Time Mag Sniffs At Obama's Economic Plan

One of the most annoying habits of journalists who write about public policy is to pooh-pooh ideas that aren't new, even if those ideas have proven to be effective in the past. Time magazine's Justin Fox mails in the latest such dismissal of Barack Obama's proposal to strengthen the economy by extending unemployment insurance benefits, funnelling money to hemorrhaging state governments, and shifting the tax burden upward -- ideas that have all worked well before.

These add up to what you could call the stock Democratic response to tough times. They're not necessarily bad ideas, but they're not what you could call new or transformative either. Obama throws in a few populist panders -- he favors a windfall profits tax on oil companies (which could discourage investment in new energy resources), and says he would oppose raising the Social Security retirement age (which if phased in over a long enough period would be the fairest, most sensible way to ease some of the system's long-run funding challenges). Near the end of the speech, there was a hint of Obama's "yes, we can" vision: a plan to give $4,000 a year in tuition aid to college students who pledge themselves to community or national service after graduation. 

Why do policies have to be "new and transformative?" If they have proven be effective in the past, doesn't that make them "good" as opposed to "not necessarily bad." The conservative movement pushed for all kinds of new and transformative ideas that led to one disaster after another. Enough with that.

As for the windfall profits tax, what evidence would Fox cite beyond oil industry press releases that investment in new energy sources would decline? Amy Myers Jaffe, a fellow in energy studies at the James A. Baker III Institute for Public Policy (no left-wing outpost, that!) just finished a two-year study looking at oil companies and how they spend their money. The study found that for the five big international oil companies - ExxonMobil, Royal Dutch Shell, BP, Chevron and ConocoPhillips  - spending on share buybacks went from under $10 billion a year in 2003 to nearly $60 billion a year in 2006. Spending on developing their existing oil fields, however, went from about $35 to $50 billion, while spending on finding new oil fields went from about $6 billion to $10 billion.

"These companies are spending a very small amount of their operating cash flow on exploration," she said. "They are spending the majority of their funds buying back stock."

Also, does Time's Justin Fox know that the retirement age for Social Security is already scheduled to increase to 67 by 2022? Most wonks are actually much more supportive of Obama's idea of raising the ceiling on Social Security payroll taxes than increasing the retirement age even further.

A little less knee-jerking and a lot more homework isn't too much to ask.