Obama’s Economic Policies: What’s Wrong, in a Nutshell

People are overwhelmed by the avalanche of bad news, and of news in general. It’s difficult to stop long enough to summarize objections to the new economic policies fostered by Presidents Obama and Pelosi.  Besides, if you tried, you might just strangle with horror and indignation. I made the effort. Here it is:

Pres Obama wants to re-distribute wealth when the amount of wealth available to re-distribute  is dwindling. It’s never happened, I think, in any democratic, market-oriented country before. Normally, you wait for a period when wealth is growing.

Pres Obama insists on an expensive stimulus package that will do, and has done little to stimulate the economy. Keynesian economics is largely wrong. This is Keynesian economics at its worst. It’s not even defensible by Keynesian standards.

Pres Obama choses a severe economic downturn to force us as a nation to try and do things we don’t know how to do. This includes switching from proven energy technologies such as coal and petroleum-based technologies to unproven ones such as air and wind technologies. It includes also constructing a satisfactory national health system, something no country has done. Normally, whenever you try something new, you make mistakes. You need a margin of error. You need to be reasonably rich. You don’t want to do it on a tight budget or when you are close to poverty.

Pres Obama is not evil. He has something I have seen hundreds of times in academia: He knows what he thinks he knows and he does not know anything else. He is narrow-minded and dogmatic. The more intelligent the person, the more stubborn in his narrow-mindedness and in his dogmatism. A less intelligent person would have the virtue of self-doubt, “Wait a minute, am I doing the right thing?”

Perplexing: There is an international media consensus  to the effect that the current global economic crisis was made in America. Yet, I detect no rise in anti–Americanism abroad. This would be a good time to be pissed off at us but, I don’t see it anywhere.

I wrote on this blog about “European Anti-Americanism.”  I suggested it was mainly based on envy. Perhaps, I was right: Others like us better when we are down and hurting. What do you think?

Recently, I mentioned the sentencing of a 75-year old woman to a whipping, in Saudi Arabia. I promised that I would check for indignant reactions on the part of Muslims. I have seen nothing on the website of the American Muslim Council and nothing of the website of the Islamic Society of North America.  I haven’t found anything either on French Muslim sites.

Of course, it’s disturbing. I would like it if someone told me that I am wrong and that I searched in the wrong places. I know I have Muslim readers. Get on your feet and do what’s right.

[Editor's note: this essay first appeared on Dr. Delacroix's blog, Bay Watch, on March 26th 2009]

About these ads

11 thoughts on “Obama’s Economic Policies: What’s Wrong, in a Nutshell”

  1. A couple of problems in your article. You say Obama wants to redistribute wealth but claim this has never been done ” in any democratic, market-oriented country before”. This is completely wrong. The very nature of an income tax redistributes wealth. This has been done numerous times in America’s past but also in Europe. European countries set up their welfare states in the aftermath of the Second World War when their economies were in a worse state.

    “Keynesian economics is largely wrong.” Really? Then how did we get out of the Great Depression? What explains the 30 Glorious Years between 1945-75? As a Keynesian the only problem with the stimulus was it was too small. This may shock you but think. We are in a 15 trillion economy in the worst recession since the Great Depression in which the financial sector almost collapsed. Did you think we could of solved this in a single year? The problem was the stimulus was too reliant on tax cuts and was mostly off set by states cutting their budgets.

    Proven technologies like coal? Yeah they’re proven to destroy the environment. Obama’s actions are in fact extremely mild compared to the massive threat of Global Warming.

    1. Robert: You don’t read carefully enough, I think. I said that it’s never happened that a country tried more redistribution during of dwindling economy. Keynesian economics? Your comment comes three years after I wrote the text. Three years later, would you say that the Bush/Obama stimulus did the job? It would be better to argue that it was not Keynesian. I would write something different today because I think Keynes envisaged short term, quick kicks in the economy’s but, not the endless crony spending that Obama gave us.

      How about ten times more than he spent? How about one hundred times? Is there a level where you would say, “Enough, it’s not working.”?

      I have written extensively on my blog, Facts Matter about global warming. In brief, I think there is no global warming that is man-made and requires immediate attention. I cannot help myself. I read something into the fact that you capitalize “Global Warming,” like “Holy Ghost.”

      You sound like a religious man, bless your soul!

      1. Addendum: I forgot to say that it seems to me that when France, Germany and then Italy set y up the first bases of their welfare states, their economies were growing, not shrinking. That should be fairly easy to check. If I am wrong, tell me. The only point I was making is that the time to engage in vigorous redistribution is when the economy is growing. I suspect there is tendency to conflate “poor” (level) with “decreasing” (motion).

    2. Thirty glorious years between 1945-1975? From what textbook, young man, did you read this drivel? Let me pull out my vintage 1975 “Whip Inflation Now” button and set you straight–pin first.

      1. Those years had record low levels of unemployment (reaching 1% in some countries) and inflation as well as record high levels of economic growth. There were few recessions, none were that sevre and there were no banking crisis. The term is a French one but is recognised by most economists. It came to an end with stagflation in the mid 70s (different year in different countries)

      2. Rick,

        Welcome. Robert has a very keen imagination, but he often has trouble confronting facts, even when they smack him the face. The “glorious” years from 1945-1975 are not recognized as glorious by “most economists” and can be explained in two simple parts:

        1. Unemployment was low because most of the young men in Europe and Asia had just been slaughtered in World War 2, so jobs were plentiful. Keynesians don’t care about this small fact, of course.

        2. Robert’s “high levels of economic growth” were not really growth at all, but rebuilding efforts undertaken after the war. Real economic growth did not begin in Europe until about 1960, and, true to form, this is when governments throughout the West began to raise taxes, increase spending, and erect trade barriers again (which helped lead to the infamous “WIN” buttons).

        Europe didn’t recover from the Keynesian debacle until the early nineties, when liberalization began to be embraced in earnest by states there. Establishing a central bank put an end to the liberalization efforts there, of course.

  2. Where do you get this notion that Keynesianism is wrong? Paul Krugman has been right on the money predicting the outcome of various policies during this recession, and his analysis is distinctly Keynesian. It’s odd that you would argue that the bust is not the right time to fix wealth distribution when wealth distribution has played a large role in perpetuating the bust. When consumers aren’t being paid enough to incentivise consumption while the profits go to the upper classes where the money is saved and not spent, demand remains stagnant and growth is slow. You ask for someone to tell you that you are wrong and that you searched in the wrong places? You are wrong and you searched in the wrong places.

  3. Thank you. Your comment comes three years after the posting of the text. Did the past three years modulate your Keynesian views at all?

    It’s difficult to discuss Krugman. IN his columns, he is usually a fanatic and a madman. His scholarly articles are well argued, persuasive even for those like me who are not inclined to share his statist assumptions. I am only interested in the virtuous brother. The vicious twin is too far from me to discuss. It would be like talking sociology with Joseph Stalin, just not worth it.

    There are no “upper classes.” In this country, Both income and wealth describe a perfect continuous distribution, I think.

    I would be interested in serious discussions of a historical case of Keynesian stimulus that worked. 9The Great Depression’ s aftermath is not one.)

    1. Jacques,

      For more on Keynesian economic policies and their utter failure, see this post of mine.

      Ben,

      Paul Krugman has been right on the money predicting the outcome of various policies during this recession, and his analysis is distinctly Keynesian.

      Care to provide any citations?

      1. Brandon is sometimes the best wingman. When I die, I am thinking of leaving me my flightsuit.

        Often, I don’t reply thoroughly. Most of the time it’s because the commenter is too far from me, we live in different worlds, and I suspect his is imaginary. Or, he is too old to be worth the effort.

        Sometimes, as in this case, it’s because I have lost interest. I lose interest when the real world overtakes my columns and proves them more than right. It would be useful to revisit my predictions that turned out dead wrong.

Please keep it civil (unless it relates to Jacques)

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s