not because of them. Just
“showing up” does not a win make. And as
my father taught me years ago, claiming credit where none is warranted, is
dishonest.
AP award winning
columnist Richard Larsen is President of Larsen Financial, a brokerage and
financial planning firm in Pocatello, and is a graduate of Idaho State
University with a BA in Political Science and History and former member of the
Idaho State Journal Editorial Board. He
can be reached at rlarsenen@cableone.net.