SUBSCRIBE NOW WELCOME BACK. Do you want to continue reading where you left off? New Republic subscribers can pick up where they left off no matter which device they were previously using. SUBSCRIBE NOW

Go Home Obama Lied, Paul Ryan Cried, The Economy Died

JONATHAN CHAIT JUNE 7, 2011

Obama Lied, Paul Ryan Cried, The Economy Died

BY JONATHAN CHAIT

The new line on the right is that the economy is now swooning because President Obama criticized Paul Ryan. Here's Michael Barone:

On April 13 Obama delivered a ballyhooed speech at George Washington University. ...

The man depicted as pragmatic and free of ideological cant indulged in cheap political rhetoric, accusing Republicans, including House Budget Committee Chairman Paul Ryan who was in the audience, of pushing old ladies in wheelchairs down the hill and starving autistic children.

The signal was clear. Obama had already ignored his own deficit reduction commission in preparing his annual budget, which was later rejected 97-0 in the Senate. Now he was signaling that the time for governing was over and that he was entering campaign mode 19 months before the November 2012 election. People took notice, especially those people who decide whether to hire or not. Goldman Sachs's Current Activity Indicator stood at 4.2 percent in March. In April -- in the middle of which came Obama's GW speech -- it was 1.6 percent. For May it is 1 percent.

And here, via Nexis, is Bill Kristol on Fox News Sunday:

Two months ago, the economy's prospects looked better and President Obama's political prospects looked better. Then he gave that speech on April 13th. It was at Georgetown, where he demagogically attacked the Paul Ryan budget and basically started employing the "Mediscare" tactics.

I don't think it's an accident that the people have lost confidence in the last two months. I actually think it's hurt him politically.

Remember earlier this year he was going to compromise with Republicans, he was getting serious about the debt, he was pivoting to the center? I think that April 13 speech could be a moment where people look back and say, he went for a short-term political benefit, but hurt his prospects next year and hurt the economy.

David Frum rebuts:

I would myself lay much more emphasis on economic factors like: (i) the continuing destruction of American consumer wealth as housing prices deflate; (ii) the burden of rising oil prices; (iii) the collective decision of American consumers to increase their saving by 6 points of personal income – a laudable decision, but one that subtracts a lot of demand from the economy.

But if I were a believer in the business confidence theory, here’s the counter-question I’d put to Michael Barone:

Which is more likely to subtract from business confidence: a lame speech by the president – or a highly credible and sustained threat by the majority party in the House of Representatives to force a default on the debts, contracts, and other obligations of the United States?

Stan Collender thinks the economic consequences of the debt ceiling hostage fight are already occurring.

SHARE YOUR THOUGHTS

Show all 21 comments

You must be a subscriber to post comments. Subscribe today.

21 comments

As always, I am in awe of the conservative machine's ability to coordinate message ...

- NR409654

June 7, 2011 at 10:48am

You must be a subscriber to post comments. Subscribe today.

I'm beginning to think that a GOP-led default might actually be a political boon for Obama. It would be a chance to demonstrate to all of the GOP's wealthy backers how completely insane the party has become and why they can't be trusted with power. It would give Obama an excuse for demanding a renewal of "emergency" fiscal stimulus, since circumstances would have changed so suddenly and obviously. The GOP would also be going out of their way to "own" the recession/depression. Whadja think, Jon?

- bmoodie

June 7, 2011 at 10:59am

You must be a subscriber to post comments. Subscribe today.

The current "downturn" began in December 2010 (not that long ago) when Obama kow-towwed to the Republican hostage taking of unemployment benefits in order to force extension of the Bush tax-cuts. It accellerated when Obama kow-towwed to the Republican DEMANDS for further spending cuts to prevent the Government Closure in May. Remember the threatened Government Closure in May? So Obama has CEASED any stimulus actions (except for a few supply-side tax-cuts) while reluctantly agreeing to further spending cuts. Is it any surprise the economy is slowing? What IS a surprise is that the Republicans, having successfully gotten Obama to compromise in THEIR direction, are blaming HIM for the slow-down. And that the media is letting them get away with it.

- AllanL5

June 7, 2011 at 11:24am

You must be a subscriber to post comments. Subscribe today.

Meanwhile, the Rebublicans continue to DEMAND further spending cuts as the price of not destroying America's ability to borrow money they've already authorized be spent. Meanwhile, America is ALREADY IN DEFAULT since the Debt-Ceiling was NOT raised. Sure, Geithner is robbing Peter to pay Paul in the short term. But I suspect all the "uncertainty" behind THAT has a MUCH greater effect on the economy and unemployment than some verbiage about a stupid plan that would be disasterous if implemented.

- AllanL5

June 7, 2011 at 11:28am

You must be a subscriber to post comments. Subscribe today.

Pictures of Honest Paul are becoming all too common here at JC's blog. I am getting nauseous seeing them. People who frequently resort to CAPS are nutters. They are saying, look at ME, I have something important to SAY. And also, the APOCALYPSE is just around the Corner, didn't YOU know?

- liberalref

June 7, 2011 at 11:49am

You must be a subscriber to post comments. Subscribe today.

Lib, I'd suggest that behind all those CAPS, Allan frequently makes valid points. Unlike most other blogs, TNR typically tends to have a relatively small group of posters, who, for the most part, have reasonable, if not always completely centrist and unbiased points of view (I know I am not unbiased, though I think I'm reasonable) ... would be good to look past their ideosyncrasies and focus on the message instead.

- NR409654

June 7, 2011 at 11:59am

You must be a subscriber to post comments. Subscribe today.

Is it good or bad that this kind of thing still makes me a little sick to my stomach?

- GSpinks

June 7, 2011 at 12:07pm

You must be a subscriber to post comments. Subscribe today.

Could you imagine a Ryan admin with Palin as House Speaker? Be still my beating black heart.

- IggyPop

June 7, 2011 at 12:14pm

You must be a subscriber to post comments. Subscribe today.

Fair enough. Being told in rhyme that the "economy died" put me a little over the top. I'll try to tone it down in the future, it isn't very professional.

- AllanL5

June 7, 2011 at 12:17pm

You must be a subscriber to post comments. Subscribe today.

The Republicans' egocentrism on economic matters is truly breathtaking. In January or February, I heard one of Texas' esteemed Congressional Republicans (Hensarling, I believe, but cannot be certain) claim that the renewed job growth was actually directly due to the Republican takeover of the House. Their victory, you see, gave confidence to the markets that help was coming, so they started hiring again. Now it reaches new levels of narcissism: by even publicly disagreeing with us, you cause a market panic! It really is pathological with them. I very much hope that Obama very soon realizes that negotiation is useless here. He's haggling with fanatics who want to annihilate the government, but it's the haggling that gives them all the power. As soon as he simply says no, their power evaporates. "You want concessions to not destroy the world economy? You want concessions to allow the government to enact the budget you already passed? You want to eliminate the programs that we established because the market doesn't work, in order to give the markets another shot? No. That's insane, and until you're willing to talk like adults, we're done." Put the Republicans on the defensive, having to argue that any of those positions are sane, and Democrats win. It's that simple-but it'll take a couple of primetime television addresses with him putting it all on the line to make it happen. Also, libref, as has been pointed out by others, when italics, bold and underline are not available options, one can often use caps to denote emphasis.

- janus

June 7, 2011 at 12:24pm

You must be a subscriber to post comments. Subscribe today.

I often use caps when I would prefer to use italics or bold, but, they aren't available. Although, I would agree that a posting in ALL caps is probably not one in which the poster is simply trying to add emphasis but is, actually, a visual indication that he/she is SHOUTING. (Religious forums often feature such exchanges.) As for the subject at hand. The Republicans are masters at using any and all circumstances, no matter how contradictory, to prove their points. And, of course, they often make contradictory claims for their policies depending on the audience -- tax cuts, for instance, will "starve the beast" AND provide more revenue, Ryan's plan will rid us of socialized medicine AND save Medicare, it will also cost less money AND provide more coverage, outlawing collective bargaining will make American workers more competitive with low wage producers worldwide AND raise wages, etc., etc.

- esmense

June 7, 2011 at 12:43pm

You must be a subscriber to post comments. Subscribe today.

Well, they are absolutely right that people have lost what little confidence they had. But I can tell you, based on the mid-level execs that I talk to, it has a lot more to do with the fact that people believe we may not have dodged a depression, and that the current Republican flirtation with extreme budget cuts or outright defaults is just the right trigger to make sure we get there. Personally, I'm just about at the point where everything goes in cash or maybe a bit of gold, waiting for bonds (that will ultimately be payed, BTW), to be real cheap in August, while the economy generally swirls around the U-bend.

- IowaBeauty

June 7, 2011 at 12:53pm

You must be a subscriber to post comments. Subscribe today.

Allan, I, for one, see ZERO problem with OCCASIONAL use of caps. It is a very common rhetorical trick called emphasis. We do it in speech but can not do it when writing except by using caps. As to David Frum, he is one of my favorite Conservatives.

- blackton

June 7, 2011 at 12:57pm

You must be a subscriber to post comments. Subscribe today.

Just btw but italics and bold are indeed available, but you have to type the coding yourself. The big problem that the TNR web people apparently can't solve is that if the truncation point of the previewed text comes in the middle of an italicized or bolded word, then all following posts, without exception, will appear in that formatting.

- ironyroad

June 7, 2011 at 1:00pm

You must be a subscriber to post comments. Subscribe today.

I'm with Frum too. I thought we were picking up speed until someone, not to mention any names, took over the House of Representatives.

- Nusholtz

June 7, 2011 at 1:16pm

You must be a subscriber to post comments. Subscribe today.

This is absurd (the business about CAPS) for heaven's sake. Ditto bolding and italic; this isn't a typographical journal, can we please stick to the discussion at hand? Meanwhile, I agree with Allen5. I was VERY VERY UPSET with President Obama for capitulating to Republican blackmail - either we get our tax cuts for the rich or..... Now, they are back for more, just as in a film noir. And if we are talking about portable wealth, like jewels or gold, OMG.

- Sophia

June 7, 2011 at 2:34pm

You must be a subscriber to post comments. Subscribe today.

I own a business. My customers just don't have the money to spend that they had a few years ago -- or the confidence to freely put purchases on the credit card. That's the state of affairs that affects our decisions. Here are the kind of things that are important for my very small business; 1) I just learned that our state has a new program that will allow us to offer affordable health insurance to our less than full time employees without worrying about monthly fluctuations in their hours (that could disqualify them from coverage). 2) I just finished talkng to a guy who called for some advice about how to cheaply handle a problem that has arisen in his auto restoration project (we design, manufacture and sell after-market performance parts for muscle cars). He's restoring a '69 Charger Hemi -- a project he started when he was fully employed in the construction industry. Now, he says, he's working part-time at Walmart.

- esmense

June 7, 2011 at 2:34pm

You must be a subscriber to post comments. Subscribe today.

Agree with the point that when Certain People, To Remain Nameless, took over the House, the economy started to falter. The scare tactics have created so much uncertainty and dread; that alone would have killed even a robust recovery. This is sickening.

- Sophia

June 7, 2011 at 2:36pm

You must be a subscriber to post comments. Subscribe today.

So I just read that Stan Collender post Jon linked to. Interesting. So, does the increased cost of borrowing that Stan talks about cause inflation? Just wondering, because isn't that in part at least, what this so-called 'debt fight' all about? Cutting federal spending to curb inflation?

- jet

June 7, 2011 at 2:56pm

You must be a subscriber to post comments. Subscribe today.

Aww poor Ryan...What would John Galt, your imaginary hero, (mine is Bilbo Baggins) say about you whining and crying that the President is being a meanie?!

- MikeB.

June 7, 2011 at 5:04pm

You must be a subscriber to post comments. Subscribe today.

We have now plumbed the very depths and scaled the heights of lib ref's contribution to TNR. Very astute comments there, lib. Kudos to you.

- roidubouloi

June 7, 2011 at 10:52pm

You must be a subscriber to post comments. Subscribe today.

SHARE HIGHLIGHT

0 CHARACTERS SELECTED

TWEET THIS

POST TO TUMBLR

SHARE ON FACEBOOK

Close