If anybody but Barack Obama were President of the United States, I would say that the S&P downgrade this week, and the huge market drops in the past two weeks, were both over-reactions to admittedly bad economic data. After all, lawmakers did show a willingness to address the debt problem, did show some bipartisan seriousness about finding savings, and do still represent the most stable nation, with the most wealth, in the world.
But this is a willfully obstinate president, ideologically committed to intrusive regulations, higher taxes, and bigger government no matter how much evidence shows that his policies don't work. When he continues with the same stale talking points, the same arrogant disdain for all who disagree with him, and the same dyspeptic disposition, markets have no reason for confidence – and neither do consumers, ratings agencies, or foreign bondholders. They know that this man is cold, hyper-egotistical (if not worse), and supremely immune to even the slightest bit of self-doubt. They know this is a man who has no experience in the real world of the private sector, boundless hostility to the profit motive, and no understanding of what makes economies grow. They therefore have no reason to expect the sorts of openness to change that they want to see from the Obama administration.
Obama has never really succeeded at anything in his life other than political self-advancement. By his own admission he didn't achieve much of lasting value as a community organizer. As an Illinois legislator he sucked up to leadership and got his name listed as sponsor of lots of bills, but he wasn't known for actually crafting the legislation or for major achievements, and he infamously voted "present" as often as a baseball player spits in the dugout. In Washington, he spent so little time in the U.S. Senate that he might as well have been a ghost.
So why would anybody believe he has the knowledge or skill to lead a nation out of a debt crisis when all of his inclinations run to fiscal extravagance and probably incontinence?
The reality is that this is Obama's economic collapse, caused by Obama's policies and Obama's attitudes. And as long as Obama remains in office, people have every reason to doubt that any significant improvements will be made.
The Environmental Protection Agency, the National Labor Relations Board, the Consumer Products Safety Commission, the Energy Department, the Interior Department, the Department of Health and Human Services, the Consumer Financial Protection Bureau, and other federal entities are spinning a tangle of job-killing regulations faster than businesses can possibly keep up. Debt has increased by about 50 percent in less than three years. Corporate tax rates remain among the two highest in the developed world. And this president still insists we must raise taxes on job-creating entrepreneurs and small businesses, right in the midst of a recession.
This is not a man who is serious about either limiting government or spurring private-sector economic growth. This is only a man who wants the world to abide by his edicts, as he tries to remake the entire world in a hard-left image.
But if Obama weren't in charge, there would be reasons to believe the economy, and the debt, could be turned around. Nearly $2 trillion sits on the sidelines, at least half of which could easily be invested. Interest rates are ridiculously low. Business profits are solid. The recent stock sell-off has created lots of bargain-basement buying opportunities. The incredibly long recession/stagnation has weeded out significant fat in the private sector, which leaves it lean and ready to expand.
The House of Representatives, led by a brilliant Budget Committee Chairman in Paul Ryan, features lawmakers with a real determination to reform government and remove its excesses. And there is widespread agreement, within a broad spectrum of the policy community, on at least a fair number of reforms that would actually work if the politicians -- meaning the moderate left, because the right is already on board -- would only agree to implement them.
In short, this crisis is not anything that couldn't be solved by Ronald Reagan, Jack Kemp, Paul Ryan and some of the House Republican committee chairmen from 1995 through 1997. The elements exist for a recovery. Only Barack Obama and some left-wing Senators stand in the way.