7/06/2011

Romney's back-and-forth on whether Obama has made the economy worse


The Washington Post, The Huffington Post, and the LA Times have all given Romney a hard time over is unwillingness to stick to his criticism that Obama made the economy worse. Romney is really making a hash of this for all the Republicans by first saying that Obama made things worse, backing away from that by saying things just haven't improved, then saying Obama made things worse, then backing away, and saying again that Obama has made things worse. He is discrediting the entire argument. He is also only mentioning the regulatory part of the argument, and even then he isn't completely explaining even that point.

In short form, the arguments are several fold:

1) Moving around a trillion dollars in the economy from where you and I and various companies would have spent it to where the Obama has wanted to spend it, has moved not only the money but the jobs that would be associated with that money. People don't instantly move from one set of jobs to another. All this massive churning of jobs has created a lot of chaos. One would also add in here about how the threats of Obama's regulatory policies and taxes have made it so what jobs have been created are overwhelmingly "temporary service sector jobs."

2) The massive new regulations have also created chaos and produced winners and losers. For example, Goldman Sachs liked the financial market regulations because it prevented banks from competing with them in certain operations. This type of change moves jobs around in the economy and also creates unemployment.

3) You could use this opportunity to explain why Obama's policies have depressed housing prices. Having the Obama administration put pressure on mortgage holders to write off parts of their loans makes them very reticent to make new loans. Why would any one want to make a new loan if six months or a year down the road you might have to write off a huge portion of the loan? Without new loans, there will be fewer people who want to buy new homes and that in turn will reduce home prices.

4) This one might be too politically sensitive to discuss, but there is also the issue of the incredibly long unemployment insurance of 95 to 99 weeks. On top of the unemployment insurance has been the government aid for mortgage payments and health insurance. One only gets these payments as long as one in unemployed, making it costly for some of the unemployed to return to work.

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