Aug 13, 2012, Vol. 17, No. 44 • By IRWIN M. STELZER
The latest jobs report should persuade all those who worry about the president’s economic policies but find him likable that enough is enough, and that policy trumps personality when it comes to deciding who should occupy the White House. Job creation remains anemic, the unemployment rate has ticked up to 8.3 percent, and the labor force participation rate continues to fall as more and more Americans choose the couch over tramping the streets looking for work. The Labor Department sums it up: Both the number of unemployed and the unemployment rate “have shown little movement thus far in 2012.” It should be clear that it is time for a change.
AP Mark Lennihan
The president has gambled the nation’s ability to recover from this recession on policies that include high taxes, more regulation, attacks on businesses and “millionaires and billionaires,” stimulus spending that ends up largely in the pockets of members of public service trade unions and campaign contributors, and huge deficits—gambled and lost. Like other obsessive gamblers who cannot recognize failure until they are ruined, he wants to double down—make the same bet again in the hope that this time he will roll prosperity instead of more joblessness. Ideologues, like addicted gamblers, reject experience as a teacher. And when they are gambling with other people’s money, they have little incentive to change, especially if they can count on a winning personality to persuade supporters to overlook the minor matter of oncoming penury.
To get our country back on a growth path we have to change course, which means that Mitt Romney has to win. Which means, in turn, that he will have to do more over the next three months than repeat what voters already know—that the Obama plan for America’s economic future is leading us to European-style stagnation and a level of indebtedness that a no-growth economy will never be able to repay. Romney will have to say what he plans to do if the voters give him the opportunity to redirect national policy. His plans will have to meet two criteria: They must be consistent with the conservative principle that government policy should provide a framework for markets to work, and they must meet some rough standard of fairness, which is much on voters’ minds in this day of increased inequality.
Here are a dozen points Romney might consider making. They are not the Ten Commandments: Dropping some and watering-down others is permitted. So are changes to accommodate the fact that politics is the art of the possible. What is not permitted is a continuation of a campaign that combines a minimum of forward-looking specificity with a maximum of backward-looking attacks, leading to an overall failure to explain what the heck is going on in our economy and how Romney will fix it.
Extend the Bush tax cuts for one year. With partisanship off the boil after the election, and Bill Clinton as an ally, this can be done quickly—if accompanied with a pledge to use this grace year to enact broad tax reform that would root out of the tax code the provisions that benefit the wealthy while retaining their incentive to earn more and create jobs. No more deductions for mortgage interest on second homes; no more special allowances for the oil industry; no more favored tax treatment for venture capitalists and hedge-fund operators. There are more, but you get the idea: The tax code has to be simpler and fairer.
Arrange for mortgage forgiveness that will actually increase what banks will retrieve from the mortgage mess, recognize reality on bank books, increase consumer spending, avoid creating even more underwater properties, and give the housing market a boost. New studies show it can be done.
Impose a moratorium on new regulations not urgently needed to save lives. That will be the pause that refreshes, and give us a chance to review the tens of thousands of regulations now in effect, cull those that are unnecessarily imposing burdens on businesses and costs on consumers, and see if the remaining regulations need supplementing. That will give businesses some of the certainty that has been sorely lacking, causing companies to sit on huge cash piles rather than subject them to the tender mercies of the Obama regulatory machine.
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