Last week, Alex put up a good takedown of the talking points from Obama’s State of Union Monarchial Address. But I’ve thinking about it for a week and there’s one thing I keep circling back to:
Almost everything that Obama claims credit for has come from policies he opposed.
A list of the things that Obama is claiming credit for it too long for a blog post since I’m pretty sure he’s now claiming credit for the sun continuing to rise. And that’s understandable: a good job description of “President of the United States” would be “someone who takes credit for anything good that happens”. But you can burrow down to several specific things he’s crowing about. And the striking this is that almost all of them are the result of policies he has opposed.
First, Obama took credit for the shrinking budget deficit. Putting aside that it’s easy to shrink a deficit after you’ve exploded it, the progress on the deficit, such as it is, has come from things Obama or his liberal travelers opposed — budget rescissions and the sequester. And it came without the thing they insisted was needed: massive tax hikes on the rich. The reason the deficit is smaller is because Republicans held the line on spending, keeping the level of spending flat for the last four years despite endless and repeated demands from Obama and the Democrats for ever more “stimulus” spending. The Keynesians out there, having caught their breath from screaming about how sequestration would wreck the economy, are now screaming that the 2009 stimulus finally worked, six years down the road. Whatever supports their bias, I guess.
(It should also be noted that the deficit may start rising again as soon as next year because of the failure to address entitlement spending.)
Obama also took credit for falling gas prices and booming oil production. But oil production on Federal land has actually fallen over his tenure. And he has opposed new energy projects like Keystone XL. His party has opposed fracking and just got it suspended in New York on dubious environmental justification. This is the man who, in 2012, specifically said we couldn’t drill our way out of this and that $2 gas was a fantasy. To be fair, I think the low in gas prices is temporary and prices will start rising again. But the overall point remains: increased oil production was not supposed to either be possible or to help with the energy crunch. And how does Obama reconcile this energy boom with his demand for restrictions on fossil fuel exploitation to combat global warming? He doesn’t. He simply talks out of both sides of his mouth.
(Speaking of global warming, Obama touted the agreement with China. But as I pointed out at the time, the CO2 reductions under that agreement are ones we were likely to meet anyway due to things that having nothing to do with Barack Obama: increased fracking and improvements in energy efficiency in the private sector.)
The biggest boast from Obama was about the economy, which had its healthiest quarter in 15 years. Obama is spiking the football on the economy and that’s understandable, given the howling recession he inherited. But the improvement of the economy came not when we got the stimulus, not when we got Obamacare, not when we passed Dodd-Frank but when we stopped persuing Obama’s agenda. Stimulus spending stopped. Subsidies stopped. Keynesian bullshit stopped. And suddenly, we’re doing better.
In fact, we’re just now finding out that a particularly vital piece of liberal received wisdom may have been garbage:
How much did cutting unemployment benefits help the labor market?
Quite a bit. There is a new NBER Working Paper on this topic by Hagedorn, Manovskii, and Mitman, showing (once again) that most supply curves slope upward, here is one key part from the abstract:
In levels, 1.8 million additional jobs were created in 2014 due to the benefit cut. Almost 1 million of these jobs were filled by workers from out of the labor force who would not have participated in the labor market had benefit extensions been reauthorized.
There is an ungated copy here (pdf). Like the sequester, this is another area where the Keynesian analysts simply have not proven a good guide to understanding recent macroeconomic events.
You see that? When the Republicans said that extended unemployment benefits were keeping people out of work, they were pilloried for it as heartless ignorant savages. We were told it was cruel to cut off unemployment benefits based on half-baked theories of labor. Now this is only a working paper, not a refereed one. But the simple fact is that the labor market has surged as unemployment benefits were cut off.
I’m willing to give Obama credit for some things. It’s true that more people are insured. But that tends to happen when you make being uninsured against the law (excuse me, subject to a tax). And the expense of insuring those people has proven as steep as skeptics predicted. And I’ll give him some credit for drawing down our overseas commitments (although the idea that we are out of Afghanistan is laughable). And … um … I’ll even give him credit for part of the achievements above. He did, after all, agree to the sequester. I’ll agree that the stock market is booming. But it wouldn’t be if Obama had gotten his demands for more taxes on capital gains, a financial transactions tax and a push to address income inequality.
But Obama’s biggest achievements are not his … or at least not his alone. The lion’s share of the credit has to go to the Republican Congress for ignoring everything he wanted to do. They didn’t restrict energy exploration, they didn’t pass more dunder-headed stimulus spending, they did hold spending flat, they did cut off unemployment benefits. Every single one of those things was predicted to be a disaster and yet none of those disasters have materialized. And now Obama and his Keynesian allies want to claim credit.
I don’t expect this to matter to the Democrats. Keynesian economics, command-and-control regulation, the wisdom of the welfare state — these things are articles of faith. But the evidence that they work — least of all that they deserve credit for the “Obama economy” — is scant to say the least.