Barack Obama the terminator
Although the White House still is celebrating “health care reform” and now is trying to promote “financial reform,” in truth, there is nothing to celebrate. This current gang occupying 1600 Pennsylvania Avenue is taking the meat axe to our economy, sparing nothing. Obama might want to be called the Second Coming of FDR, but I have a better name for him: the Terminator.
When we think of the Terminator, “Ahnulhd,” comes to mind. When Schwarzenegger was elected governor of California, people called him the “Governator,” but even Ahnulhd, for all of the damage he has done, cannot match the Obama administration. For that matter, even George W. Bush, one of history’s most irresponsible U.S. presidents, seems responsible compared to Obama.
I knew that Obama had the potential to be destructive, but I did not think he actually would use his powers of office to ensure that the United States would become the Second Coming of Argentina. Unfortunately, the man seems to believe that he was elected to bring down the economy and burden Americans forever with high taxes, debt, and an insufferable bureaucracy.
By this time, the reader is wondering why I am so hot and bothered. Am I a Tea Party activist? No. Do I watch Fox News? No. Did I buy Sarah Palin’s book? No.
Then, why I do sound like the most hysterical of the Tea Partiers? I sound hysterical because I know what Obama is doing, and understand the results that await us. He ran on a platform that he was a miracle worker, and that he would “save” America, but the only people who will be saved are those who are politically-connected.
Let us first look at the spending this administration has been doing. Yes, Bush was irresponsible, and I have documented that fact many times, but Obama makes the guy look like a piker. Here is a president who is pushing budget deficits of two trillion dollars. That is astounding, and what is more astounding is the fact that economists like Paul Krugman believe that this profligacy poses no threat to our economy.
First, because tax revenues are dwindling, the only way that government can pay for its out-of-control spending is either through borrowing or directly printing money via the Federal Reserve System. The former piles on the debt, which each day becomes more and more unpayable, and the latter will lead to hyperinflation.
Second, despite what we might read from Krugman and his like-minded friends, government spending is not the precursor to prosperity. Instead, government spending, and especially the out-of-control spending promoted by Obama and his minions in Congress is killing what prosperity we might have left.
Keynesian “economists,” who pretty much control what is in college economics texts, claim that recessions occur because private spending suddenly (and inexplicably) goes into the tank. When that happens, government must “spend to the rescue.” It is a nice, clean, simple model and politicians, who love to be thought of as heroes, as opposed to the gang of criminals they often become, are ready to jump on the Keynesian bandwagon and spend, spend, spend.
To a Keynesian, all economic assets are homogeneous, and the economy is like a cake mix from a box in which you add the magic elixir of “spending.” Thus, it does not matter if we build bridges from here to China, roads to nowhere, and towers of Babel, just as long as we build something. This is silly on its face, and is like saying that the building of the Pyramids made all of Egypt wealthy.
What happens in a recession? As I have written on these pages before, a recession occurs not because people stop spending; indeed, people stop spending because of the recession. During a boom, structures of production become distorted, as resources are directed toward lines of production that are not sustainable (think housing bubble). The crisis occurs when it is clear that these investments lose value and face bankruptcy (think bailouts).
However, it is necessary for these misallocated assets to be liquidated or directed to more profitable lines of production because recovery will not occur until the assets and investments that can be profitable (and sustainable) are able to proceed unhindered by other malinvestments. Unfortunately, because the government bailed out a number of unprofitable firms and has tried to buoy asset values instead of letting their prices fall to their true market levels, we are not even at the bottom of the recession.
Furthermore, the Obama administration is ensuring that those lines of production that still are profitable and promising are going to face a hostile government, and I can assure you that many healthy companies are going to be destroyed because Obama cannot stand private prosperity. To make matters worse, the government is misallocating billions of dollars for “green” technologies that actually are destroying wealth.
What can be done? Not much, I’m afraid. Obama is catching his second wind and is determined to use the powers of the presidency to destroy what is left of our economy and replace it with the dead hand of bureaucracy. Even if Republicans do well in the November elections (and I am not sure they will do particularly well), Obama will just use the vast powers of the executive branch to further hamstring the economy through regulations and harassment.
Furthermore, both Republicans and Democrats want the disastrous wars in Afghanistan and Iraq to continue indefinitely. In other words, there really is no end in sight either for ending the conflicts or for inflicting harmful policies on the economy. Both are destructive, and there seems to be no consensus powerful enough to stop the madness. To paraphrase Sir Edward Grey, I am saying that the lamps are going out all over the United States of America, and I doubt we will see them lit again in our lifetimes.
Dr. William L. Anderson is an assistant professor of economics. A native of Chattanooga, he received his bachelor’s degree in communications from the University of Tennessee, his master’s degree in economics from Clemson University and his Ph.D. in economics from Auburn University.
An accomplished writer, Anderson has written for national publications such as Reason Magazine. He has served as a reporter and editorial writer on the staff of ETBJ for over 18 years.
