When Republicans critique Obama, they critique their own policies

February 5, 2013

To all the vaunted traditions of the absurd partisan charade in Washington, we can now add another: Republicans attacking President Barack Obama for the results of their own policies. Most recently we saw it last Wednesday. No sooner did the Bureau of Economic Analysis (BEA) announce Wednesday morning that our gross domestic product had shrunk by 0.1 percent in the last three months of last year than Republicans began disseminating misleading talking points.

In an instant missive titled “President 0.1%,” the Republican National Committee complained, “Four years and $5.8 trillion later, Obama presides over an anemic economy.” Quoting Reuters, the RNC ominously warned, “The contraction ‘could spur fears of a new recession…” “Anti-growth policies and an anti-business White House produce just that — a lack of growth,” declared Representative Sam Graves, R-Mo., chairman of the House Small Business Committee. “The bottom line is that America’s economy continues to struggle primarily due to President Obama’s penchant for political brinkmanship and the pervasive uncertainty caused by his focus on higher taxes, regulation and Obamacare,” said Representative Kevin Brady, the Texas Republican and incoming chairman of the Joint Economic Committee.

On Friday, we learned that the economy added 157,000 jobs in January, 247,000 jobs in November and 196,000 in December, well above earlier estimates. The GOP was not so eager to discuss that.

In fact, it was reduced government spending in anticipation of severe spending cuts to come this year from the budget sequestration process or a deficit reduction deal that slowed economic growth in the fall. Ezra Klein of the Washington Post writes:

In 10 of the past 12 quarters, total government spending and investment has fallen, dragging down the Obama economy. That’s in large part because state and local cutbacks have been so severe, but it’s also because federal spending and investment has, on the whole, been falling since 2010 … Over Obama’s first term, falling government spending and investment snipped, on average,  .11 percentage points of GDP off of [annualized] quarterly growth.

This is, as Klein notes, “a simply unprecedented response to a recession.” During the last three Republican presidencies, government spending has consistently grown and added to GDP. According to Klein’s calculations, the economy would have grown 0.8 percent more per year on average since 2010 if Obama had spent at the same rate as Reagan. 

That’s math. The BEA notes something similar, attributing the fourth-quarter GDP numbers partly to “negative contributions from … federal government spending.” The Conservative government’s austerity program has had the same effect in the UK. 

Fear that Republicans would refuse to make a deal to avoid the fiscal cliff may also have played a role in limiting business expansion or consumer spending. Republicans are fond of proclaiming the virtues of offering certainty about future policy to the business community, but then they threaten to tank the economy unless they get a deficit reduction package consisting solely of spending cuts, even though they do not control the White House or the Senate. They did exactly this with the debt ceiling in 2011, going on to cynically blame Obama for the credit rating downgrade from Moody’s they themselves had brought upon us. They are currently taking the same attitude toward the next debt ceiling increase, due in a few months. 

The Republican approach — demanding policies that hamstring the economic recovery and then blaming Obama for their inevitable result — began with employment data, circa 2010. As reliably as the Department of Labor released employment statistics for the previous month, Republicans immediately rushed to blame President Obama for the slow pace of job growth.

Their complaints were deeply hypocritical. Here’s a typical statement, from House Speaker John Boehner from June 1, 2012, regarding the employment data for May: “President Obama’s failed policies have made high unemployment and a weak economy the sad new normal for families and small businesses.” During the month in question, the private sector added 82,000 jobs while the economy lost 13,000 government jobs. This has been the story ever since the Recovery Act’s spending ran out: Job growth was undermined by local governments laying off workers as they faced deficits and could get no more help from Washington because of Republican opposition. Nonetheless, Republicans used Boehner’s line of attack to great effect in 2010, and they hoped to do the same in 2012. 

As the Brookings Institution noted in August 2012, “public-sector employment (i.e., federal, state, and local government jobs) declined in 10 of the past 12 months, in sharp contrast to 29 consecutive months of private-sector job growth.” And as the New York Times reported in January, “Over all —  including a decline of 12,000 public sector jobs in the Labor Department report for December —  government employment is down 2.6 percent over the last three years, compared to a decline of 2.2 percent in the early Reagan years.” And yet Mitt Romney campaigned on a promise to trim public sector payrolls even further, going so far as to mock Obama for suggesting hiring cops, teachers and firefighters. Perversely, Romney and his party claimed that the economy grows faster and adds more jobs if the government reduces spending. 

Most Republicans aren’t making it, but there is a real conservative argument to be made, advanced by the likes of Ron Paul: that fiscal and monetary stimulus prevent the economy from reaching true bottom and clearing out the “malinvestment.” An intellectually honest articulation of this view holds that a worse short-term contraction is the price for long-term health. Instead, Republicans call for austerity, and point to its undeniable downside — a short-term drag on economic and job growth — as evidence that Obama’s supposed profligacy has failed. It is a perfect closed loop of reasoning: Austerity thwarts growth, and slow growth proves its time for more austerity. Unfortunately for them, that is not what the American people voted for in November. 

PHOTO: Speaker of the House John Boehner bangs the gavel during the first day of the 113th Congress at the Capitol in Washington January 3, 2013. REUTERS/Kevin Lamarque


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Well, they’re trying to pin the results of their own policies to Obama, but the public isn’t falling for it.

Posted by KyuuAL | Report as abusive

Curious, I wonder what would be the GOP’s position if R-money had won the election. I can think of two possibilities.

One, the GOP would still attempt to pin the blame on Obama’s policies during his first term. Of course it is okay for them to blame Obama in that scenario but it is not okay for Obama to blame Bush for the financial crisis and out of control spending. What’s good for the goose is apparently, not that okay for the gander.

Two, they could go at this in a completely different direction by claiming that the anemic growth and reduced government spending is needed to ensure our future financial security as a nation. You know, the whole ‘necessary and honorable sacrifice’ schtick.

Just your standard hypocritical, rhetroical BS coming the neo-cons.

Posted by blah77 | Report as abusive

The undeniable fact is that a mountain of government “stimulus” has not changed the no/slow growth economy. If the theory were correct, the economy should be booming – it is not. It is more likely that the mountain range of government debt is the millstone around the economy’s neck.

Posted by SayHey | Report as abusive

No stimulus is going to work if the private sector refuses to spend their excess liquidity. Look it up, companies have been hoarding cash since financial crisis. Among the S&P 500 companies, their cash to current asset percentile has been hovering at 27-28% when compared to their 2007 ratio of 20% and 2000 ratio of 15%. This is doubly absurd considering that their cash equivalent assets is not earning much more than what you and I are getting in our saving/timed desposit accounts. There is far more blame to go around than you can possibly fathom (or comprehend apparently).

Posted by blah77 | Report as abusive

This, as today mouthpieces on the left are madly spinning the threat of sequestration as the GOP’s fault, when in fact it was Obama who first proposed it, insisted it become law, and then famously said he would veto any attempt to circumvent it.

Posted by Yashmak | Report as abusive

To be completely fair, both parties make completely stupid and untrue digs at the other party. The Republicans did not invent it, although it is true that they appear to be masters of mendacity.

The main stupidity of the GOP, however, is that the Republican Party — far more than the Democratic Party — has defined itself in terms of President Obama, to the point that the Republican Party will cease to exist on January 20, 2017, because someone else will become president at that time.

The Republicans do not appear to be able to comment on an significant policy issue without doing so in reference to President Obama. This increases perception that the Republicans are themselves devoid of ideas and are not capable of doing anything other than stare in disbelief at the fact that Barack Obama is president of the United States. (And that perception is almost certainly true, since, if it were not true, the Republicans would have been able to do something in the last four years that was not in some way a reference to President Obama.)

If the Republicans want to mean more than nothing, they have to stop defining themselves as the anti-Obama party. The fact that Obama has won two national elections should underscore that fact. “We hate the guy you voted for” is not the way to appeal to the electorate.

Posted by Bob9999 | Report as abusive

blah77: the government should operate like the private sector and have cash reserves instead of just adding more debt.

neither the left nor the right has all the answers, this divisive mentality fuels this mess.

Posted by tougar | Report as abusive

Though the last election results were promising, I’m not at all convinced that the Republicans don’t have another volley or two, at least, yet to unleash on a nation whose people are suffering from too much financial burden as it is. Whether they are able to convince a majority of unsuspecting, uninformed, Americans that they, the GOP, need to be put back into a position of greater power in order to “prove” that their policies are good for America, or that they are able to continue thwarting all other attempts to make improvements in how we’re running our country, either way paints a dangerously ugly picture for our future. Sometimes a wounded beast is the most dangerous. Right now the Republican Party is a wounded party, and they’re wasting no time in trying to devise ways of regaining power, including tampering with the electoral processes in important swing states and coming up with more effective ways of bamboozling the American public regarding their plutocracy-promoting policies.

It’s clear from the election results that a majority of Americans think we’re better off with policies promoted by Democrats than those espoused by Republicans. What hasn’t happened is a majority becoming alarmed enough at what Republicans have done, as well as what they want to do, to shoot the wounded beast once and for all so that they can no longer continue their dismantling of all that works for Americans.

Republicans have made themselves the enemy. I hear it in their rhetoric, the way they attack our government and a majority of the American people. Everyone’s bad but them. Also, there seems to be a rejection of democracy that has been sweeping through a majority of people on the right. Increasingly, they are unwilling to accept policies that a majority of the country supports. I worry about where it’s going to take us. I hear some crazy things from otherwise intelligent people, people who consider themselves conservatives. The majority needs to be more demanding, and less accepting of rightwing policies that a majority believe are bad for America.

Posted by flashrooster | Report as abusive

tougar: It’s not that simple. Just because a company holds a lot of cash in reserve doesn’t mean that they aren’t taking on debt at the same time. Corporations issues debt instruments with varying maturities just like our federal/local governments.

With that said, despite the cash hoarding, capital expentures for these same companies have also risen during the same time frame. How are corporations funding these expenditures if they aren’t actually deploying that cash reserve? Simple, debt issuance. Rates have been been at a historical low so the cost of finance is far less than before. In essence, what’s true for people refinancing their mortgage also holds true for companies. This brings up the next question of why are they sitting on large piles of cash then? Are they using it for share buybacks or dividend payments? Nope, both of those figures have actually decreased or flatlined since the great recession.

Frankly speaking, the S&P 500 corporations are trying to have their cake (abnormally large cash reserve) and eat it too (low cost to finance debt). Is it any wonder that despite the sluggish GDP expansion, anemic wage growth and tepid economic recovery, most large U.S. corporations are still managing to post record profits quarter after quarter?

Posted by blah77 | Report as abusive

I am actually more concerned by central bank balance sheet expansion than borrowing per se. Bernanke and Company have been monetizing junk collateral, and at some point will need to cash in collateral.

Posted by SanPa | Report as abusive

Republicans need to listen to real Americans instead of Rush Limbaugh. Limbaugh is dragging the Republicans down to his pathetic level, and that will destroy the Republican party.
But anyone or any group stupid enough to listen to Limbaugh, Hannity, and Beck, deserves to be an irrelevant nothing.

Posted by americanguy | Report as abusive

Where is the outrage at the American media’s failure to point the finger at the Republicans for wanting America to fail? They are trying their darndest to send America down the path of global irrelevance, by opposing every little thing the Obama administration proposes. The American public must be more vocal on every issue or America will actually become more broken down and irrelevant!

Posted by Beauciel | Report as abusive

@SanPa true. But don’t expect the GOP to address that until the disaster begins. No doubt they will blame the President when it does.

Posted by krimsonpage | Report as abusive

When the GDP data was released, i took a look and it’s obvious that reduced gov spending drove it, whereas increased private sector spending did not increase enough.

2 clear questions…:
– why did Obama not come out and say that the contraction was gov driven and that private GDP had expanded?
– why are my fellow citizens generally too stupid to look at numbers and mindlessly follow FoxNews or MSNBC (depending on perspective) both of which spew rubbish.

Posted by GA_Chris | Report as abusive