When Republicans critique Obama, they critique their own policies
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