LITTLE ROCK — There is a growing uneasiness out there as more and more Americans are beginning to sense that they’ve put an economic illiterate in the Oval Office at a time when we can least (literally) afford it.
As Milton Wolf notes in a perceptive column for the Washington Times, when Ronald Reagan assumed the presidency in 1981 the nation was experiencing an especially severe recession featuring double-digit inflation and double-digit unemployment. Reagan’s response was to implement a recovery program consisting of tax, spending and regulatory cuts coupled with a strong dollar monetary policy. Recovery came quickly enough for him to win 49 states in 1984, by which time the country had also embarked upon what would become two decades of virtually uninterrupted economic growth and wealth creation.
Barack Obama came to office facing comparably difficult economic circumstances. Alas, he proceeded to do the exact opposite of what Reagan did. In Wolf’s words, Obama “raised taxes, unleashed a wild orgy of spending, including his disastrous so-called ‘stimulus,’ dramatically increased regulations and even nationalized industries and businesses, and printed money out of ‘quantitative easing’ thin air.” Obama’s team actually crowed about their opportunity to “repeal Reaganism.”
And so they did, and any chance of prosperity with it. It is difficult to find a more instructive pair of case studies on what to do and not do when combating recessions.
Much has also been made recently of some of the president’s gaffes indicating ignorance of basic economics, including his comments on ATMs and self-checkouts at grocery stores as job destroyers and his claim that tax breaks for corporate jets (that he and Nancy Pelosi put in their stimulus bill) are a cause of the budget deficit.
So where does such economic ignorance come from in an otherwise well-educated (or at least impressively credentialed) person?
The first explanation, as always with this administration, is ideology.During his short stay there, Obama was the most left-leaning member of the United States Senate. Prior to that he had spent virtually his entire adult life engaged in left-wing pursuits and surrounded by counterculture leftist remnants. Throughout his career our president has demonstrated, despite the soothing baritone voice and personable political style, the characteristics of an ideological true believer.
Obama’s leftism is worth dwelling upon because socialism isn’t simply an alternative economic approach but, properly understood, an effort to overcome economics itself, in particular that crucial economic concept called scarcity. The most extreme extrapolation of leftism, Soviet-style communism, actually sought to eradicate scarcity altogether by replacing the market with government edicts and planning.
Put differently, the left has long waged war against classical economic principles, seeking to use politics to corral the means of production for utopian ideological ends. That a president who has spent his life marinating in such a toxic stew might be hostile toward concepts like private property and profits is hardly surprising.
Joined to this ideological antipathy toward market economics is also a broad ignorance of how businesses operate in the real world. Academics like Obama are able to find refuge in “ivory towers,” so they usually have little knowledge of things outside of them of which they disapprove, in this case the world occupied by corporate leaders, small-business owners and investors. It would be difficult for anyone who has not spent time in academe to grasp the full extent of its insularity.
In Obama, then, we get the worst of two worlds, the combined effects of the usual leftist resistance to economic logic and the academic world’s hermetically sealed obliviousness of real-world economic realities. The insularity actually reinforces the ignorance by limiting exposure to other views and ways of thinking-whatever else we can say about his intellectual development, it is probably safe to say that Obama hasn’t taken much time to consider any ideas that fail to comport with leftist nostrums and orthodoxy. No Friedrich Hayek or Milton Friedman on his sort’s reading lists.
This would all be harmless enough (who, after all, pays much attention to the posturing of politically correct academics?) if not for the fact that such a fellow now seeks to govern a nation that has long been the world’s most important bastion of capitalism.As a result of this perhaps unprecedented mismatch between man
and nation, Obama finds himself
stuck in a painful bind-his ideo
logical orientation compels him to try to “spread the wealth” but his re-election prospects demand that he find ways to revive a staggering capitalist economy.
Obama can’t easily do the economically logical thing (like calling off the NLRB lawsuit against Boeing or expanding domestic oil drilling) because his ideology won’t let him, but he can’t continue to completely indulge his ideological proclivities either because he needs a robust economic recovery to keep the job without which his statist goals become merely infantile leftist fantasies.
In the end, then, our problem is we’ve entrusted the world’s most important economy to a man with the economic assumptions of a community organizer.
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Freelance columnist Bradley R. Gitz, who lives and teaches in Batesville, received his Ph.D. in political science from the University of Illinois.
Editorial, Pages 75 on 07/10/2011