A couple of months ago, President Obama presented his vision for long-term debt reduction, presenting a plan to close the budget shortfall by $4 trillion over the next 12 years through a combination of spending cuts and tax increases on the wealthy. The same speech strongly rejected some of the more radical ideas from congressional Republicans and presented a spirited defense of progressive government.
And now, as Jon Chait explains, a new talking point has emerged among the right’s sillier pundits: that speech ended up hurting the economy.
I wish I were kidding. The increasingly pitiful Michael Barone actually made this argument:
The signal was clear. Obama had already ignored his own deficit reduction commission in preparing his annual budget, which was later rejected 97-0 in the Senate. Now he was signaling that the time for governing was over and that he was entering campaign mode 19 months before the November 2012 election. People took notice, especially those people who decide whether to hire or not. Goldman Sachs’s Current Activity Indicator stood at 4.2 percent in March. In April — in the middle of which came Obama’s GW speech — it was 1.6 percent. For May it is 1 percent.
Bill Kristol is parroting the line, too, arguing on Fox News the other day, “I don’t think it’s an accident that the people have lost confidence in the last two months.”
I’m guessing these guys haven’t heard of the logic fallacy known as “post hoc ergo propter hoc.”
This is all terribly foolish. It’d be like an Obama supporter arguing that the Dow Jones stood at 12,263 the day before the president’s debt speech and then climbed to 12,810 over the next two weeks. If the market went up nearly 600 points in just 16 days, obviously investors were inspired by Obama’s remarks!
Except, of course, that’s foolish, too. The economic impact of a presidential speech on government financing over the next 12 years is, to put it mildly, practically nonexistent. Barone and Kristol have grown to hate the president so much, it’s clouding their judgment.
Oddly enough, David Frum is once again the voice of reason: “[I]f I were a believer in the business confidence theory, here’s the counter-question I’d put to Michael Barone: Which is more likely to subtract from business confidence: a lame speech by the president — or a highly credible and sustained threat by the majority party in the House of Representatives to force a default on the debts, contracts, and other obligations of the United States?”
Oh, David, don’t bother Barone with pesky facts. That’s obviously not a cure for Obama Derangement Syndrome.