Politico’s Glenn Thrush reports this morning
that Republicans believe the GDP report showing the economy is shrinking gives them political “leverage” over Obama, since bad economic news is terrible for the President. But Thrush notes that this shouldn’t be the case, since the contraction was the result of spending cuts, which in theory should undermine the GOP argument that we should cut spending as deeply as possible:
The fact that the shock this time came from a plunge in defense/federal spending should, in theory, bolster Obama’s contention that budget-cutting and trimming entitlement spending is the worst thing for the economy right now. It should, in a more Spock-like world, be an argument against the sequester cuts and big changes to Medicare and Social Security.
Forget about that.
All nuance is lost in the howling gale of an economic “contraction” — and the advantage, at least in the current news cycle, shifts to a down-in-mouth GOP. It’s not likely to be a major shift in the dynamics of looming fiscal fights, but Republicans, in the words of one senior Hill staffer I spoke to this morning, “will take any leverage we can get.”
Thrush very well be right that people won’t take the right message from the contraction. But in a rational world, what should be glaringly obvious is that the belief that this gives the party “leverage” highlights how absurdly incoherent the GOP message about the economy has become. (Read Steve Benen for all the other problems here
The economic contraction was driven largely by a steep drop in defense spending. As Ezra Klein details
, this shows that “government is hurting the recovery” by “spending and investing too little.” As Ezra notes, “government spending and investment have, at all levels, been contractionary since 2010.”
Yet Republicans are responding to the news of the economic contraction by suggesting invalidates their view that we need to further cut spending to help the economy. Hence their claimed “leverage” in the coming battle over the sequestered cuts, half of which is to defense spending. Republicans are actively using the sequester to force Dems to agree to avert it by offsetting it entirely with other deep cuts to social programs, and no new revenues from the wealthy. In response to the contraction, John Boehner tweeted out this hashtag
In other words, the contraction confirms that we need more spending cuts.
Okay, look. If Obama doesn’t now, finally, explain Keynesian economics to the general public, using actual facts–such as the reason for the economic contraction–and point out that Boehner & Co. either are ignorant of the facts or are willing to deliberately misinform the public about such a critically important matter, then he should resign and let Joe Biden explain it as president.
I mean it.
Obama did a stellar job a week before his inaugural address explaining the debt ceiling law and what “raising the debt ceiling” means–and that ti does not mean what the Republicans’ campaign of disinformation was saying it means. He should do the same now, on this.
Presumably, he’ll enlist as his chief speechwriter for his State of the Union address a speechwriter who understands how to easily explain Keynesian economics and the current “contraction” statistics. But, just as with his inaugural address, he should not wait until that speech to expose the Republican game plan for what it is: a concerted campaign to misinform the public about critical facts, knowing that the public will not know the accurate specifics, and aware that–as Thrush says, outright–the mainstream press will not sufficiently (or at all) apprise the public of those fact.
In other words: that Romneyism–the flagrant lying, con artistry, as the chief modus operandi–is now at the very heart of what the Republican Party is.
The public did catch on to Romney by the fall. And, thanks largely to Obama’s statements at his press conference on Jan. 14 abou the debt ceiling, they caught on to that, as well. And if Obama makes an effort to explain to the public basic Keynesian economics, and cites actual facts, actual statistics, about the fourth-quarter contraction, they’ll catch on this time, too. And, maybe, finally, to the fact that the Republicans have decided upon a strategy of fraud in order to disassemble the social safety network, including Social Security and Medicare.
In his State of the Union address, he’ll have an opportunity to finally educate the public about the actual causes of the Greek meltdown, of the actual effect of Tory austerity in Britain, of the actual cause of economic near-collapse in Spain, in Italy, in Ireland, in Iceland–and of the actual effect of the safety net in Germany, in Holland, and elsewhere. And maybe he’ll even take that opportunity. But the State of the Union address is two weeks away. And in responding to Boehner’s tweet at #spendingistheproblem, there’s no time like the present. Or at least like the next few days. Just as with the fiscal cliff and the debt ceiling, the Republicans’ political leverage, whether real or fanciful, will turn out to be ephemeral.
Unless Obama remains mute.
UPDATE: Wow. Either Greg Sargent is channeling me, or I’m channeling him. He posted this
one minute after I posted my post on AB.
But as I say in my post, Obama shouldn’t wait the two weeks until the State of the Union address to begin making the point. Just as he didn’t wait a week until his inaugural address to explain to the public what “raising the debt ceiling” actually means–thus pulling the rug out from under Repubs’ disinformation campaign telling the public that it means increasing spending appropriations.
Sargent titles his post “Make strong case that spending cuts hurt economy, Mr. President!” (Amen.) He points out: that
Unfortunately, at times, Obama has diluted this message. During his 2010 State of the Union speech, for instance, the President proposed a temporary spending freeze, and said:
“Families across the country are tightening their belts and making tough decisions. The federal government should do the same.”
But I think it’s a mischaracterization to describe that as a dilution of the Keynesian message. It’s actually an outright misrepresentation of economic fact; that’s why that statement has been so detrimental. And, if necessary, Obama should expressly acknowledge that this was misleading about economic fact, and then explain exactly why.