- The Washington Times - Tuesday, December 4, 2012


President Obama would have failed Negotiations 101. If there was such a course, the first rule would be “do not insult the people you’re dealing with.”

Hitting the road to campaign for his plan to raise taxes on small-business employers, investors and people in the top two income brackets, he hurled some mean-spirited accusations and insults at House Republican leaders even before they got down to serious negotiations to avoid the dreaded “fiscal cliff.”

House Speaker John A. Boehner and his leadership team were offering the American people nothing more than a “lump of coal” for a “Scrooge Christmas” this year, according to Mr. Obama, likening them to Charles Dickens’ hard-hearted skinflint, Ebenezer Scrooge.

It was, shall we say, an inauspicious opening gambit in a round of negotiations on which the economic well-being of the nation hangs in the balance. It sent a very clear message that the president wasn’t taking this situation seriously.

In a few weeks, our country could be pushed back into another recession if both sides cannot agree on a way to prevent everyone’s taxes from rising sharply on Jan. 1.

Yet there was Mr. Obama, acting as though his political blood sport campaign isn’t over, going on the attack and making a meaningless offer to Mr. Boehner that was nothing more than his original budget proposal, which Congress had rejected out of hand: $60 billion a year in spending reductions, a puny 1.6 percent out of a nearly $4 trillion annual budget.

On top of that, he wanted Congress to give him greater powers than he already has, which the Constitution explicitly gives to Congress: control over raising the debt limit when and how he wishes.

Mr. Boehner responded with great restraint, telling reporters that the president clearly wasn’t taking these negotiations seriously. Mr. Obama, he remarked, had made a “la-la-land offer.”

“We could have responded in kind, but we decided not to do that,” the Ohio congressman said. It was a class act versus a Chicago-style, former community organizer who thinks he is still in the 2012 campaign and that this is no time for leadership.

The cruel irony is that it’s Mr. Obama’s policies that will be giving the Americans a “lump of coal” this Christmas, in the form of increased unemployment, a slowing economy and the threat of higher, punitive tax rates that have already begun rippling throughout a business community paralyzed by uncertainty.

It should also be added that businessmen are sitting on nearly $2 trillion in cash because they fear the future under the next four years of a persistently weak Obama economy that is not going to get any better anytime soon.

His administration has been putting out reports aimed at showing the economy is improving. The compliant nightly network news duly trumpets the government’s line, failing to dig into the numbers or, in some cases, ignoring reports that indicate the economy is slowing down.

Take, for example, last week’s revised third-quarter report that the economy grew at a 2.7 percent annual rate. The revision was higher than an earlier 2 percent estimate.

The devil is in the details, however. A major reason gross domestic product rose was that business inventories were higher than was estimated earlier. In other words, they weren’t moving, and that could mean weaker growth to come as businesses delay any new purchases until their inventories fall.

Another big factor in the revised growth rate was higher government spending, shooting up at a 9.5 percent rate in the middle of the presidential campaign — loaded with gifts for Mr. Obama’s special interests.

That’s not going to continue, particularly with the fiscal cliff up ahead. If Mr. Obama ultimately gets his way, though, spending will continue to soar, which will bury our country in additional debt.

The jump in the economic growth rate certainly wasn’t due to increased business spending for equipment. That declined sharply in the third quarter, dropping at a 2.7 percent annual rate.

This means that despite the ballyhooed report on “CBS Evening News,” the economy is due for much slower growth ahead. “Macroeconomic Advisers expects GDP growth will be only 1.4 percent in the final three months of the year,” reports The Washington Post’s economics analyst Neil Irwin.

Monday night, CBS News anchor Scott Pelley ticked off some positive housing data to make the Obama economy look good, but he ignored that day’s worst economic news: New orders at U.S. factories fell nearly 4 percent, “which bodes ill for the future,” Mr. Irwin said Tuesday.

At the same time, the Federal Reserve says factory output fell 0.9 percent between September and October, and the number of factory jobs dropped to the lowest level since September 2009.

Remember those campaign ads Mr. Obama ran earlier this year saying “factories are humming again”? In his dreams.

For average Americans, the economy will remain weak for the foreseeable future, full-time jobs will be in short supply and that, in turn, will mean weak federal tax revenues, persistent budget deficits and higher debt. Mr. Obama’s spending binge is on course for another $1.1 trillion deficit in 2013.

Despite the $1 trillion in government stimulus spending Mr. Obama has dished out over the past four years, the U.S. economy’s growth rate hasn’t been able to creep much above 2 percent. In real economic output, that’s “only 2 percent above what it was in the fourth quarter of 2007,” Mr. Irwin says.

The November unemployment numbers come out Friday, just 18 days before Christmas. Forecasters say the 7.9 percent jobless rate will rise again, this time, above 8 percent.

Mr. Obama’s campaign promises that “the economy is moving in the right direction” and is “making progress” are not in evidence. Economic growth isn’t improving — it is slowing down. Unemployment and underemployment isn’t on a downward slope — it is creeping upward.

This will be another bleak Christmas for millions of Americans trapped in a chronically weak, undernourished economy. Mr. Obama obviously doesn’t have a clue about how to turn it around.

Donald Lambro is a syndicated columnist and former chief political correspondent for The Washington Times.

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