Thursday, October 7, 2010

The Failure of Obamanomics

Obamanomics has clearly failed. The unemployment rate was 7.6% when President Obama entered office in January 2009. It is now 9.6%. 11.1 million were unemployed in December 2008. 14.9 million are now unemployed.

Keynesian economics and pump priming, in spite of its seductiveness, failed in the United States and England in the Great Depression, just as it failed more recently in Europe. ¾ of the Obama economics team have left or are leaving the Administration in the detritus of the economy. Treasury Secretary Tim Geithner, who has spent almost all his life in the government sector, remains.

It doesn’t matter; the economic plan is that of the President.

He is a true believer. He believes that the United States is an economic oppressor of the less developed countries, and that the wealthy in America, anyone earning over $250,000, oppress all others.

He fails to understand that consumption comes from the disposable income of the middle class in America and around the world. Marx referred to it as “capitalistic bourgeois decadence.” We view it as jobs and a rising standard of living.
He made it clear in his confrontation with Joe the Plumber – it’s about “fairness.”

Fairness to Obama means income redistribution – not creation. President Obama is anti-business, anti-private sector, and anti-capital, but pro-government.

Obama is a true believer; 20 years of listening to the Black Liberation Theology of Reverend Wright, consorting with William Ayres and Bernadette Dohrn, He is a true believer in class warfare. He shares the envy for those who succeed.

He is also narcissistic and arrogant. He cannot admit a mistake because he cannot recognize a mistake. He believes he is the One. He fervently believes he is the One to transform America.

President Obama is a true believer who wants to transform America into the “fair, socialist paradise” of Western Europe, the bankrupt Italy, Spain, Ireland, and Greenland. To restore Americans to their jobs, to restore the status quo, to rebuild the private sector, would be a defeat for President Obama’s vision of America.

The Obamanistics play by Chicago Rules – Reward your friends, and screw your enemies. Thus, the Stimulus funds were not intended for the American people, but for their benefactors, the unions and trial lawyers.

“Enemies” are demonized, such as insurance companies, the Chamber of Commerce, banks, doctors, Fox, Hannity, Beck, Limbaugh.

The Administration has nationalized, semi-nationalized, or demonized significant segments of the economy, including student loans, health insurance, mortgages (Fannie Mae, Freddie Mac, and FHA), GMAC, most of Detroit.

The members of Congress think they are smarter than the Market. They are, in fact, economically ignorant. Because they are smart enough to be elected to Congress, and then, corrupted by power, they believe they are smarter than the Market in picking winners and losers. What they do is reward their political favorites. Keynesian pump priming in America is simply politicians deciding the winners of government largesse.

Just recently Congress enacted a small business bill to provide loans to small businesses that need them to survive. Taxes are going up on January 1, 2011, hitting successful small businesses especially hard. Now due to the Congressional geniuses, small business will have to borrow back, with interest, the monies that were taxed away from them.

The President and the redistributionists in Congress believe that government creates wealth and jobs – not people. He let the Congressional redistributionists draft the Stimulus and Appropriations Bills. President Obama believes wealth comes from the government, for in his years as a community organizer, it was about getting money from the government.

The President was a political science major and his wife sociology. Economics is an alien concept to them.

The Fed is running out of tools to jumpstart the economy. Heresy of heresy, it is talking about introducing inflation into the economy.

They keep shoveling money out the Capitol, attempting to shore up the economy, but they won’t get out of the way.

The theory of Keynes is that priming the pump will jumpstart the economy. Obamanomics is not even normal Keynesian economics, but a bastardized form in which the monies are distributed to a favorite few, usually in the form of transfer benefits. It’s not egalitarianism; it is simply Animal Farm.

To spend hundreds of billions on transfer payments, shoring up existing programs, and state and local expenditures is not Keynesian. The coffers of state and local governments are depleted. Simply sending them more federal funds is simply postponing the inevitable correction. They can’t raise taxes fast enough, but pensions and entitlements are strangling them. Bailing them out will end soon.

The Stimulus Bill failed and with it the failure of Obamanomics.

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