Suddenly, it’s the 1930s again.
Barack Obama explained the principles behind his economic stimulus package last Sunday on ABC’s This Week with former Clinton Administration official George Stephanopoulos. Obama said:
“But our general philosophy is….we don’t have pride of authorship. There are a couple of basic principles I laid out. We’ve got to move quickly. We’ve got to make sure that any investments that we make have good long term benefits for the economy, not just short term….We can’t have waste and abuse in it. We can’t have earmarks in it….If people have better ideas on certain provisions, if they say, you know, this is going to work better than that, then we welcome that.”
That’s all. Just good government principles. No ideological blinders here. We are completely open to whatever works. Or as his spokeswoman said last week, “We are guided by what works, not by any ideology or special interests.”
This is political propaganda coldly calculated to distract the public from Obama’s highly ideological agenda that studiously avoids everything that would work, because Obama and his ultraliberal Democrats ideologically object to it, and studiously focuses only on what was tried and failed long ago, because Obama and the retro Ds are all ideologically so nostalgic for that.
We know how to get the economy booming again. The fundamental, practical principles of economics have worked over and over again, wherever they have been tried, throughout human history. Reagan’s economic recovery program was based on these principles, with 4 concrete components reiterated over and over again throughout his campaign, and implemented after he was elected.
Those components were (1) across the board reductions in tax rates to provide incentives for saving, investment, starting and expanding businesses, job creation, entrepreneurship, and work, (2) removing the costs of unnecessary regulation, which today would especially mean removing the onerous restrictions on energy production, allowing drilling offshore and onshore for oil and natural gas, and revival of the nuclear power industry, (3) controlling government spending, which contrary to longstanding liberal propaganda Reagan did do, as explained in my article in the November 2008 American Spectator, “When the Republicans Cut Spending,” and (4) sound anti-inflation monetary policy.
We know such policies work because they turned around in just two years an economy far worse than today’s, suffering from multi-year double-digit inflation, double-digit unemployment, double-digit interest rates, declining incomes, and rising poverty. What we suffer with today is not the worst economy since the Great Depression, but The Worst Economy Since Jimmy Carter, which was the last time Obama’s ultraliberals were dominant, politically and intellectually.
Indeed, these Reagan policies not only ended the disastrous stagflation of the 1970s, but created what economists Art Laffer and Steve Moore have rightly noted was the 25-year economic boom, from 1982 to 2007, the greatest period of wealth creation in the history of the planet. This was recounted in detail in my October 8 column, “Prepare for the Worst.” So, yes, we do know how to create an economic boom. But notice how the Obama/liberal Democrat stimulus package so carefully avoids all of the above components of the successful Reagan economic recovery package. That is for ideological reasons, not practical reasons.
Let’s Try What Never Worked Instead
The much ballyhooed Obama stimulus “tax cuts” avoid entirely any reductions in tax rates at all, because Obama considers such rate reductions ideologically immoral. The centerpiece of the proposal is the $500 per worker tax credit, which is another tax rebate giveaway just like the supposed $164 billion stimulus package that Bush and the Democrats agreed on and adopted at the beginning of last year. We all know now how well that worked. Why are we doing the exact same thing now one year later? Where the heck is the change? As discussed in detail in my column last week, this and the rest of the Obama supposed tax cut package will not stimulate anything, because it does not involve any change in the fundamental incentives that govern the economy, and just borrowing $150 billion from the private economy to cover for the $150 billion revenue loss from Obama’s braindead tax credit will not add anything to the economy on net.
On regulation, Reagan specifically campaigned in 1980 on unleashing the private sector to produce more energy supplies to counter the energy crisis of his day. He did so soon after entering office, and the price of oil and natural gas plunged and remained low for over 25 years. If we did the same today, if we removed needless regulatory barriers to increased oil and gas and nuclear energy production, we would enjoy booming energy industries that contributed mightily to the economy. We would also boost the entire economy, but particularly manufacturing, with low cost, reliable supplies of energy.
But, again, Obama’s stimulus package is not going to do anything like this, because Obama and his ultraliberal Democrats are ideologically opposed to it. Instead, they are talking about doing just the opposite. Their global warming cap and trade regulation would impose limits on the use of current energy supplies, and raise their costs sharply. During the campaign, in fact, Obama told radical environmentalist groups that he would drive the U.S coal industry out of business by making it too expensive for them to operate. Plentiful U.S. coal supplies now produce 50% of America’s electricity. Cap and trade legislation would impose at least a trillion dollars of increased costs every year on the American economy. Suddenly we are talking about trillions all the time, and nobody knows what that means. But the total federal budget for fiscal 2008 was $3 trillion, so a trillion dollars in new costs is the equivalent of increasing that federal budget by one-third. These increased costs are just going to drive manufacturing completely out of the country. And this is just the beginning of the increased regulatory costs Obama and the ultraliberal Democrats envision.
Obama argues that he is going to get the country booming by creating new green alternative energy industries like solar and wind. If there are any regulatory barriers to these alternative energy industries, removing them would be fine. But what Obama is talking about is creating new industries dependent on government spending and corporate welfare for survival. That is not going to promote economic growth, that is just going to be another drain on the economy.
On government spending, while Obama talks about this or that minor spending reduction, overall he is promoting the greatest increase in government spending in world history, again just the opposite of Reagan, again to serve his big government ideology. Obama’s budget in a couple of weeks will propose a spending increase over the fiscal 2008 budget of at least 50%, with a budget deficit at least 50% as large as the entire 2008 budget, close to $1.5 trillion or more, again the largest in world history by far. This is true fiscal insanity. Liberals weeped and wailed for years that Reagan’s $200 billion deficits would be the end of the world.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?