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The Real Reason for the GOP’s “Just Say No to Obama” Policy

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PAYGO: "Pay As You Go". On its surface, this sounds fairly sensible. In fact, it sounds very fiscally conservative. So why is it that the Democrats are all for it, and Republicans are all against it? Check out the strictly party-line Senate vote: on Thursday, all Democrats voted for the measure, and all 40 Republicans voted against it. The House adopted such a rule in a 265-166 vote last July.

This strictly party-line vote is particularly interesting since when PAYGO was first introduced in the Omnibus Reconciliation Act of 1990 when 47 Republican representatives voted for it, and 18 Republican senators, including Bob Dole, voted for it.

In fact, here's a list of five Senate votes from 2003 to early 2006 (when the Republicans held both houses of Congress), and every single vote includes several Republicans who voted for PAYGO, and some of those same Republican senators are among those who voted 'No' on Thursday.

Now why is that? Why is it that Republicans would not support fiscally-conservative PAYGO legislation in the first place? Why is it that Republican senators who were for PAYGO are against it now?

Mainly, it's because the Republican Party is enforcing a "Just Say No" policy because they just don't want President Obama to succeed in anything he does, period. Now that sounds petty, an unbecoming accusation of an entire political party, but I suspect that in their eyes, there's a very, very good reason. But I'll get to that later.

Now, back to the president's efforts to rescue the American economy. It seems that everyone on the right, most independents, and many on the left are starting to think that the unemployment situation's not getting any better, that if we have a recovery at all, it will be a 'jobless recovery' such as the one that doomed Bush 41's reelection hopes back in '92.

Is that really the case? Not according to this article in Bloomberg.com:

Business executives say spending will increase further as profits rise — third-quarter earnings increased 10.8 percent, according to Commerce Department figures, the most in more than five years — and demand strengthens. Of U.S. companies followed by Morgan Stanley analysts in New York, 38 percent intend to raise capital spending over the next three months, up from a low of 3 percent in August.

“The groundwork has been laid for a very powerful recovery in capital spending,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York. “It won’t take much of a spark to get companies to start spending and hiring.
”GDP rose 5.7 percent in the fourth quarter as factories revived assembly lines and consumers and companies spent more, the Commerce Department reported on Jan. 29. Purchases of equipment and software increased 13.3 percent, the most since the first quarter of 2006.

Morgan Stanley’s January business conditions index survey found that 34 percent of companies plan to increase hiring, up from 8 percent in August. “Rising jobs will provide the gains in income and confidence needed to support consumer spending,” Richard Berner, co-head of global economics at Morgan Stanley in New York, said in a telephone interview.

Frankly, this doesn't look like 'doom and gloom' to me. What it does look like is a serious problem for the Republicans this fall if the American economy has recovered to any semblance of its pre-Bush robust performance by then. "It's the economy, stupid!" Those words were true in '92, and they're true today.

The Republicans still have some advantages, however — foremost of which are the short memories of Americans, and our national preference for instant gratification. If the American voting public forgets what (and who) got us into the Great Recession, and if they blame Obama for the recession lasting so long (compared to its severity, it's really been rather short), then they will likely make significant gains in the congressional elections – particularly in the House, where it is quite conceivable that they could take the majority.

On the other hand, if the Democrats are successful in reminding the American public of whose polices got us into the recession, and whose policies helped us recover more quickly than most expected, then we will lose fewer seats than the majority party normally does in mid-term elections…and we might even gain a few.

What will be the determinant? Jobs, of course. It's now looking as if we may have had positive job growth in January…and if the economy keeps growing as it seems to now, we'll certainly have positive job growth in February – not even a year after the Dow bottomed out in the mid-6000's! And what happens when an economy grows? Jobs.

That's why the Obama Administration did what they did — because they knew that they had to take care of Big Business first — because if Big Business failed, that many more people would have been thrown out of work…and we would have fallen into a vicious circle down into Depression. How do we know this? From the Columbia Encyclopedia:

Economists have disagreed over its causes, but certain causative factors are generally accepted. The prosperity of the 1920s was unevenly distributed among the various parts of the American economy—farmers and unskilled workers were notably excluded—with the result that the nation's productive capacity was greater than its capacity to consume. In addition, the tariff and war-debt policies of the Republican administrations of the 1920s had cut down the foreign market for American goods. Finally, easy-money policies led to an inordinate expansion of credit and installment buying and fantastic speculation in the stock market.

Our productive capacity is now much less in relation to our consumptive capacity, and our tariffs are few and far between, but uneven prosperity, war debt, easy-money policies leading to expansion of credit and installment buying and fantastic speculation, sound familiar?

They sure do! They're what the Republicans gave us during Bush 43's presidency!

But that's not all – there's something else in the same reference:

The economic, agricultural, and relief policies of the New Deal administration under President Franklin Delano Roosevelt did a great deal to mitigate the effects of the depression and, most importantly, to restore a sense of confidence to the American people. Yet it is generally agreed that complete business recovery was not achieved and unemployment ended until the government began to spend heavily for defense in the early 1940s.

I remember a popular saying during the recessions of the early 80's and early 90's: "What we need is a good war!" Why? Because it was WWII that finally brought us out of the Great Depression because we suddenly became nearly fully employed as a nation, thanks to the military buildup.

In other words, government spending, a vast "stimulus," in today's parlance, got America back to work.

This is the lesson that the Obama Administration took to heart. In fact, in his book Essays on the Great Depression Ben Bernanke calls the Great Depression the "'Holy Grail of macroeconomics." He writes that "the experience of the 1930s continues to influence macroeconomists' beliefs, policy recommendations, and research agendas." This is why, instead of waiting several years to inject the stimulus as FDR did, President Obama did it right away as Ben Bernanke advised, and the bullish projections in Bloomberg.com are a direct result of Obama's stimulus.

That brings us back to the GOP's "Just Say No to Obama" policy. As I said, in their eyes there's a very, very good reason that they want Obama to fail in his efforts. It all goes back to an offhand statement by my neo-con friend: "It's all about power." If President Obama succeeds in boosting the nation's employment rate by September, the Republicans will have a very, very hard time of it in the general elections. The Republicans know it, and so does Obama.

You see, Obama's true motives don't really matter to the Republicans. I suspect very few of them actually think that he's really out to destroy America.  Indeed, I suspect that most Republicans (or at least the moderates) believe that Obama is patriotic, that he really does want to do what is best for America.

But, regardless of the fact that President Obama has reached out for bipartisan legislation time and time and time again, regardless of the fact that he's publicly supporting some strictly conservative ideals such as nuclear power, offshore drilling, tort reform, cutting waste in Medicare, etc., regardless of the fact that he has cut taxes on the vast majority of American taxpayers, in the eyes of the GOP Obama must fail, because if he is successful, we're looking at the very real possibility of a long-term Democratic lock on power in Washington. It's happened before, you know, after the last time a Democratic president led us out of terrible economic times caused by Republican policies.

That is why the Republicans are enforcing a "Just Say No" policy for all their congresspersons and senators to anything President Obama wants to make happen, even when it's something that Republicans have supported before.

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About Glenn Contrarian

White. Male. Raised in the deepest of the Deep South. Retired Navy. Strong Christian. Proud Liberal. Thus, Contrarian!
  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Glenn,

    You’re starting your article with the PAYGO example, but I’m afraid I’m rather unclear what exactly does it mean.

    Can you explain the idea?

  • http://drdreadful.blogspot.com Dr Dreadful

    Nice piece, Glenn, well-argued and taking a very different slant than most economics articles we see here.

    However, I don’t think invoking Ben Bernanke is going to win you over many of the minds you may be trying to persuade. :-)

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Sorry, Dreadful, but I disagree. It should have been broken down into two parts at least and more focused. And in spite of some valid points, which should be developed, it still comes across as an exercise in apology and an article of faith – an evaluation based more on what Glenn would rather believe than actual performance and established facts.

    Just to bring one example, I really have a difficult time what to make of the following:

    “That’s why the Obama Administration did what they did — because they knew that they had to take care of Big Business first — because if Big Business failed, that many more people would have been thrown out of work.”

    It’s far too nebulous a claim to take it at face value. What exactly is meant? If the financial institutions, for example, like AIG, BofA or Morgan & Stanley, then one can respectfully disagree. General Motors – can you think of other examples? – perhaps, in a limited and restricted sense. Simply put, it’s asking too much to accept such a simplistic proposition, as stated.

    Lastly, I wouldn’t put too much confidence in the rather rosy portrayal of the nation’s economy rebounding, not when it issues from Wall Street operatives and mouthpieces. A great deal of skepticism would be a more resolute stance.

  • FitzBoodle

    Good article. The economics and politics are quite accurate.

    The republicans liked PAYGO 20 years ago when the country was relatively peaceful and government spending was largely domestic; we even had a ‘peace dividend’ from reducing war expenditures.

    But PAYGO was a big inconvenience when Bush 2 took affice because it hobbled their ability to hand out trillion dollar gifts to their rich friends and nobody could figure out how to start trillion dollar wars if you had to justify the expense. So, fiscal responsibility was thrown away because it hindered the larger goal of accumulating more power at The Top.

  • Glenn Contrarian

    Roger –

    You are echoing the exact same observation that Dave made when he sent the article back for me to fix – that I did not properly explain PAYGO. To make it short, PAYGO essentially means no submission of legislation without a concurrent proposal on how to pay for said legislation.

    My apologies for not making it clearer.

  • Glenn Contrarian

    Dave –

    Thanks for editing and publishing my article. I was intending to fix the article as you suggested, but I wouldn’t have gotten a chance to before this weekend. However, I neither reassigned the article as a draft nor informed you of my intention, so the fault is completely mine.

    Someone once said that when a man points a finger at someone else, he’s pointing three fingers back at himself. In this case I must have been shaking a fist in your direction because my fingers were all pointed back at me.

  • http://www.republicofdave.com Dave Nalle

    I didn’t edit or publish it, Glenn. You put it back into pending without the changes I suggested and Clavos edited and published it.

    Except for the PAYGO business that confused Roger the rest of the suggestions were not that big a deal. I do think a lot of people are confused by PAYGO as it’s not exactly what the name implies.

    I’ve added a link to an explanation of it, unfortunately the explanation is rather more detailed than one might like.

    Dave

  • http://www.republicofdave.com Dave Nalle

    What that explanation doesn’t make clear is the GOP rationale for opposing PAYGO which is the belief that it will be used as a pretext for an ongoing series of small tax increases without opening the door to cost reductions and termination of costly programs as an alternative.

    Dave

  • Glenn Contrarian

    Dave –

    The reality of the Bush administration shows that without PAYGO, there is no financial responsibility. With PAYGO, at least the lawmakers supporting the legislation must be able to prove that the legislation’s benefit outweighs the cost.

    And the point of the article was the real reason that quite a few Republican congressmen in the past have supported this and other policies that Obama’s put forward is NOT that they really think these policies are bad ideas, but because they know that if Obama has a successful presidency, it will do serious long-term damage to the Republican party.

    One could honestly say that those Republicans who supported these policies in the past but are now joining in lockstep with the rest of the party against Obama and those SAME policies…are putting party above country.

  • cannonshop

    So…the thrust of your article, taking into account the behaviour of the congress since the 2006 elections, is that the Republicans have adopted the strategy of the Democratic Party, including the personality-cult politics?

    Seems about right, since Barack Obama’s adopted a supercharged version of Bush’s worst economic policies, and Bush 1’s worst economic policies (and mistakes-such as the S&L Bailouts that cost him a second term.)

    When you examine the aggregate policies of the Bush1, Clinton, and Bush 2 policies, the collapse of 2007/08 is predicted under Hayek, not Keynes. A temporary boom, but there’s nothing backing it, and it WILL bust.

  • http://www.republicofdave.com Dave Nalle

    Glenn, I think PAYGO is a reasonable idea, but I also think the basic objections to it have some validity.

    As for Obama having a successful presidency, that boat has pretty much sailed and it has nothing to do with the GOP or anything they’ve been doing.

    And when it comes to being the party of “no” the value of “no” has been seriously underrated. It’s a very positive concept when the alternative is saying “yes” to a whole agenda of terrible ideas.

    Dave

  • http://www.indyboomer46.blogspot.com Baritone

    “As for Obama having a successful presidency, that boat has pretty much sailed and it has nothing to do with the GOP or anything they’ve been doing.”

    Unbelievable. What dreck!

  • Arch Conservative

    “Party of No”?

    That’s about as idiotic as voting for and supporting someone who’s been going around saying “yes we can.”

    If one defines “sucessful presidency” as selling this nation down the river to further one’s own degenerate globalist agenda than both Bush and Obama have had wildly successful presidencies.

    You can throw pretty much everybody in Congress int hat boat to.

    Now back to pontificating on illusions.

  • http://www.indyboomer46.blogspot.com Baritone

    “If one defines “sucessful presidency” as selling this nation down the river to further one’s own degenerate globalist agenda than both Bush and Obama have had wildly successful presidencies.”

    Again – What dreck.

    What the hell constitutes a “degenerate globalist agenda?”

    AC retains the notion that Americans are the “be all and end all,” and that the rest of the world can kiss our fat butts. At the same time, of course, they are all supposed to roll over and allow us to steal all of their nature resources and otherwise serve the great Yankee masters like lap dogs.

    The ONLY way Obama could have possibly gained ANY cooperation from congressional Reps is if he had, immediately after his inauguration, renounced his Democratic party affiliation, thrown out all of his supposed leftist/globalist ideology, and embraced all right wing, conservative positions, declared open warfare on all “axis of evil” nations, and publically kissed Dick Cheney’s ass in the Capitol Rotunda reported exclusively by FOX News. Even then, the likes of Limbaugh and Beck would have found fault with, perhaps, the manner in which he went to his knees.

    It absolutely doesn’t matter what Obama does during the coming months. The Reps will manage to find a way to oppose anything and everything coming out of the White House. Not because it might be better for the country, but rather, because it will, in their opinion, serve their political aspirations. If there is one thing Republicans are good at, it’s down and dirty, lying, shit in the gutter politics.

    I hope I get assigned to some of their death panels.

    B

  • Arch Conservative

    AC retains the notion that Americans are the “be all and end all,” and that the rest of the world can kiss our fat butts.

    No I just don’t find the idea that an American president should put America first all that novel as you do.

  • http://www.indyboomer46.blogspot.com Baritone

    He has NEVER NOT put America first.

  • http://jeanniedanna.wordpress.com/ jeannie danna

    Baritone,

    I’m so glad you are back!

    Hopefully my new article will be published here and I really hope you read it!

    :] Thumbs up!

  • http://www.indyboomer46.blogspot.com Baritone

    It is likely that I will.

    B

  • http://jeanniedanna.wordpress.com/ jeannie danna

    Glenn,

    I just found your article earlier after seeing B’s comment here. I want to read this article completely before posting a comment about it, and, I’m sure it will be a good one..:)

  • Zedd

    What Baritone said!