Obamanomics, leaving on a jet plane

June 30, 2011

Buckle your seat belts low and tight, America, there’s going to be turbulence all the way to Election Day, 2012. It’s only the summer of 2011 and already we have kids vs. corporate jets, courtesy of the White House political machine.

The most newsworthy bit of President Obama’s press conference certainly had nothing to do with economics or America’s precarious fiscal position. Recall: The president’s most recent budget plan would add $9.5 trillion in cumulative new debt over the next decade. Eliminating a tax break for the purchase of corporate jets – it’s called “accelerated depreciation” and Obama has endorsed the deduction twice before to boost growth and create jobs – would save $3 billion, or 0.03 percent of that total.

Yet this is the place where the president has chosen to stand his ground, to say “Here and no further!” Obama astride the bridge Khazad Dûm. He challenged the GOP to “go talk to your constituents, the Republican constituents, and ask them, are they willing to compromise their kids’ safety so that some corporate-jet owner continues to get a tax break.”

Really? Would the food safety system – or National Weather Service or National Institutes of Health – would suffer if government extracts a few hundred million less a year from taxpayers? Is Uncle Sam really running such a lean-and-mean operation? Of course not. McKinsey consultants have found that if the U.S. public sector could just halve the productivity gap with the private sector, its productivity would be as much as 15 percent higher and would generate annual savings of up to $300 billion a year. If the president wants to get rid of corporate tax breaks, he should offset them by lowering the sky-high U.S. corporate tax rate while also cutting spending.

But the clumsy attempt at class warfare probably wasn’t even Obama’s most disheartening moment during the presser. Several others were at least equally as bad:

1) The president unnecessarily raised the specter of default if the debt ceiling is not raised by early August:

By August 2nd, we run out of tools to make sure that all our bills are paid.  So that is a hard deadline.  And I want everybody to understand that this is a jobs issue.  This is not an abstraction.  If the United States government, for the first time, cannot pay its bills, if it defaults, then the consequences for the U.S. economy will be significant and unpredictable.  And that is not a good thing.

Yet as the Bipartisan Policy Center noted in a new report, the federal government will take in some $170 billion in August while debt payments only equal $29 billion. Actually, that’s enough revenue to cover debt payments, entitlement (Social Security, Medicare, Medicaid) payments, unemployment benefits and payments to active-duty military with billions left over. It might be messy and chaotic, but that is not the same as default.

2) The president perpetuated this myth: “You can’t reduce the deficit to the levels that it needs to be reduced without having some revenue in the mix. “ Yet Rep. Paul Ryan’ s Path to Prosperity does just that, even while assuming — to satisfy the Congressional Budget Office — the economy grows at a snail-like 2 percent pace year after year for decades. If we need more money, grow the economy faster.

3) Maybe the biggest economic issue of the year, other than the anemic recovery, is the National Labor Relations Board attack on Boeing and its decision to open an aircraft assembly line in right-to-work South Carolina. This de facto attempt to impose wage controls on one of America’s largest exporters by limiting where it can do business is a dagger aimed at the heart of the American free enterprise system. But here, sadly, is the president again leading from behind:

Essentially, the NLRB made a finding that Boeing had not followed the law in making a decision to move a plant.  And it’s an independent agency.  It’s going before a judge.  So I don’t want to get into the details of the case.  I don’t know all the facts.  That’s going to be up to a judge to decide.

Who knows, maybe the president just has something against jet airplanes,  akin to his apparent dislike of those job-killing ATMs. But this seems certain: Obamanomics took flight in 2009 as a purist Keynesian experiment in economic management from high above. The ultimate Dreamliner for Democrats. Now, two-and-a-half-year later, it’s begun its sputtering descent.

9 comments

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[...] at Reuters this morning, James Pethokoukis piled on: Obamanomics, leaving on a jet [...]

[...] …leavin’ on a jet plane: …the clumsy attempt at class warfare probably wasn’t even Obama’s most disheartening moment during the presser. Several others were at least equally as bad… [...]

A broken clock is right twice a day. The democrats can’t even manage that level of accuracy.The recovery starts when Obama and every elected democrat loses their jobs.november 2012 can’t come soon enough.

Posted by cubanbob | Report as abusive

I don’t know about disliking jets per se – he seems to love riding around in the 747 we bought for him. Perhaps he just doesn’t want anyone else doing it.

Posted by HogarthKramer | Report as abusive

There must be some mistake. Reuters would not print anything critical of the One.

Posted by Dantes | Report as abusive

The worst thing that could happen to Democrats is to see their purist Keynesian experiment put into practice. As expected, it has failed spectacularly. They were better off when their utopia remained a theoretical. Now we can point to it as a prime example of everything that is wrong with their economic philosophy.

Posted by wolfie773 | Report as abusive

I for one appreciate that Reuters would publish such a coherent report. It seems that the failures of the Obama Adminitration are overwelming and his testy arguements in his presser are not supported by facts. Once again Obama has shown he can run, but cannot lead.

Posted by Dilbert-on-Ebay | Report as abusive

[...] You didn’t realize, did you, that corporate jet owners, enabled by the GOP (well, not exactly), are siphoning money away from every essential government program, casting the young, the old, the sick, the disabled, and the ignorant adrift, to scrape by on contaminated food and sub-par weather forecasting. [...]

re: Keynesian economics–they’ll just pretend that “there wasn’t enough stimulus,” or that “it was starting to work and would have succeeded given more time.” They’re masters of self-deception and true believers in the socialist model even though it’s died of free-market stifling, untenable government growth everywhere it’s ever been attempted. They fancy themselves smarter than anyone in history and believe they can overcome human nature and economic reality with their theoretical models and diligent wishing. And when they succeed, as they almost inevitably do (they are tenacious to the point of obsession and the people too eager for “free” benefits payed for by others), they will have destroyed the greatest nation modern civilization has ever known.

Posted by JWnTX | Report as abusive

Is there any bottom to the pit of this guy’s lack of understanding how the real world works?

Thank a liberal for their ‘gift’ to America. Then slap them.

Posted by RangerDave | Report as abusive

[...] and unprecedented effort to dictate where Boeing can build a new plant, he suddenly deems it inappropriate to get involved: Essentially, the NLRB made a finding that Boeing had not followed the law in [...]

[...] necessarily represent those of the Chicago Daily Observer.] The president took his opening salvo, starting his campaign a year early, demonizing yet another group of Americans. Sen. Marco Rubio (R-FL) calls him out on the Senate [...]

Thanks for a sane commentary on a sickening debacle, James.
I simply don’t know how anyone who is ‘sane’ or has a brain, can defend this jokester. The other option is that they also hate America and it’s better qualities, like Zero and his entourage. Recall Michele’s statement “for the 1st time in my adult life I am proud to be an American” (of course her husband had to be the center of their constituency attention by this time, to warrant such pride on her part… )

All I can say is that Joe Farah with WND.com has the corner on the ongoing saga of the fraud this man and his handlers are engaged in, with the fabricated history everyone is trying desperately to keep together. All we can do is keep the pressure up to show this fraud the early EXIT from the stage!! Once he is removed from office, lawsuits can proceed to prosecute him and his handlers and apologists and advisors for the incredible fraud to the American people, all UNDER OATH of office.
God help America, be STRONG and faithful to truth and honor, under God. If bloodshed is required, so be it, our forefathers secured these liberties and sealed the requirements by giving theirs!!!

Nobody FORCED the jokester Zero into the office! He freely sought it and accepted the conditions. Now he must accept the consequences.

Posted by pjay03 | Report as abusive

[...] Obamanomics, Leaving On A Jet Plane   [...]

[...] Obamanomics, Leaving On A Jet Plane   [...]

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