• AUGUST 31, 2011

• By MELANIE TROTTMAN

To newly inaugurated Barack Obama and his prime-the-pump technocrats, the logic seemed so simple. America’s problem was a struggling economy. The solution was to spread around even more borrowed government money. The result would be a return to prosperity.

But after nearly three years and $4 trillion in borrowed “stimulus,” things have only gotten worse. Unemployment is stuck at 9.1 percent. Consumer confidence is approaching a record low.The stock market is tanking. National debt is increasing at a rate of $4 billion a day. Economic growth has almost vanished. America’s creditworthiness has been downgraded. The housing market is still depressed. Food and fuel prices are skyrocketing. In response, only 26 percent of the public expresses confidence in the president’s handling of the economy.

Apparently, as even the president himself recently confessed, government cannot so easily manufacture “shovel-ready” jobs. But it did far better at scaring cash-hoarding businesses into a historic hiring paralysis with nonstop talk of higher taxes, more national debt, more regulations, them vs. us class-warfare rhetoric, threatened government shutdowns of private plants, and higher-priced energy.Obama is still promising to borrow more for “infrastructure” and “jobs.” Despite nearly $15 trillion in federal debt, the administration apparently wants to defy the rules of logic and do more of what made things worse in the first place, under the euphemism of “investments.” American popular culture has coined all sorts of proverbial warnings about such mindless devotion to destructive rote: “Don’t flog a dead horse,” “If you are in a hole, stop digging,” and “Insanity is doing the same thing over and over and expecting different results.” (more…)

• JUNE 29, 2011

The return of the deduction phase-out gambit.

• The White House wants Republicans to agree to tax increases that no one wants to call tax increases, and for an insight into this political method let’s focus on one proposal in particular—the phase-out of itemized deductions for upper-income taxpayers. We hope the tea party is paying attention, because this kind of maneuver is why people hate Washington.

The Obama administration is 0-for-3 in meeting economic expectations. In 2009, President Obama and his advisers believed the bountiful stimulus package would give the economy a strong jolt. It didn’t, and still hasn’t. In 2010, Obama declared Recovery Summer and predicted a surge in employment. The economy lost 283,000 jobs over the summer. This year, Obama expected a significant ratcheting up of jobs and growth. There’s been a ratcheting down.

The White House always has an excuse. Obama’s economic policies are never at fault. The problem in 2009, according to Obama? The economy was in worse shape than he’d feared when he took office. In 2010, economic adviser Christina Romer said the dip in jobs was unexpected. No doubt it was, but that’s a lame explanation. And Obama stubbornly refused to express regret for having proclaimed Recovery Summer in the first place.

Now, two years after the recession officially ended, the excuses for economic stagnation and puny job growth are stale and implausible. Obama didn’t offer any in an economic speech in Toledo a few hours after bad job numbers for May were released last week. Romer’s replacement, Austan Goolsbee, dismissed the 9.1 percent jobless rate as a bump “along the road to recovery.” House Democratic whip Steny Hoyer blamed the Bush administration—really, he did. (more…)