Going to the polls knowing you are choosing the lesser of two evils is a horrifying example of cognitive dissonance exceeded only by agreeing with a sermon on abstinence a few hours before knocking boots with your favorite lover. In the end you are left with the annoying need to reconcile the two.
Call it the post Danny Glover syndrome. Mr. Glover, who famously took issue with Mr. Obama taking a foreign policy path similar to his predecessor, George W. Bush, may have been one of the fortunate few at the time who was able to exorcise himself of the cognitive dissonance demon before the rest of us. Most Black Americans will decide not to play defrocked Catholic priest desperately trying to chase out the demon within our political souls; a demon that has us pitting our adoration for the first Black president against the realization that there really isn’t much difference between Mr. Obama and the men who preceded him in office.
Mr. Obama, unfortunately, can still count on approximately 90% of Black American voters to show up this November and give him four more years to pull off his best Sam Cooke impersonation and provide the hope and change he hinted at four years ago. Most Black Americans will choose this route, hoping that during their trek to the voting booth that they are able to eliminate one of the conflicting beliefs, the belief that Mr. Obama hasn’t delivered on any tangible change, with the belief that his election actually meant making up for the eight lost years under Mr. Bush.
For me, there is nothing to reconcile. A change in how we approach solving our financial market and economic problems never materialized. Mr. Obama’s supporters may argue that the Dodd-Frank Act provided that change. The Act, they will argue, increases capital requirements for the banks, prohibits banks from conducting proprietary trading with investor money, and created another agency, the Consumer Financial Protection Bureau, to ensure greater transparency on the part of financial institutions when conducting business with consumers. But was that change or a mere reshuffling of a few shells while finding a new shell on the beach?
Problems in the American economy started long before the credit freeze that developed in 2007 and blew up in 2008. Mr. Obama’s economic report to Congress acknowledged this much:
“Long before the recession that began in December 2007, job growth was insufficient for our growing population. Manufacturing jobs were leaving our shores. Technology made businesses more efficient, but also made some jobs obsolete.” – Economic Report of the President, February 2012.
But what we need to address are the systemic issues of government. Instead, the Obama Administration chose to address the specific behavior of a few actors. Investors, who behaved poorly by failing to be informed about bonds held by AIG and Bear Stearns. Consumers, who behaved badly by entering mortgage and unsecured debt agreements without understanding the terms. Banks, who behaved badly by selling riskier loans because underwriters and other large investors were caught up in the euphoria of higher returns from synthetic mortgage-backed securities. Yes, all bad behavior, but didn’t we have enough laws on the books to address any alleged misdeeds? Have these market intrusive policies had any effect on the economy?
It’s no wonder opponents of the Obama Administration have been so bold to assert that President Obama has no plans for the economy. In fairness, the President did lay out his spending priorities in his proposed fiscal year 2013 budget, which the Republican-controlled House of Representatives rejected. In February 2012 he also provided recommendations for addressing on a going forward basis the ailments in the economy.
Among the Administration’s policy tools for improving the economy is “smart regulation”, the idea that equating the cost of regulation with the benefits that a regulation may create is efficient. The President asserts in his February 2012 economic report that the $155 billion in annualized net benefits resulting from smart regulation is made up of cost savings to government as well as the monetary value of prevented deaths, illnesses, and injuries. The President could not assert, however, that smart regulation has a direct impact on productivity and growth in output.
While the President asserts that there is an indirect impact on productivity resulting from fewer people staying home due to illness or injury, he has not provided evidence of a direct impact on gross domestic product resulting from regulation.
Growth in output and the aggregate demand that comes with it incents businesses to hire. Claiming that a policy lends itself to economic growth yet failing to show the impact of that policy on output does not create the confidence necessary for me to conclude that the Administration’s economic policies are putting the country on the right path.