Jim McTague‘s latest “D.C. Current” column in Barron’s focuses on President Obama’s latest push for federal spending increases. McTague focuses on the 69th annual Economic Report of the President.
Since Truman’s day, the report has evolved into a highly partisan document that is 50% political propaganda, 50% self-serving data, and zero percent honest introspection, although Truman warned, “Prosperity cannot be the concern of one party or of one group. It cannot be attained without the goodwill and the cooperation of all.”
I FIND THE REPORTS TO BE WONDERFULLY REVEALING. All Doris Kearns Goodwin wanabes should use them as a starting point for studying postwar presidential administrations. The documents are available at the Government Publishing Office’s Website (gpo.gov). You would learn, for example that President Jimmy Carter, who served during a period of high inflation, steep productivity drops, and energy dislocations, went out of office offering a formula for ending runaway inflation, one that foolishly avoided the stimulus of tax cuts to spur economic growth. John F. Kennedy’s big investment in a space program was as much a Keynesian response to a recession as it was a race to beat the Soviet Union to the moon. Ronald Reagan, who succeeded the clueless Carter, opened his first economic report with a paean to the U.S.’s deeply ingrained spirit of self-reliance. “In the year just ended, the first decisive steps were taken toward a fundamental reorientation of the role of the federal government in our economy—a reorientation that will mean more jobs, more opportunity, and more freedom for all Americans. This long overdue redirection is designed to foster the energy, creativity, and ambition of the American people, so that they can create better lives for themselves, their families, and the communities in which they live,” he wrote.
For Obama, the crisis of the hour is low income growth for what he calls the “bottom 90%.” Since 1973, the share of household income for this cohort has slid from 68% of the U.S. total to 53%. Obama’s solution is to spend rather than cut—to take more in taxes from the upper 10% and businesses and redistribute it to the 90% through benefits, such as guaranteed sick and maternity leave for working parents, tax credits for child care, and free junior college. Universal austerity is a nonstarter for him. Only the rich should be made to squeal.
Obama may profit by reading this shred of wisdom: “Our strategy has been based, first and foremost, on a commitment to fiscal discipline. By first cutting and then eliminating the deficit, we have helped to create a virtuous cycle of lower interest rates, greater investment, more jobs, higher productivity, and higher wages. In the process we have gone from the largest deficits in history to the largest surpluses in history.” Reagan? Not even close. Try President Bill Clinton’s final report.
