Obama-nomics: Written on a Word Processor
Barack Obama is channeling Ronald Reagan. Not in policy (his proposed tax cuts are not that big) but in tactics. The question is: Can the president-elect convince Congress to spend well over $1 trillion without leaving any fingerprints.
Having learned from Reagan’s legislative successes—notably the Tax Reform Act of 1986—and from Bill Clinton’s failures—see health reform—it appears Obama will never propose any specific economic stimulus legislation. Instead, he is merely sending Congress ideas, and leaving the dirty work of writing a proposal to the Hill. The New York Times Jackie Calmes did a nice post on this the other day.
But not only is Obama’s stimulus what Jackie called the “the paperless plan,” his proposals themselves seem infinitely flexible. For instance, the Obama people let it be known that a key element of the stimulus would be a tax credit to encourage businesses to hire new workers. But when that idea ran into resistance, Obama, as they say, threw it under the bus.
By this morning, Obama aides put out the word that the jobs credit was A) dead or B) about to be significantly retooled. In its place, perhaps, new energy credits. Energy. Employment. Whatever.
It all reminds me of Don Regan, who was Reagan’s Treasury Secretary. The morning Treasury rolled out its detailed version of Tax Reform (known back in the day as Treasury I), Regan was questioned by reporters about some particularly controversial provisions. Not to worry, Regan shrugged, it is all written on a word processor. His clear implication: It was easy enough to rewrite. Btw, for those too young to remember, a word processor was something like a laptop, only it couldn’t get you on the Web.
Obama is coming to Washington with much the same attitude. He’s being even more clever when it comes to the exceedingly unpopular TARP. The incoming president wants Congress to authorize the second $350 billion of this bank bailout money, but instead of asking for the funds himself, he let George Bush do the heavy lifting on his behalf. Poor Bush, I’m sure, would rather be packing.
Don’t get me wrong. I had real doubts about the jobs credit. But the are serious economists who do not. It would have been nice if Congress, say, held a hearing to hear both sides of the argument.
Similarly, there is nothing wrong with a proposal as complex as the stimulus getting tweaked along the way. And, as Reagan showed, a certain amount of flexibility makes for excellent legislative politics.
But sooner or later, Obama, who voted present so often in the Illinois legislature, is going to have to get his hands dirty and take responsibility for unpopular, but necessary initiatives. That, after all, is why they let you stay in the big white house and use the fancy office.
Heutzutage kann niemand das Leben ohne Computer vorstellen. Was die Arbeit und die Studie wäre ohne sie aus?
In its simplest style, bondage could be keeping someone’s arms down whilst giving them a lap slide. With this circumstances there are no restraints in the least. Bondage is extra in regards to the eroticism of becoming under the handle of a different individual or the eroticism of having full handle through another person else.
It is not a political surprise that of the business tax breaks in the original stimulus package, the jobs tax credit is the one that was “thrown under the bus”. The politics of this is that liberals tend to be skeptical of any business tax breaks. On the other hand, business interests favor business tax breaks with few strings attached. The asymmetrical political forces lead to the current outcome: the stimulus package is modified to exclude a business tax break that was tied to job creation, while business tax breaks with fewer strings attached, and less research evidence of effectiveness, are still part of the stimulus package.
It might be useful for tax policy analysts to assume that, for political reasons, the stimulus package is likely to include some business tax breaks. Then the relevant policy issue is, which business tax breaks will be most effective, based on research.
There are various ways a revised New Jobs Tax Credit could be modified to alleviate liberal concerns about windfall gains for big business. The credit could be limited to net job creation, not preserving jobs. It could be limited to small business. An argument could be made that expanding small businesses may be more likely to face financing constraints that could be alleviated by a New Jobs Tax Credit that could be credited against payroll taxes. The credit could be made large enough that it could plausibly affect hiring decisions. If we wanted to further limit the credit, it could be designed like the Minnesota Employment and Economic Development (MEED) credit of the 1980s, that applied only to hires of new employees who were unemployed AND were net additions to employment. However, none of this is likely to happen unless there are groups with some political influence that are willing to support business tax credits with significant strings attached.