In his recent decision to cancel the new EPA smog rule, President Obama is showing how his thinking is more like that of a corporate officer than that of a President of the United States.

There was a tremendous lobbying effort by business and Republican legislators complaining about the billions of dollars of costs that some corporate entities would endure.  Was there a powerful enough lobby on the other side telling him how many jobs would be created in the pollution control industry?

Without waiting for the lobbying efforts from multiple sides, as a United States President, Obama has to be aware that one company’s costs are another company’s sales.  The jobs created by designing, manufacturing, and installing pollution control equipment might have more than offset the jobs lost in the industries paying the costs.

The companies incurring the costs might even have taken the money to pay for this out of their cash reserves.  In other words the money they had sitting idle and not creating jobs could have been used to pay other companies to create jobs.

Who was making this cost/benefit analysis and presenting it to the President for his consideration?  Unless he knows enough to ask for it, there is no constituency that has the interest in doing the analysis for him.

Unless Obama starts thinking like a President and looking at the economy holistically, he will miss opportunities to get the economy moving again.

Here is  an exercise for the reader.

Since I have made no attempt to enumerate all the economic benefits of the new EPA rule, see how many other benefits for the economy as a whole that you can think of that would offset the costs of the new rules on the economy as a whole.

In Robert Reich’s article Obama’s Jobs Plan: Will He Offer Policy Miniatures Or Give ’Em Hell?, Reich puts together a number of ideas that I have been espousing on this blog for a long time.

Plan A would be big enough to restart the economy (now barely growing) and reduce unemployment (which continues to grow). That means spending another trillion dollars over the next two years – rebuilding the nation’s infrastructure, creating a new WPA and Civilian Conservation Corps, and lending money to cash-starved states and cities.
…
That means the President would have to fight for it. He’d have to barnstorm the country, demanding Republican votes. He’d build his 2012 campaign around it, attacking the Republican “do nothing” Congress. He’d give ‘em hell.

To read Plan B and other ideas that I have been espousing, follow the above link to read the rest of what Reich has to say.

In barnstorming the country, Obama would be doing the necessary work of getting his policies enacted.  That is governing, not campaigning.  If he fails to do the work of governing, then all the campaigning in the world will not get him re-elected.

The audacity of hope and the fierce urgency of now are pretty useless motivations if you lack the vision to do something when given the chance.  How many chances does President Obama need before we are able to decide if he has the vision to lead and to govern?

Imagine if Obama had been doing the barnstorming the country for his ideas over the last three years as I have been urging him to do.  He wouldn’t be faced with having a huge task of turning public opinion around in a very short amount of time on this one particular issue.  The fact that he does not see the necessity of doing this shows that though he may be a Constitutional scholar, he is not a scholar of the politics of governing.   That fact that he may not be smart enough to even have a firm conviction on what to fight for may also be hampering him.

Found the McClatchy story Regulations, Taxes Aren’t Killing Small Business, Owners Say on Nation Of Change.

Politicians and business groups often blame excessive regulation and fear of higher taxes for tepid hiring in the economy. However, little evidence of that emerged when McClatchy canvassed a random sample of small business owners across the nation.

Compare this to the story from my previous post Obama halts controversial EPA regulation.

The decision rests in part on reducing regulatory burdens and uncertainty for businesses at a time of rampant uncertainty about an unsteady economy.

September 5, 2011

Economist Mark Thoma’s view is expressed in his blog post, It’s *Not* Regulatory and Tax Uncertainty

Obama halts controversial EPA regulation is an AP news story. The subheading for the story and the first paragraph appear below:

Obama directs EPA to withdraw controversial proposed regulation on smog standards

President Barack Obama on Friday scrapped his administration’s controversial plans to tighten smog rules, bowing to the demands of congressional Republicans and some business leaders.

Later in the article, we have this amazing statement.

In his statement, the president said that withdrawing the regulation did not reflect a weakening of his commitment to protecting public health and the environment.

“I will continue to stand with the hardworking men and women at the EPA as they strive every day to hold polluters accountable and protect our families from harmful pollution,” he said.

He should have said that he will stand with the citizens of this country hacking their lungs out over the cancer causing pollutants that he is too cowardly to try to stop.

When the President indicates that he has already bought into the Republican propaganda before he even sits down to negotiate, you know our lungs haven’t got a prayer.

I wonder when Obama will tell us that gravity is what keeps the apple connected to the tree branch and prevents it from falling.

In an earlier post, I explained the use of the word tautology.  I figured I needed the antonym here.  One suggestion was oxymoron.

1. (rhetoric) A figure of speech in which two words with opposing meanings are used together intentionally for effect.
2. (loosely) A contradiction in terms.
3. A paradoxical juxtaposition of two seemingly contradictory words.

A more complex reason for bringing up the term, oxymoron, can be seen by comparing another paragraph from the article referenced here:

The decision rests in part on reducing regulatory burdens and uncertainty for businesses at a time of rampant uncertainty about an unsteady economy.

and the quote from my subsequent post Regulations, Taxes Aren’t Killing Small Business, Owners Say.

Politicians and business groups often blame excessive regulation and fear of higher taxes for tepid hiring in the economy. However, little evidence of that emerged when McClatchy canvassed a random sample of small business owners across the nation.

The part about reducing the regulatory burden is just dumbfounding.  I heard a news report of an estimated cost of the regulations as $19 to $90 billion dollars.  The President was reported to have said that this was too big a burden at this time.  Does he think that the money was going to be used directly to plug up smoke stacks and be burned in the process?  That $19 to $90 billion would have been spent buying pollution control technology.  That would have meant job creation for the people producing and installing the technology.  The money might have had to come from industry’s cash reserves that are sitting idle.  This President apparently understands nothing about economics and how to stimulate an economy.  Why did I ever think he had the intelligence to understand this?

I received the enclosed email from Senator John Kerry asking for my inputs on the solutions to the deficit problems in the federal budget.

Below is the first idea that I sent him.

Get Expert Help For Solving The Long-Term Debt Problem

Finding a good solution to the long-term debt problem is a highly technical undertaking. The calculation of how much short term stimulus is needed requires a deep understanding of economics. Understanding how to make structural changes in the economy’s incentive system, is not a political question.

Find the best experts in these matters that you can, and listen to their advice before making any decisions.

You wouldn’t hire a bunch of lawyers and politicians to figure out how to build a skyscraper for thousands of people to occupy. Why do something equivalently silly in trying to solve the debt problem?

It is a sorry state of affairs when our Senator asks for our ideas on how to solve a very technical problem. I was a professional computer software engineer for over 40 years. The senior level management in the companies where I worked were called upon to make decisions on what software our company ought to be making. I would not have expected them to get in a conference room and haggle over the details of how to design that software. That was my job to do. They certainly could ask my advice as to schedule, budget, staffing levels, and best technical approach. This is the kind of advice that I am recommending that Senator Kerry seek in the context of deciding how to solve our debt problems.

Other suggestions I made focused on the data he and the committee need before deciding on solutions.  I told him to first find out how much the economy is losing by permitting 9% unemployment.  Add in the losses from letting this much or more of actual and potential productive facilities of the economy to  remain unused.  Then figure out how much higher the federal revenues would be with the elimination of this loss along with elimination of tax incentives going to the wrong facets of the economy.  When he had these numbers in hand, he would know what was the goal and what resources he had to juggle to reach that goal.  Calculating these numbers is not something that can be done through debates among politicians.  This is just one example of why the committee must have expert advice.  They need to realize that the members of the committee do not have the technical expertise among themselves  to answer these fundamental questions.

As in any enterprise, investments are made over time and the benefits of those investments are reaped over time after the investments have had a chance to produce results.  It is no easy task to estimate when the cash flow from earlier investments will arrive to facilitate future investments.  An enterprise needs to figure out how much to borrow and when in anticipation of revenues from the investments made.  They need to figure out how initial investments and results will affect the ability to borrow and invest in the future.  Do these calculations sound like something that 12 Senators and Representatives can figure out in some Congressional conference room?  Even if these 12 individuals had the competence to make these calculations, they would need help in gathering data.

I wonder who among my readers of this blog think they have the competence to make these calculations let alone the wisdom to figure out what to do if they had these numbers in hand.  I am certainly well aware that I don’t have that competence myself.  I barely have an inkling of what questions to ask.

This episode of On Point with Tom Ashbrook is an interview with James Gleick author of the book The Information: A History, A Theory, A Flood.

A quote from the prologue of the book might give you a hint as to why you might be interested in listening to the interview.

The bit is a fundamental particle of a different sort: not just tiny but abstract—a binary digit, a flip-flop, a yes-or-no. It is insubstantial, yet as scientists finally come to understand information, they wonder whether it may be primary: more fundamental than matter itself. They suggest that the bit is the irreducible kernel and that information forms the very core of existence.

After listening to the interview, you may want to read the book. You may also be interested in my previous blog post about an earlier work by James Gleick, Chaos: Making a New Science.

Thanks to RichardH for telling me about this episode of On Point.

Paul Krugman wrote the post The Great Experiment in Spending.

World War II was the great natural experiment in the effects of large increases in government spending, and as such has always served as an important positive example for those of us who favor an activist approach to a depressed economy.

As he pointed out at the end of the article:

I hear from various sources — and see in comments — that there’s an apparently concerted campaign to take this post and use it to accuse me of wanting a war. And the worst of it is, some people will believe it.

For the people who don’t understand the point of posting this information, you need to be more explicit.  The explicit point is that people are able to see the need for such spending to fight a war.  The  possibly unintended effect of this spending is to get people employed.  Those of us who, like Paul Krugman, point to the example of war as proving the theories of Keynesian Economics wonder why the economic deniers cannot see this clearly enough to put people back to work without having to wage war.

The war example points out that stimulative spending can get people back to work.  Wouldn’t it be more beneficial to society to recognize its power to stimulate the economy without the need for going to war as an excuse?  Imagine if all that productivity could be used for something to help humanity rather than just taking the fruits of that effort and blowing them up, not to mention the death and destruction caused by these explosions.

In mathematical circles the war example is called “an existence proof”.  There are many indirect ways to prove that something exists, but providing just a single example of the object in question is enough to prove that it exists.  People who use logic no longer say that the object has not been proven to exist after they have been shown an existing example of the object.

Counter to this idea is that the lack of an example is not proof that it does not exists.  It only means you may not have found the example yet. To erase all doubt, you only need to find one example.  That is why it is always easier to prove something exists than it is to prove that something does not exist.

When confronted with this evidence that stimulus can fix the unemployment problem, I have people ask whether or not you could really do this without a war.  I just cannot understand what is holding back their imagination after they have been brought so close to seeing the possibility.  The only thing that seems to be holding us back from stimulating the economy without a war is the inability of enough voters to imagine the possible.

Here is an email I just received. You may want to sign up as I have.