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Obama: Find Your Inner Hedgehog

President Obama is not a hedgehog, he is a fox. The metaphor comes, via Isaiah Berlin’s essay on Tolstoy, from a fragment of Greek poetry that read: The fox knows many things, the hedgehog knows one big thing. But, tomorrow night, when he presents his jobs plan to a joint session of Congress, the President will need to find his inner hedgehog if it is there, and fake it if he isn’t.

The question people have been asking is whether or not the President will present a “big” plan, a bold new idea to solve the nation’s unemployment woes. In normal times, the remedy for an economic downturn is to propose large government spending programs that will put people to work, pumping money into the economy at a time when, for a variety of reasons, the private sector is unable or unwilling to do so. But, these are not normal times, these are Tea Party times and because Obama spent the previous several months playing on the Tea Party’s turf, finding ways to cut government spending, he will have a hard time changing direction now. This is why his proposals must be both big and simple. His proposals must have a hedgehog quality.

Unfortunately, the President is more likely to produce a laundry list of the kind Mitt Romney introduced yesterday. Romney was proud of the fact that there were fifty-nine points in his plan. It demonstrated that he is a detail guy, someone who has ideas, someone who knows the world of business because he has been in the world of business. This last point is not exactly true. Romney worked in the world of finance, not business, and his career entailed cutting jobs more than creating them. The problem with laundry lists is not only that they are familiar and, just so, do not suggest new or bold, but that they will feed the Tea Party narrative that Obama’s plan amounts to more government spending. Theirs is a simple narrative and the fact that it is wrong-headed does not make it politically less viable.

Obama needs to change the focus from whether or not the government spends more money to how the government spends money. That is why his proposal needs to be simple. For example, he could say, America today has so many thousands of bridges and roads and schools and rural airports and train lines that need repairs, and we also have record low interest rates. While it is true we have a long-term deficit problem, the best way to address that long-term problem is to get people back to work. These bridges and roads need to be fixed sooner or later, so let’s fix them now, when we can borrow the money and record-low costs, knowing that these infrastructure improvements will help myriad businesses, small and large, for decades to come. Farmers who need to move their crops to market, manufacturers that need to bring parts to their factories and ship out their finished products, towns that can’t afford to repair the roof on their school, cities that need unglamorous but oh, so necessary new sewer lines, all will benefit for a long time from infrastructure spending. Yes, such spending will add to the deficit. But, the long-term deficit has little to do with discretionary spending and a whole lot to do with entitlements. We can have that debate later, but right now, we need to put America back to work and here are the projects to do it.

In the event, the President now has ready at hand a metaphor for the value of government spending that he did not have previously: Hurricane Irene. That storm left widespread damage and federal agencies have gotten praise, even from Republican heroes like Gov. Chris Christie, for their efforts. America’s economy has been through a hurricane too, a hurricane caused by Wall Street greed and poor oversight by the government. The budgets of state and local communities have been as devastated by the economic hurricane as the bridges of Vermont were devastated by Irene, and we need the federal government to step up to the plate.

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I have no objection to the President including some stimulative tax cuts, such as maintaining the one-year reduction in payroll taxes for a second year. But, this does muddy the waters. First, it feeds the idea that tax cuts spur growth: Most don’t. Corporations are sitting on mountains of cash right now and yet they are still not hiring. Giving them an additional tax cut will not make them decide to hire anyone. Giving small businesses one-time tax cuts for hiring people also is a stupid idea. As I have argued before, a restaurant hires another waiter when the customers sitting at Table 43 have been waiting to long for someone to take their order. Only an increase in demand, not a decrease in taxes, will spur job growth in the private sector. It is a mistake to get into a bidding war with Republicans over tax cuts.

Think of how differently the 2009 Stimulus would have been perceived if it had been all about infrastructure. Instead, most of that Stimulus was tax cuts that did squat to help the economy. But, how many more people would still be employed if the Stimulus had consisted of only infrastructure projects over a five year period, instead of what we got. If you look carefully at the monthly jobs reports, you will have noted that every month this year, there was private sector job growth, but much of it was offset by cuts in public sector jobs as the Stimulus winds down.

President Obama, I fear, will not find his inner hedgehog. His plans, worked out with brilliant economists to be sure, will either not be adopted by the GOP or will have only minimal effects on the unemployment rate. But, he needs to change the debate and remove the shackles the Tea Party has placed on government spending. In the wake of Irene, with the wildfires raging in Texas, now is the time to remind Americans that we need government during a crisis, and the anemic employment picture is a crisis for millions of Americans and, consequently, for government budgets. Failing to make long-term investments when interest rates are at historic lows is dumb, especially when we have millions of unemployed workers ready to undertake those long-term infrastructure projects. Roads and sewers and bridges aren’t sexy. They aren’t going to win a Nobel in Economics for anyone. But, they put people to work on jobs that need to be done and that no private sector company is going to do. Unless Obama can focus on one big thing, and focus like a hedgehog, he will not change the debate, and if he doesn’t change the debate, he is looking at an earlier return to Chicago than he had anticipated.

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