Wednesday, August 25, 2010

Obama's Ridiculous Economic Meme

The biggest lie told over the past century is that the Democratic left are better stewards of the economy than Conservatives. It worked to in 2008. And Obama is trying to sell to America that the right "can't be trusted" to control our economy as "Bush got us into this mess." As proof thereof, he cites to deregulation and "Wall St. greed."

We are now stuck with a President who believes that the profit motive is immoral, that businesses should be soaked of their wealth for redistribution, and that the economy can be successfully micromanaged from Washington. And we are stuck with a far left Congress that is the most profligate of all time.

The truth is that our economy fell apart because of social engineering by Democrats. Over a roughly 15 year period, they ruined our credit rating scheme as part and parcel of a massive push for "affordable housing." Instead of pursuing this laudable goal by market-based programs, they did so by means of punitive, race based social engineering. At every turn, they used the race card to protect the scheme. And in the end, they created a bubble with Fannie and Freddie that got so big that when it burst, it took our economy into the tank.

So either Obama is lying about all of this, or the right is. How can you possibly know which is which? It's easy.

If the Democrats were actually right, then their solutions to our ailing economy would have worked. Instead, the opposite has occurred. They have used our economic crisis to engage in even more social engineering between healthcare, labor regulations, massive favortism to unions, and new financial regulations. And our economy is on life support. It in serious trouble. Real unemployment is well into double digits and shows no sign of easing. Yesterday's housing report on sales of new and existing homes was the worst in well over a decade. Every day, we are accruing debt at record levels. CNBC reported today that, according to at least one respected economist, we are now in a depression. Indeed, the word incompetent doesn't begin to describe this President and Congress.

This today from John Strossel discusses the current economic situation:

Why isn't the economy recovering? After previous recessions, unemployment didn't get stuck at close to 10 percent. If left alone, the economy can and does heal itself, as the mistakes of the previous inflationary boom are corrected.

The problem today is that the economy is not being left alone. Instead, it is haunted by uncertainty on a hundred fronts. When rules are unintelligible and unpredictable, when new workers are potential threats because of Labor Department regulations, businesses have little confidence to hire. President Obama's vaunted legislative record not only left entrepreneurs with the burden of bigger government, it also makes it impossible for them to accurately estimate the new burden.

In at least three big areas -- health insurance, financial regulation and taxes -- no one can know what will happen.

New intrusive rules for health insurance are yet to be written, and those rules will affect hiring, since most health insurance is provided by employers.

Thanks to the new 2,300 page Dodd-Frank finance regulatory act, The Wall Street Journal reports, there will be "no fewer than 243 new formal rule-makings by 11 different federal agencies." These as-yet unknown rules will govern lending to business and other key financial activity.

The George W. Bush tax cuts might be allowed to expire. But maybe not. Social Security and Medicare are dangerously shaky. Will Congress raise the payroll tax? A "distinguished" deficit commission is meeting. What will it do? Recommend a value-added tax?

Who knows? But few employers will commit to a big investment with those clouds hanging over our heads.

"As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company's vulnerability to government," Michael Fleischer, president of Bogen Communications Inc., wrote in The Wall Street Journal.

Nothing more effectively freezes business in place than what economist and historian Robert Higgs calls "regime uncertainty."

"(A)ll of these unsettling possibilities and others of substantial significance must give pause to anyone considering a long-term investment, because any one of them has the potential to turn what seems to be a profitable investment into a big loser. In short, investors now face regime uncertainty to an extent that few have experienced in this country -- to find anything comparable, one must go back to the 1930s and 1940s, when the menacing clouds of the New Deal and World War II darkened the economic horizon."

Uncertainty created by Obama's legislative "successes" are comparable to the Depression and World War II? This does not bode well for job growth.

Higgs says: "Unless the government acts soon to resolve the looming uncertainties about the half-dozen greatest threats of policy harm to business, investors will remain for the most part on the sideline ... consuming wealth that might otherwise have been invested."

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