by Scott L. Vanatter
What kind of economy did Obama inherit? Brit Hume put it this way:
“A central premise of the Obama campaign is that he inherited an economy in free fall, pulled it back from the brink and set it on the right path. But consider this. The economy fell into recession more than a year before Mr. Obama took office. By the time he was inaugurated the worst of it was over, the economy was still shrinking, but the steepest decline had occurred in the final quarter of the year 2008. It shrank less in the first quarter of 2009 and by June of ‘09 it began to grow again marking the official end of the recession. Mind you, this occurred before almost any of the massive stimulus spending Mr. Obama has signed into law had taken affect. ‘Yes,’ you might say, but in terms of job losses the worst was still to come when Mr. Obama came in.’ But that’s not so either. More than half the 8.7 million jobs lost as a result of the recession had been lost by inauguration day.”
How weak is Obama’s economic recovery? Hume continues:
“The president inherited an economy still in recession all right, but it’s recovery came before his policies could take effect… And remember this: Deep recessions, including those involving a financial crisis, normally lead to strong, sharp recoveries. But this has been the weakest recovery since World War II.” (Brit Hume, Fox News Commentator, on Bret Baier’s show, Special Report on the Fox News Channel, Oct. 1, 2012)
So, why is Obama’s economic recovery so weak?
First, Obama wasted unprecedented sums when he took office. By definition, and by experience, centrally-planned and directed “trickle down government spending” as Romney termed it can never be as efficient in creating jobs as the invisible hand of free markets.
Of course, there is a place for reasonable regulations. Romney masterfully taught the nation and an awestruck president how over regulation and imprecise regulation stifles the economy.
Even if Obama’s massive government investments in select industries had not failed so horribly, these “investments” robbed businesses of needed capital. The opportunity cost of not having taken a wiser path may be difficult to quantify, but nevertheless is a real cost and drag on the economy.
Teaching this principle to high school and college students, and voters in general, if not our elected representatives, will go a long way in getting our fiscal house back in order. This is just one of scores of free market principles which government violates at their own peril. Actually, make that, at our peril.
Picking winners versus losers is best left to the combined wisdom of private individuals and companies as they make informed and distributed decisions.
Second, if the opportunity cost was not bad enough, as Romney rightly described in his first debate, Obama didn’t pick winners and losers . . . he picked losers! Obama did not even try to defend his record on this. Essentially, he agreed. He blew it. It is indefensible. In fact, this was one of several points during the debate where the president looked and sounded defeated. He wanted to go home. Change the subject.
Obama famously picked a string of high profile losers: Solyndra, Fisker, and Tesla. These wasted billions of taxpayer dollars stand as a striking symbol of profligate government spending.
Obama was presented with a perfect storm of fear about the economy. He confronted it not with hope and change but cronyism. Obama’s $90 billion in Green investments was misguided and misdirected. How can these investments be moral or legal given that much of it was directed to supporters. These massive distortions not only dulled the economy, but enriched his cronies as they blew through so many gifted billions.
He ran roughshod through the China Shop of the economy. Those of us who did not stop him also share part of the blame. We let him spend such unprecedented amounts because we have not taught the People well enough to be able to see through his faux personal responsibility, middle class narrative. When Obama says that regular people, employees, especially union members, are due something because they “work hard and play by the rules,” he and other liberals are implying that the business owners are not working hard, and especially not playing by the rules. He implies that it was dumb luck which put them in power. He implies business leaders are dirty, sneaky, businessmen, and they take advantage of employees by violating the rules of fair play. He implies that what regular folk are due is a new or expanded government program. In Obama’s lexicon, employees are good and owners are bad – unless, of course, the owners are donors to Obama’s campaign.
Members of the Bush administration warned Obama that Solyndra could not last. They could read a simple income statement. Yet, the Obama administration aggressively pushed “Forward.” They pushed ahead without any real idea of what they were doing. They pushed ahead without any real stake in said investments. Why not toss massive dollars wherever they desired? Who would hold them to account? Not the People, in their considered opinion.
Due diligence, which real venture capitalists must do and want to do, was completely missing. The result is that hundreds more jobs were lost and hundreds of millions of taxpayer dollars were wasted.
Venture capitalists have to account for results. There is usually no accounting for a lack of success of politician’s largesse. This year may prove otherwise.
Third, Obama has established a climate of fear for businesses large and small. The constant drum beat against business and business owners scares the heck out of many businesses. The constant name-calling and vilification of business owners makes them fearful to invest more. Honorable business owners are disparaged as the “one percent” that by definition do not care about workers. In such a climate, risk investments are not made, growth is stymied, and new jobs are not created.
After he failed to win the White House, the once ultra-liberal George McGovern suggested that he would have run a different kind of presidential campaign had he owned a business prior to running for president. He did own a business after running for office and found the government intrusion a very real factor in being able to maintain and grow a business. President Obama has not yet figured this out!
Business leaders fear an environment of high taxation, additional regulation, and growing government control, not to mention the unknown. The unintended ill consequences of Obamacare make this climate of uncertainty even worse. This is in addition to the known and intended consequences of Obamacare which are bad enough.
What other extremes would Obama approach in an unencumbered second term? Nationalization? Of what industries? Single payer, cradle-to-grave universal health care?
Fourth, Obama’s economy is struggling mostly because he lacks even a modicum of basic knowledge about how the economy really works. Romney probably taught him more about the real workings of the economy than Obama ever heard in high school or college. The liberal if not radical anti-business training he received in college, now does Obama no good. He flails away speaking about an economy he doesn’t really understand, never really knowing what should be done. No wonder he has not achieved the results America needs.
The truth is Obama has made things worse by his liberal, uninformed, ill-informed bumbling. Violating the tried and true principles of a free market economy is a recipe for disaster. And America no longer has taste or patience for such results.
Fifth, Obama’s lack of experience in business and the economy — and his general lack of accomplishment in any meaningful endeavor – has been exposed during the last four years and was painfully obvious during the debate. He has not accomplished much prior to getting himself elected to high office, except writing two biographies. Obama’s thin resume of accomplishment leaves him ill-prepared to lead or make wise and informed decisions. Likewise, it leaves Obama ill-prepared to even understand the challenges the nation faces, much less how to solve them.
Obama’s lack of real world experience precludes him from even knowing whose advice he should seek. Not that Obama believes he needs to listen to his own advisors. Whether it is his own cabinet officials, or his daily security briefing, he has little interest in learning from others. He believes he already knows. Why ask questions? Why attend briefings? Why meet with cabinet secretaries? He believes he has little or nothing to learn.
During the debate, Obama was exposed as someone who overestimates his own abilities and his knowledge and underestimates almost everyone else. Obama’s own staff has said that he believes he is the smartest man in every room. In Denver, he wasn’t even the smartest man on the stage.
An aside: Obama’s obscene over-confidence in his abilities and in what he thinks he knows, make him not only an ineffective president, but a dangerous one. One need look no further than Obama’s failure to pass the laugh test or the sniff test on the absurdly false story that the terrorist attack in Libya was caused by some obscure Youtube video. One even need not attend national security briefings to understand that a well-coordinated and deadly attack on our embassies and consulates on the anniversary of the original 9/11 attacks is, in fact, a terrorist attack. If it looks like a duck, swims like a duck, waddles like a duck, and quacks like a duck, then it probably is a duck. Everyone on the planet understood this — except Barack Obama and his advisors. In fact, it is now known that the State Department did in fact know while the attack was going on that it was no protest to a silly, tacky Youtube trailer.
Worse than incompetence, his actions border on delusion – delusions of grandeur. Obama believes that his mere presence in the White House, and a bit of bowing and his natural charm would cause tensions to subside in the Middle East and around the world. He would calm the waters with a wave of his hand. His inauguration would cause the “rising sea level” to subside.
To paraphrase Ronald Reagan, “The trouble with Obama is not that he is ignorant; it’s just that he knows so much that isn’t so.” About the world, about the economy, and about his own abilities.
So, Obama has created neither a real recovery, nor any serious quantity of jobs. Even those months that had some modest job growth, have rarely kept up with population growth. So while Obama likes to claim the creation of a few million jobs, the truth is, that is barely enough to keep pace with new workers who join the workforce. It shows no real progress to re-employing those who have been hardest hit.
However, the question isn’t if government spending can theoretically create some jobs. The real question is – could a free market economy put such resources to better use and create more economic growth and more jobs? When Obama taxes business and those who create jobs so that he can increase government spending hoping that the increased spending will create jobs, he takes assets from their most productive use and then puts them to a relatively unproductive use. Little wonder the economic recovery is so slow.
Without a knowledge of, and trust in, the principles of the laws of supply and demand, and the basics of private enterprise, voters and their representatives are prone to succumb to the temptations of the moment. Individually and grossly our representatives violated the time-tested principles of free enterprise with very poor, even disastrous, results. This is precisely what Obama has done – violated principles and common sense.
Many voters and most all their representatives knew Obama’s command and control approach would not work, and that it might make things worse. How effective, or rather, ineffective was Obama’s spending binge? The weak results speak for themselves. The truth is the public and many of their representatives were cowed into letting Obama have his way. We were told that we had to give him a chance – even though the results of his failed policies were entirely predictable.
This is why jobs haven’t returned. Obama’s policies have not made things better. In fact, they’ve made things worse. His unprecedented spending, his uncanny knack for picking losers, his insatiable need to attack job creators and maintain a climate of fear and uncertainty in the business world, his lack of basic knowledge about how the economy works, and his lack of real work experience in the economy contribute to the deck being stacked against a successful recovery. Obama stacked the deck, and he didn’t know enough to see that he was sowing the seeds of failure and economic stagnation.
Obama has no practical body of personal knowledge to draw upon. Even after four years in the White House, he has no worthwhile experience. He has no clue. And at the debate, he proved that without the help of a teleprompter and carefully test-marketed phrases he can’t even pretend otherwise.
Now that the cronyism has been exposed, the Obama administration can be held to account. His inability to pick winners (and his penchant for picking losers), is a stand-in for Obama’s similarly uninformed strategies on practically every important issue. The Obama “investments” have been a massive failure.
“Trust me,” he says, “next time I’ll do better.” Fool me once, shame on me. Fool me twice… No way.
We won’t be fooled again! No, no.
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Scott L. Vanatter is the vice president of Frontiers of Freedom.