Muftic: The long and the short of it | SkyHiNews.com

Muftic: The long and the short of it

Felicia Muftic / My View
Grand County, CO Colorado

I listened last Saturday to radio messages delivered by President Barack Obama and Republican Gov. John Kasich of Ohio. I was struck by contrasts in their long and short visions.

President Obama was talking about jobs and what could be done in the short term … reducing payroll taxes and infrastructure investment. Kasich was promoting longer term solutions for future generations and steps to encourage business to invest and eventually to create jobs.

The Republicans talk a big game of creating jobs but they are avoiding proposing ways to improve the job situation here and now, relying on slow-acting solutions. Solving the federal deficit problem is a long term goal of both the White House and the Republicans. However, solutions to the short term unemployment problem call for a different set of approaches and recognition of reality. The reality? It’s demand, stupid.

It is a demand problem that is causing the current lack of private sector investment. More investments will not make their customers more willing to buy their products. Consumers need the means to buy with confidence. Those unemployed and fearing unemployment are far more concerned about their problems today than something taking place in the future.

With business sitting on nearly $2 trillion in cash, and interest rates at historic lows, access to capital is not the issue stifling investment. While tax breaks may help, even then no CEO in his/ her right mind is going to take the leap to expand if there is no one able or willing to buy their products. It could mean idle production facilities and large inventories

Who can we blame for this? I nominate two: A Congress that failed to compromise on a workable, credible plan on reducing the deficit, and the irresponsible attempt by the Tea Party to ignore collateral damage of the fallout from their strategy in the debt ceiling debate. The result: Consumers thinking about making purchases and investors seeking opportunity have lost faith in Congress to produce any plans that will address long and short term problems and have clamped shut their wallets.

Congress, left and right sides of the aisle, deserves condemnation for lack of willingness to compromise, wanting to force the president to take the fall for hard choices instead of making those choices themselves about what will be cut. Passing the painful choices to a super committee was one way out; the other was to criticize the president for his lack of leadership – a case of the pot calling the kettle black.

In the past, Obama has allowed Congress to battle it out, remaining above the fray, and avoiding being blamed for making choices that tread on some valued constituencies. That may have been good strategy for getting a stimulus bill passed in 2009 and for passing health care reform, but it has made him vulnerable to attacks from both the right and the left for not being a strong leader on economic issues. It is resulting in his plummeting poll numbers and endangering his re-election. He has been forced now to take the lead.

Republicans have succeeded in making government stimulus a dirty word and thus have taken a major weapon away from the administration’s ability to provide more public sector jobs. There are other measures he can still take and he will outline them in September. I fear the GOP will find some excuse to stonewall any of the president’s short term job creation proposals because they have Obama where they want him. It is in their political interest to see unemployment remain high so they have 2012 talking points.

Even if prospects of passing Obama’s proposals for immediate job creation through Congress are dim, he can at least make his case and pounce on Republicans for being hypocritical obstructionists. If he also presents a credible, fair plan for reducing the deficit and long term job creation, he may help his prospects for success in 2012 even more.

For more commentary, go to http://www.mufticforum.com