Commentary Magazine


Topic: economy

No Alternative to American Leadership

The prize for least convincing op-ed article of the day–admittedly a close contest, given all the contenders one can choose from–goes to Kwasi Kwarteng’s New York Times article, “Echoes of the End of the Raj.” Kwarteng, a British Conservative parliamentarian of African ancestry who has written a book about the British Empire, claims (have you heard this before?) the U.S. is in rapid decline and can no longer afford the price of global power, or as he calls it, empire. Those interested in a more comprehensive deconstruction of this unconvincing argument should turn to Bob Kagan’s fine new book. I want to focus here on only one of Kwarteng’s egregious statements.

“America’s position today reminds me of Britain’s situation in 1945,” he writes. Really? He may be the only one who sees the parallels. As it happens, my forthcoming book, “Invisible Armies: An Epic History of Guerrilla Warfare from Ancient Times to the Present,” which will come out in January 2013 from W.W. Norton & Co.’s Liveright imprint, contains a short section describing what Britain looked like in 1945 and the years immediately afterward. Here is part of what I write:

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Are Women Hurt the Most in Job Market?

Mitt Romney said yesterday that women lost 92.3 percent of all jobs lost under the Obama administration, a claim that earned the suspicious distinction of “true but false” from the Washington Post fact-check team. The reason for this contradictory finding? While WaPo conceded the statistic was mathematically accurate, they added the odd, squishy disclaimer that it “may simply [be] a function of a coincidence of timing — a brief blip that could have little to do with ‘Obama’s job market.’”

But while it might be unfair to say Obama’s policies are fully responsible for the disproportionate impact the recession has had on women, there’s no denying that fact that women have been hit hardest. Even WaPo fact-checker Glenn Kessler notes this in his analysis:

In other words, men did lose more jobs in the recession. Now that the economy is growing again, men are recovering jobs at a faster pace than women.  In fact, the latest employment report shows that male participation in the work force was up 14,000 while female participation fell 177,000, in part because women tend to work in retail or government jobs (such as teaching), which have been cut in recent months.

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Despite Obama’s Poll Numbers, Romney Still Positioned for Strong Challenge

Today’s Washington Post-ABC News Poll is being touted by Democrats as a key moment in the 2012 election because for the first time, President Obama is shown as getting over the 50 percent mark in terms of job approval and in a head-to-head matchup with Mitt Romney. These are encouraging numbers for the president, but Democrats shouldn’t start mailing out inaugural ball tickets just yet. A close reading of the poll as well as the political context in which it was taken shows that the president is still highly vulnerable on a number of issues, leaving likely Republican nominee Mitt Romney still in position to make a strong challenge this fall.

First, it should be noted that the poll is only of adults, not registered voters, let alone likely voters, so its results should be taken with a shovelful of salt. The poll sample is also skewed to the left as the respondents’ party affiliation showed 34 percent Democrats to only 23 percent Republicans, figures that do not reflect most national samples of party loyalties. Just as important, the poll shows widespread dissatisfaction with the president’s handling of the economy, no confidence that a recovery from the last recession has occurred as well as a belief that the country is on the wrong track. There is no question that Obama’s position is far stronger than it seemed a few months ago. But given that the full impact of rising gas prices has not yet been felt in the country and that Romney is only now just emerging as the GOP standard-bearer after almost a year of non-stop bashing from his party opponents, these results ought not cause Democrats to celebrate too much or cause too much despair among Republicans.

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Obama’s Sign of Madness

During remarks in Portland, Maine, on Friday, President Obama said, “We won’t win the race for new jobs and new businesses and middle-class security if we cling to this same old, worn-out, tired ‘you’re on your own’ economics that the other side is peddling. It was tried in the decades before the Great Depression. It didn’t work then. It was tried in the last decade. It didn’t work. You know, the idea you would keep on doing the same thing over and over again, even though it’s been proven not to work. That’s a sign of madness.”

You might think that a man who is on track to have the worst jobs record of any president in the modern era and is presiding over the weakest economic recovery since the Great Depression — not to mention the first credit rating downgrade in American history, the longest stretch of high unemployment since the Great Depression, chronic unemployment that is worse than the Great Depression, a housing crisis that is worse than the Great Depression, a standard of living for Americans that has fallen further and more steeply than at any time since the government began recording it five decades ago, and a record increase in the number of people who are in poverty — would be a little more careful when it came to lecturing the rest of us when it comes to what works in economics.

You might even say it was a sign of madness.

 

Good Signs in February Jobs Numbers

In yet another sign of economic improvement, the latest jobs report showed that the U.S. added 227,000 jobs in February, while the unemployment rate stayed at 8.3 percent. The Hill reports that employment numbers from previous months have also been revised up:

The number is slightly better than expected and represents the third straight month the economy added more than 200,000 jobs. That’s good news for President Obama, who has seen his reelection chances improve with the better labor market.

The report from the Bureau of Labor Statistics also revised figures for December and January up from 203,000 to 223,000, and from 243,00 to 284,000, respectively.

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More Evidence of a Weak Economy

The Department of Labor releases the unemployment figures tomorrow morning. But here is a noteworthy economic finding. Unemployment, as measured by Gallup without seasonal adjustment, increased to 9.1 percent in February from 8.6 percent in January. The 0.5-percentage-point increase in February compared with January is the largest such month-to-month change Gallup has recorded in its not-seasonally adjusted measure since December 2010.

There’s more. In addition to the 9.1 percent of workers who are unemployed, 10.0 percent are working part time but want full-time work. (This  percentage is higher than the 9.6 percent of February 2011.) As a result, in February Gallup’s underemployment measure, which combines the percentage of workers who are unemployed and the percentage working part time but wanting full-time work, increased to 19.1 — or almost one in five people.

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Britain Shows No Sign of Shaking Addiction to Debt, Taxes and Regulations

With British Prime Minister David Cameron’s impending state visit next week, we can expect to hear a good deal about – though see nothing very much done about – Afghanistan, the NATO Summit, Libya, and Syria. But we’re also likely to get a smattering of commentary about Britain’s parlous fiscal position. If we’re lucky, the media will talk about “Tory spending cuts.” If we’re really lucky, they’ll call them “savage.”

Writ large, it’s useful to remember one thing about these spending cuts: they don’t exist. While some departments have indeed been trimmed, others – such as debt interest, healthcare spending, foreign aid, and contributions to the EU– have expanded. The net result is that state spending in Britain has not been cut – it is still going up. Most of the noise about cuts – nay, even savage cuts – simply reflects the media’s and the left’s definition of austerity, which they understand as meaning any increase that is not as large as they wish, or as a previous government had planned.

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Gingrich on the “Age of Austerity”

Talking Points Memo flags this “austerity” criticism from Newt Gingrich as a sign the speaker is out of touch with the rest of the Republican Party:

The 2012 Republican presidential candidate was asked by NBC’s David Gregory on “Meet The Press” whether his hopes for a U.S. colony on the moon fly in the face of the GOP’s fiscal responsibility mantra. Gingrich responded with some choice words about austerity itself before defending his lunar ambitions.

“First of all, David, I don’t think you’ll ever find me talking about an age of austerity. I don’t think that’s the right solution,” Gingrich said. “I am a pro-growth Republican. I’m a pro-growth conservative. I think the answer is to grow the economy, not to punish the American people with austerity.”

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Don’t Get Too Excited About Jobs Numbers

I wanted to add a note of caution to John Steele Gordon’s post regarding today’s Bureau of Labor Statistics report on the unemployment rate.

It’s certainly true there’s good news in the report. But if you examine the internal data, there are also grounds for concern.

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What Obama Promised and Didn’t Deliver

Jeffrey Anderson, writing in The Weekly Standard, makes an excellent point:

In President Obama’’s first budget, entitled (with no apparent sense of irony) “A New Era of Responsibility,”” he projected that the federal budget deficit in 2012 would be a rather hefty $581 billion. Fast-forwarding three years, the Congressional Budget Office (CBO) now projects that it will instead be $1.079 trillion, meaning that, if the CBO is right, Obama was wrong by $498,000,000,000. To put that into perspective, that roughly half-trillion dollar margin of error is more than Obama allocated in this year’’s budget for Medicare. Medicare could magically have become free for 2012, and the deficit would still have exceeded Obama’’s earlier estimate.

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Americans Not Particularly Worried About Income Inequality

The Heritage Foundation’s Lachlan Markey draws attention to an interesting stat from a recent Gallup poll that measured the economic concerns of Americans:

Gallup reports that only 2 percent of Americans list the “divide between rich and poor” as the most important economic issue facing the country. Those findings come from an open-ended survey, meaning respondents were not confined to a pre-selected group of responses. Unemployment and the national debt top the list, but all told, a full 17 economic issues rank higher in the American political consciousness than income inequality.

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Dissatisfaction in U.S. Near Record Levels

A new Gallup poll shows that throughout 2011, an average of 17 percent of Americans said they were satisfied with the way things are going in the United States. That is the second-lowest annual average in the more than 30-year history of the question (after the 15 percent from 2008). During the year, satisfaction ranged from lows of 11 percent in August and September to a high of 26 percent in May. And nearly two-thirds of Americans (64 percent) currently mention some economic issue as the most important problem facing the country.

As a point of comparison, satisfaction has averaged as high as 60 percent in 1986, 1998, and 2000.

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CPAC: Past, Present, and Future

One former VP, a former (and current) presidential aspirant, and a future rock star came to the CPAC gathering today. Two of them aren’t running for president in 2012, and you can bet the other is.

Dick Cheney made a surprise appearance and, in essence, passed the baton to the generation of his daughter Liz. (She might be running for something before too long.) As for Marco Rubio:

The star of CPAC continued his rise in the Republican Party on Thursday with a story about his American Dream. Marco Rubio, who has surged to near-even with Gov. Charlie Crist in the Florida GOP Senate primary, used his speech in front of the Conservative Political Action Conference (CPAC) to bash President Barack Obama, Republican defector Sen. Arlen Specter and, by connection, the centrist Crist.

Rubio suggested that Crist would be another senator in the mold of Specter (D-Pa.), who in the face of a tough reelection last year fled the GOP to become a Democrat.

“We already have one Arlen Specter,” Rubio said, adding: “We already have one Democratic Party.”

Ouch. But it’s clear that his invocation of the American dream, his staunch position on the war against Islamic fascists, and his full-throated conservative economic message are a hit with the base, and will likely transfer comfortably to a general-election race.

Cheney and Rubio made clear that they will not be running in 2012. But Mitt Romney surely will. Ben Smith summed it up:

Mitt Romney has gone from being an overeager suitor to being a favored son of the Conservative Political Action Conference since he ended his presidential campaign here in 2008, and his speech today was well-calibrated to an audience basking in a conservative resurgence and eager for attacks on Obama.

Sen. Scott Brown introduced Romney, sharing a bit of his new star power with the former governor, whose aides ran Brown’s campaign, and calling him perfectly qualified “to fix a broken economy.”

Romney’s prepared remarks lace into Obama on an array of issues, all hinged on a single theme: Obama has departed from American values.

Several things were noteworthy in his speech. First, unlike his potential competitor Tim Pawlenty, who’s taken to slamming the GOP and, indirectly, George. W. Bush, Romney wasn’t going there:

When it comes to shifting responsibility for failure, however, no one is a more frequent object of President Obama’s reproach than President Bush. It’s wearing so thin that even the late night shows make fun of it. I am convinced that history will judge President Bush far more kindly — he pulled us from a deepening recession following the attack of 9/11, he overcame teachers unions to test school children and evaluate schools, he took down the Taliban, waged a war against the jihadists and was not afraid to call it what it is — a war, and he kept us safe.

Classy, and, after a year of not-Bush in the Oval Office, I suspect the message will resonate with conservatives.

Second, Romney, who struggled to find footing with social conservatives and to establish his bona fides on abortion and other such issues,  focused almost exclusively on foreign policy and the economy. When he did talk about “strengthening families,” it was education and health care, not abortion and gay rights, that were his focus. If 2012 will be about “letting Romney be Romney,” then you’re going to hear less of the hot-button issues that rang as not quite authentic last time around and, rather, more of this: “Conservatism has had from its inception a vigorously positive, intellectually rigorous agenda.”

Third, he has clearly found his focus, which is a conservative economic message that goes after the Democrats’ statist agenda and touts his own business background. He is laying the case that Obama simply doesn’t understand how the economy works and isn’t prepared, even now, to be president:

As he frequently reminds us, he assumed the presidency at a difficult time. That’s the reason we argued during the campaign that these were not the times for on the job training. Had he or his advisors spent even a few years in the real economy, they would have learned that the number one cause of failure in the private sector is lack of focus, and that the first rule of turning around any troubled enterprise is focus, focus, focus. And so, when he assumed the presidency, his energy should have been focused on fixing the economy and creating jobs, and to succeeding in our fight against radical violent jihad in Iraq and Afghanistan. Instead, he applied his time and political capital to his ill-conceived healthcare takeover and to building his personal popularity in foreign countries. He failed to focus, and so he failed.

And finally, there is a reason Romney is saying nice things about both George W. Bush and Dick Cheney — he’s running against the not-Bush (and Cheney) national-security policy:

We will strengthen our security by building missile defense, restoring our military might, and standing-by and strengthening our intelligence officers. And conservatives believe in providing constitutional rights to our citizens, not to enemy combatants like Khalid Sheikh Mohammed! On our watch, the conversation with a would-be suicide bomber will not begin with the words, “You have the right to remain silent!”

Romney never quite clicked with the conservative base last time. But Republicans are notoriously forgiving types and have a habit of going back to the runner-up. If he’s going to run as Romney the businessman, experienced executive, free-market advocate, and tough-as-nails commander in chief, it will be quite a contrast with Obama. But first he’s got to wow the conservative base and get by some formidable competition. Bringing along Scott Brown to introduce him was one small sign that he understands the need to connect with not just mainstreet Republicans but also with the grassroots tea party movement, which carried Brown into office. No easy task, but then again, we should all get a grip — it is still 2010.