Game Over, Austerity—Obama's Speech Clinches the Case Against Right-Wing Economics

Short on vision, the House Republican plan is short on specifics, too. It proposes “ 3 ways to immediately grow jobs and strengthen the middle class”— approve the Keystone pipeline, pass the SKILLS Act to reform job training, and expand offshore domestic energy production.

Neo-New Deal liberal that I am, I would support these proposals, including more offshore energy production with adequate environmental protection. But the jobs that pipeline construction or offshore drilling create, though helpful, cannot compensate for the artificially high unemployment that Republican-backed austerity policies needlessly have inflicted on the U.S., by means of the sequester and lay-offs of public sector workers during the Great Recession.

The editorial board of USA Today — hardly a bastion of left-liberal orthodoxy — agrees. In a rebuke of conservative economic dogma,  USA Today dismissed the conservative claimthat excessive government regulation is a major cause of the weak recovery, compared to austerity:

But the biggest factor is the most obvious: austerity…. In the public sector,  629,000 government jobs have been axed since December 2009, mostly at the state and local level, putting a further damper on demand. On top of that, the federal government has aggressively cut spending and hiked taxes as the result of budget deals in 2011 and early 2013, and the automatic cuts known as the sequestration….[C]oming as the economy was struggling to regain some momentum, austerity has taken its toll. Economists estimate that the government cuts alone have kept the unemployment rate at 7.6%  when it would otherwise be about 6.5%.

When even USA Today goes all Keynesian instead of  going Galt, the Right is clearly losing the argument about the economy. Conservative Republicans have enough power in Congress to block most of the progressive agenda. But they do not have a plausible alternative to the progressive vision of the past, present and future of the U.S. economy that President Obama has set forth.