Monday, June 18, 2012

The Restaurant at the End of the Economy

One thing I love is a good simile. It’s a great device for making something clearer or for enabling people to see something in a different way.

In a speech to supporters last week, President Obama used a simile to explain how it was not fair to accuse him of running up deficits: “It’s like somebody goes to a restaurant, orders a big steak dinner, a martini and all that stuff, then just as you’re sitting down they leave and accuse you of running up the tab.”

There are a couple of minor tactical problems here. First, if you’ve been labeled for years by your opponents as a tax-and-spend liberal, you probably want to stay away from metaphors that portray your understanding of government as spending money on extravagant meals. Second, if you accuse your opponents of figuratively dining and dashing, then make darn sure that, for the next several days at least, that in any restaurant you go into the literal bill actually gets paid. Pundits had a field day with the fact that the very next day the president had an early Father’s Day dinner with some ordinary guys and no one on his staff (and certainly not the president himself) took care of the restaurant tab.

Smart-alec pundits have written that the president’s restaurant simile was incomplete because it doesn’t include the much bigger dinner that he ordered up after he sat down at the table. Some wondered if the previous customer had eaten the dinner or left it for the president.

There are, however, more substantial problems with the president’s simile. His point was that the current record-breaking deficits were run up because of the 2008 financial crisis and resulting recession, which were not caused by him. It is absolutely true that Barack Obama did not cause the financial crisis and the recession. But the reason the deficit has become so mind-boggling large is directly the result of a stimulus package that the president put forward and which, he assured the country, would spur a recovery. Recoveries are a good antidote to deficits because they result in a growth in tax revenues.

There was indeed a recovery, but it was so weak that ever since, when people are polled they indicate that they still think the country is in a recession. I’ve gone into the reasons for the weak recovery before, but the bottom line is that the hundreds of billions of dollars spent were wasted in the sense that they did not have the promised result. The president and his supporters argue that things would have been even worse if not for the stimulus package, and maybe that’s true. But that’s an assertion that cannot be proved or disproved. But what cannot be disputed is that, judged by the forecasts made by President Obama’s own economic team, the stimulus was a failure in terms of its stated purpose. The president’s response to this fact? They say they just didn’t realize how bad things really were.

The fact is, though, while it is worthwhile to analyze the causes of the financial crisis to find ways to avoid a future reoccurrence, most people really don’t care who should be blamed for what happened four or more years ago. They want to know who knows what to do to get unemployment down. As a challenger, Mitt Romney has the easier job of making a case. He only has to make promises. The president has a track record and needs to explain how things will be better if he gets a second term. The only concrete plan he offers is raising taxes on the wealthy (something most economists and Bill Clinton think should wait until the economy is stronger) and passing the American Jobs Act, which is essentially another stimulus but on a much smaller scale. Unless he has more ideas he’s not telling us, a second Obama term looks to be more glacial recovery, if not another recession caused by looming global factors.

I’ll tell you what really worries me about the president’s restaurant simile. He uses the restaurant as a metaphor for the economy, but in his metaphor he is not even the manager of the restaurant. Or the owner. He is a customer. And a rather petulant customer at that. He is annoyed to find an unpaid bill on the table where he has been seated. In that situation in a real restaurant, the newly seated customer is not on the hook for the bill left for a previous customer; the restaurant is. The president’s simile does not give any indication that he has any responsibility for the deficit. He’s just some guy yelling at the staff to do something about someone else’s problem.

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