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The President's Truce with Business

Obama is out of ammunition – money.

12:00 AM, Jul 17, 2010 • By IRWIN M. STELZER
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Obama is hoping that he can persuade the business community that he is really on its side. He contends that his $862 billion stimulus package, and measures such as his refinancing of General Motors and Chrysler, created 3.6 million jobs and added 3.2 percent to the second-quarter growth rate, and that his bailout of the banks prevented a financial meltdown. He notes that whereas when he took office the nation was losing 700,000 jobs per month, the private sector has gained jobs in each of the last six months. Instead of destroying capitalism, he has saved it, he contends, in much the same manner as did Franklin Roosevelt when justifying the reforms that were the core of his New Deal.

Note, however, that a truce is not a peace. The president plans to renew his attack on the private sector immediately after the November congressional elections. The defeated congressmen return to Washington for a lame-duck session that runs until the newly elected congress is seated early in January of next year. That gives the president two months to push through bills that his defeated colleagues, perhaps hoping he will find jobs for them in the ever-expanding bureaucracy, can support with impunity: They would have nothing more to lose. Already, the Democratic chairmen of key committees, aware they might lose control of congress, or at least the House, are preparing bills that their fellow Democrats, when seeking reelection, dared not support: more spending; ending the requirement that union-certification elections be conducted by secret ballot; energy legislation; increases in taxes on families earning more than $200,000 per year and in inheritance taxes.       

Meanwhile the economy labors. Growth is slowing, job creation is lagging, unemployment remains high, consumer confidence is plummeting, and the Federal Reserve Board is now guessing that the economy will not recover fully for some five or six years. Obama once said, “I would rather be a really good one-term president than a mediocre two-term president.” Absent some policy corrections, he might turn out to be neither, at great cost to the American economy.   

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