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August 15, 2011

Obama Hits New Highs on Gallup

Although CAC noted that Obama had hit a new low in support on Sunday -- 39% -- few noticed that he had also accumulated a new high in disapproval. At 54%, that broke the previous disapproval record for a three-day track of 52%.

In today's new poll, Obama's numbers move back slightly -- to 41%/52% again, a mere (ahem) split of 11%.

But Sunday's numbers do represent, I think (or I wish-think), a real watershed for Obama, the moment when a lot of the 6% who bless him one day and curse him the next moved largely to the disapproval column, likely forever (barring some kind of triumph, which seems increasingly unlikely).

I think Obama's new mark is 40/50, and we'll see ooching back and forth around this range.

On the economy, Obama is stuck between the rock and a hard place. The hard place is that with a Republican House, he can't push a policy choice that could possibly add a spur to the economy -- deficit spending to add a Keynesian boost to the economy.

The rock is his intellectually incurious dogma that the government must grow at all costs, and his apparent unwillingness to note that tax cuts are also a Keynesian response to a bad economy.

While conservatives are against Keynesian spending (especially with the debt already forbiddingly high), they could possibly be persuaded to bless some Keynesian tax cutting.

So he continues saying the same crap, which everyone knows is the same crap. To the extent there is a psychological component to this downturn, it can only be remedied by something new, something the public might think could plausibly result in a better outcome; repeating crap about high-tech factories in Michigan and green jobs and a "brighter tomorrow" isn't new.

Here are a couple of policy choices that Obama's rock of hidebound leftism won't permit him to contemplate. I don't imagine either of these would find majority favor among the readers of this site; I'm just noting that he can't even do these, because his rigid ideology of spending over all else won't permit it.

First of all, because the CBO scores debt impact of proposals based on a ten year window, it is perfectly possible to deficit spend in early years (preferably through tax cuts, of course) while implementing structural reforms that will eclipse the amount of deficit spending and actually bring the deficit down over the ten year window.

Suppose Obama were to suggest real entitlement reforms, including, for example, the bulk of the Ryan plan, plus general cuts in spending. Real cuts.

He could make enough room in the ten-year budget window to deficit spend, say, $500 billion in the next year, by offering a payroll tax holiday for employers. Another version of this could be created to only grant the holiday to new hires, and also lower tax rates for investment and on businesses.

Would that work? I don't know. It sure would be a different policy, though. Again, if people don't like the current mix of incentives and risks, the only way to change the trajectory, as far as people's likes go, is to change the mix of incentives and risks.

Greg Mankiw earlier proposed a payroll tax holiday that was deficit neutral, because, in the out years (guessing, let's say five years from now) the gas tax would be increased, so that over ten years the temporary holiday deficit spending (through uncollected taxes) and the increased revenues from higher gas taxes would balance.

That is, of course, a complete non-starter because House Republicans would never agree to that.

But what if Obama could escape his rigid ideology for one moment and think outside the box and offer the Republicans something that would make them consider higher gas taxes?

This is crazy -- Obama would never agree to this -- but what if Obama offered to open up ANWR to oil production? As well as, of course, ending the drilling moratorium in the Gulf and opening more federal lands to drilling.

Now, conservatives could go along with this plan on the theory that the increase to the world oil supply represented by drilling in ANWR and other domestic fields could, in five years, offset the increase in the gas tax; that is to say, that if the natural price of oil dropped by, say, three dollars per barrel, in five years, it could substantially or completely offset the ten cents per gallon hike in gas prices.

Would they? I don't know. But we'd get a few good things: We'd get an immediate stimulus through tax cuts, we'd pay for that over the ten year window through increased gas taxes, and yet a case could be made that with additional oil now available in the market, the gas prices would not actually rise in total price, as a hike in taxes would be accompanied by a corresponding fall in actual price of the raw product.

Plus, less volatility in the energy markets, less stress, less fear.

This is just spitballing. My point is not that either of these is necessarily a good policy option, but they at least seem plausible policy options -- plausible "Grand Bargains" -- that could actually give the economy an immediate lift and result in a lower deficit over ten years.

But Obama can't even consider them. They're not even possibilities, because his Jalvert-like obsession is to pursue higher spending or, if higher spending cannot be had, at least protect the "gains" he and his party have made over the past three or four or even ten years.

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posted by Ace at 01:51 PM

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