In a CNBC interview JP Morgan CEO Jamie Dimon celebrated the manifold strengths of America that will drive the next economic boom:
“This country not only has the best military on the planet, it has got the best universities, the best businesses, it’s got low corruption, the widest and deepest capital markets, it’s hugely innovative from Steve Jobs to the factory floor, it’s got a wonderful work ethic. We’ve got a royal straight flush. We don’t have a divine right to succeed but we have an unbelievable hand if we play it well. And now we have natural gas, shale oil. America is going to come back, and it’s going to blow people’s socks off when it does.”
In Dimon’s America, excellence and dynamism are widely dispersed; it’s not all about Wall Street or corporate America. Obama’s America, by contrast, is all about Washington. In a New York Times interview after the Galesburg speech, it sounded like Washington could grow “the economy” and a “strong middle class” the way a farmer grows cucumbers and corn:
- “the central problem we face . . . is how do we build a broad-based prosperity”
- “I want to make sure that all of us in Washington are …[focusing]…on how we grow the economy and grow the middle class”
- “I want to make sure everybody in Washington is obsessed with how are we growing the economy, how are we increasing middle-class incomes and middle class wages and increasing middle-class security.”
- “[we need] a conversation that is framed as how are we growing the economy, how are we strengthening the middle class, how are we putting people back to work…..”
- “our priority needs to be growing the economy faster and strengthening oncomes for ordinary Americans”
Frankly, I am not sure how Washington can “grow the economy.” I thought individual businesses and workers did that. Obama plans to “strengthen American manufacturing,” but U.S. firms do not need Federal “manufacturing innovation institutes.” “Rebuilding infrastructure” has merit, but wasn’t the $800 billion “stimulus” package supposed to do that?
Obama dislikes unfettered businesses because they supposedly grow the economy from the “top down” rather than “from the middle out,” whatever that means. In his endless Galesburg speech he named only three U.S. companies: Maytag (which moved a factory from Galesburg to Mexico) and then Costco and the Container Store, which were commended for treating their employees well—as though the rest of corporate America did not. A few other items were notable as we head toward an autumn showdown on the debt ceiling:
- Obama frankly loathes House conservatives, who in his opinion will oppose anything he supports. “Some of those folks think I usurp my authority by having the gall to win the presidency.” Count on Treasury Secretary Jack Lew to take a hard line in negotiations with Congress.
- Obama is trying to convince himself that his pathetic economic record merely continues trends “over the past 20 or 30 years.” Which is obviously untrue; unemployment averaged 5% in G.W. Bush’s second term even though the labor force participation rate was 66% versus 63.5% now. During the 1990s boom labor markets were even tighter and real incomes rose for most demographic groups.
- Channeling Paul Krugman, he takes credit for the rapid decline in the Federal deficit even as he attacks Republicans for the sequester.
Making Jimmy Carter Look Good
Late in his hapless presidency Jimmy Carter addressed structural inflation by starting to deregulate industries, a process Ronald Reagan continued. But Carter was a successful farmer who understood business and the costs of over-regulation. Obama does not. He denies, for example, that Obamacare impedes hiring, and he dismisses the employment potential of the Keystone Pipeline, pegging it at an implausibly low 2000 jobs. It’s a little weird to read a windy, bombastic, tedious, repetitive speech about creating middle class jobs, and then hear Obama flippantly dismiss a real-world opportunity to actual do it. (“Let them eat Federal programs!”)
Unfortunately the costs of overregulation are becoming so obvious that even the liberal Financial Times editorial page has noticed. Echoing arguments I have been making for well over a year, Edward Luce writes that Dodd Frank has improved the competitive position of giant banks (which can afford platoons of lawyers) at the expense of small community banks and the entrepreneurs they lend to. Result: a decline in small business creation. To be fair to Obama, I have yet to hear many mainstream Wall Street economists highlight the growth-suppressing impact of Obamanomics. I guess it wasn’t in the Econ 401 syllabus.
Copyright Thomas Doerflinger 2013. All Rights Reserved.
