Sept. 19 (Bloomberg) -- How exactly, according to Republicans, is President Barack Obama supposed to have caused the current economic malaise and high unemployment?
You can criticize Obama for running up huge deficits that may wreck the economy in the long run, but in the here and now, even a feckless deficit-spending program can only stimulate the economy and create jobs. However dismal the unemployment rate is now, it would have been worse without the hundreds of billions pumped into the economy by two administrations and the Federal Reserve.
Once again: This does not necessarily mean that the stimulus was wise, or that we need more of it. Only that its short-term effect on jobs has surely been positive -- or, if not, we need an explanation of why not.
The Republicans have a theory. With remarkable unanimity, Republican leaders in Congress and the party’s presidential candidates have parroted a one-word explanation: “uncertainty.” While many political tropes are abused on a bipartisan basis -- the self-exonerating press conference after a sex scandal comes to mind -- the “uncertainty” lament is a largely Republican creation.
House Majority Leader Eric Cantor says that “job-destroying regulations” have left “a cloud of uncertainty hanging over small and large employers alike,” preventing them from hiring new workers. Representative Michele Bachmann says that small businesses are “scared to invest in new jobs because of economic uncertainty.” Sarah Palin, how would you rescue us? “I’d eliminate the uncertainty in the economy.” Mitt Romney: Obama’s policies “have done the one thing employers can’t deal with ... created more uncertainty.” House Speaker John Boehner: “Uncontrolled spending over decades -- by both parties -- has created an environment of economic uncertainty that is destroying jobs.”
There is no doubt that certainty is generally preferable to uncertainty, in the economy as in most aspects of life. A stable currency, for example, makes it easier for businesses to plan ahead, and encourages new investment. But there is no evidence that uncertainty has increased during the Obama presidency, or that, if it has, the president’s policies are responsible for it. Plenty of mystery remains about how health-care reform will turn out, for example, but having a plan -- whether it’s a good one or not -- surely creates less uncertainty than the intolerable situation employers faced beforehand: a broken system and no plan to fix it.
The charge of “creating uncertainty” is a way to blame Obama for the U.S.’s economic trials without having to explain the connection. In fact, if anyone in the political world is responsible for creating uncertainty, it is the Republicans. Look at last month’s debt-ceiling imbroglio, which left the world wondering whether the United States would even honor its debts -- something that was never uncertain before. The decision to turn a routine vote to raise the debt ceiling into a high-stakes game of chicken was made by the Republican House leadership.
Now, you may feel that irresponsible government spending has imperiled the country’s future to the extent that radical confrontation was a reasonable or even a wise policy. (We don’t feel that way, but you might.) Even so, the Republicans’ debt-ceiling gambit hardly reflected any great fear of “uncertainty.” Indeed, the unsurprising result was increased volatility in global markets and a lower investment grade for U.S. bonds -- the result of increased uncertainty about those bonds being paid off.
Uncertainty is not just a byproduct of Republican strategy: It is central. Throughout the debt-ceiling crisis, Republican behavior seemed to have been informed by classic game-theory analysis, which holds that in a game of chicken, it’s advantageous to be crazy -- or at least to be thought to be crazy. Rational political leaders wouldn’t let the government default on its debt just because they didn’t get their way (just as, in a nuclear standoff, no rational country would bring on Armageddon if its demands were not met). But if you can plant a seed of doubt about your own rationality -- Who knows what that nut will do? -- you can make your threat credible. By appearing willing to damage the economy via default, Republicans won.
The Republicans complain about uncertainty, then promise revolution. In the campaign to be the party’s presidential nominee, candidates like Texas Governor Rick Perry and Bachmann claim that Social Security is unconstitutional or that vaccines cause mental retardation. Would they really follow through on some of their wilder positions? If any of the top-tier Republican candidates is elected president -- even Romney, who promises to repeal health-care reform on day one -- we might all look back with longing on the calm, restful environment of the Obama administration.
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