by Victor Davis Hanson
PJ Media
“They Did It!”
The president just concluded a frenzied “jobs” bus tour to explain why unemployment is at 9.1% — after borrowing nearly $5 trillion in stimulus the last three years. You knowthe usual suspects [1] responsible for our, not his, malaise: George Bush did it; the Republican obstructionists in the Congress who were wary of approving another $2 trillion in debt did it; the Tea Party did it; Standard and Poor’s did it; the Japanese earthquake did it; the Japanese tsunami and nuclear accidents did it; the Middle East unrest did it; the European debt crisis did it; new technology like ATM machines did it. Obama has cited these culprits and many more — though never either himself or his advisors who took a weak recovery and turned it into a near recession.
Where Are They Now?
Unofficial and sometimes presidential economic advisor Paul Krugman is increasingly petulant, blaming too little borrowing for the dismal 9.1% unemployment rate, some two years after the recession that began in December 2007 “officially” ended in June 2009. (Note the Zeno-like paradox of too much never being quite enough.) Remember the presidential advisors — Austan Goolsbee, Peter Orszag, Christina Romer, Larry Summers — who, in the euphoria of the hope and change election sweep of November 2008, advocated a World War II-like new level of federal indebtedness. They are now quietly back on Wall Street, back to their tenured academic perches, or considering departure. They remain either mum or in op-eds visibly confused about why a strong recovery did not follow a strong recession in the manner of all other post-war ups and downs.
So there seems to be genuine confusion — and fear — on the part of leftist economic advisors that the capitalist engine that fuels their redistributive government for some unknown reason [2] is not running on all cylinders and thus cannot quite continue to make the money that even capitalism’s critics count on for support. It reminds me of the please-please letters alumni receive when annual giving to their almae matres is down, and the left-wing president’s mega-salary and the center for gender studies are possibly imperiled.
Start Hiring, Stupid!
Both the president and his supporters fault supposedly self-interested corporations and “the rich” who sit on “trillions of dollars” in capital and won’t hire new workers or make massive purchases of equipment. They are the real cause of record budget deficits, unsustainable aggregate debt, credit downgrading, high unemployment, a nose-diving stock market, sluggish growth, near-zero interest rates, explosive trade deficits, sky-high energy and food prices, a still ruined housing market, and a general fear of new hyperinflation.
There is some truth to Obama’s screed, though not quite in the way he thinks. So let me be perfectly clear and make no mistake about it and let’s be honest: The employers of America have taken a time out, despite the fact that now might be a good time to gear up for the inevitable recovery. They haven’t let the resting world fall entirely from their broad shoulders, but they have bent over for a bit and the globe is tottering on their upper arms.
Consider why after nearly three years our tired Atlas is starting to slouch.
The Slurring and Smearing
Every president lets slip a smear now and then. The key is that there should be little consistency or frequency in his targeting. But with Obama there is both monotony and predictability. He clearly does not like private businesses — except the super wealthy who are liberal and share his refined tastes and politics and have enough millions in “unneeded income” that they figure they will either die before or weather through our transition to European democratic socialism.
Of course, one Huey Long–like “fat cat,” an occasional adolescent “millionaires and billionaires,” a once-in-a-while juvenile “corporate jet owners,” a few 1960s-like “spread the wealth” or “redistributive change” slips, a single petulant “unneeded income,” or a sole pop-philosophizing “at some point you’ve made enough money,” or even on occasion the old socialist boilerplate “those who make over $250,000 should pay their fair share” in isolation are tolerable. But string them together and even the tire store owner and pharmaceutical rep are aroused from their 70-hour weeks, and start to conclude, “Hmmm, this guy doesn’t like me or what I do, and I better make the necessary adjustments.” And, believe me, they are making the necessary adjustments [3].
Play Money
Business people were confused by the Bush bailout. Some gave Obama a pass for Stimulus II (especially those on the receiving end). When we hit $3 trillion in proposed new borrowing, concern rose. Now with nearly $5 trillion recently borrowed and another $10 trillion scheduled over the next eight years, the private sector has concluded that this guy loves trillion-dollar debt because either (1) it fuels big government and more regulations and more dependent constituents; or (2) it will inevitably cause more redistributive taxes on the productive sector; or (3) it will spur inflation and erode the value of accumulated wealth; or (4) all that and more still.
Regulations Are Not Just Right-Wing Talking Points
But talk is talk and even the specter of crushing national debt is still not enough to sucker-punch our Atlas into bending a bit. But absorbing one-sixth of the US economy, and putting new multi-thousand-dollar per worker regulations and obligations on employers to ensure government-run healthcare for their employees? Add that worry to the new Dodd-Frank regulations that add millions of collective hours of unproductive busy-work. Recall support for card check, and the reversal of the Chrysler creditors — and employers start to connect the dots. They see emerging a Regulator-in-Chief [4] who thinks business is mostly collecting easy profits off the backs of exploited workers and from a clueless, exploited public. Still think that is hyperbole? Ask Boeing why at a time of unsustainable trade deficits, high unemployment, and fierce competition with Airbus, Obama has unleashed the NLRB to shut down a billion-dollar plant. Ideology trumps reality every time.
Energy Matters
Trying to stop shale oil exploration in the West might be an abstract issue on page nine of the Wall Street Journal. Perhaps we can get by without ANWR. Americans can forget now that Obama wanted cap and trade to pass the Senate and to become law with his signature. Maybe there are oil leases in the Gulf of Mexico that we can afford to forget about. California just possibly can import gas and oil without tapping all of its off-shore wealth. The new proposed Canadian pipeline in isolation might seem problematic. OK, now and then we should worry about the environmental downsides of fracking.
But all this together? The country simply has been given too many chances, and now the energy bill is mounting. Businesses really have concluded that Obama was once serious when he warned that energy prices would “skyrocket” and coal companies would be “bankrupt” trying to generate electricity under his new proposals. The tens of billions in “stimulus” that went, in sweetheart fashion, to solar and wind “industries” did not produce “millions of green jobs” but a few zillion-dollar megawatts of electrical production.
Taxes Are Not Investments
A couple of suggestions that tax brackets might need to be adjusted would slide off the backs of most business people. Perhaps we can even smile at Barack Obama’s new arbitrary $250,000 divide — above which those who make good money now pay 60% of the aggregate income taxes and are slurred with not paying “their fair share,” while 50% of American tax filers below pay no income taxes and are promised that they “won’t see one penny in new taxes.” That nearly every discussion on the debt ceiling was introduced by Obama with the euphemism “new sources of revenue” and “investments” was only a little alarming.
Yet once again, add up all the 31 months of tax-hike demagoguery. Those who hire finally got it into their collective heads that they were not merely not liked and to be overregulated, but to be further taxed as well — not in a conciliatory manner as contributing to the nation’s welfare, but in punitive fashion as if they were culpable for making profits in the first place.
Academics Don’t Know a Hammer From A Wrench, a W-2 from a 1040
Van Jones [5] and Anita Dunn were pathetic distractions. Eric Holder was simply a deer-in-the-headlights member of the liberal apparat. Timothy Geithner seems clueless. Few will watch another silly video from Hilda Solis or pay much attention to the latest strange pronouncement from Janet Napolitano. Steven Chu’s dreams of gas prices reaching European levels and California farms blowing away due to global warming or Sierra snowpacks disappearing by now are merely boring.
But still again, total all of those ravings up — and without a CEO, farmer, or small businessperson in the bunch? The best that could be said from these appointments is that they raise ambiguity: are they (a) just starry-eyed, clueless academics and technocrats on sabbatical from tenured perches in universities, foundations, and bureaucracies, or (b) are these hard-core soldiers in the Obama army that is intent on making us more like the Belgians and Greeks? Both and more still?
A Thankless Job
The private sector has now begun collating Obama’s public statements, the political significance of hyper-debt, the force of his new regulations, the constant talk of higher taxes, and the array of strange appointees.
On the one hand, our Atlases are productive, entrepreneurial people who appreciate the singularity of the American experiment and the opportunity to profit and thrive, even when coming out of a severe recession. Real opportunity, they know well, is often best found in crises, not just in continued prosperity.
But, on the other hand, they are deeply worried that the rules of the game are changing for only the second time in American history and that they are unliked, targeted and to be punished for being successful. The result is not that the private sector is fleeing the US (where would one go?). Nor are entrepreneurs and go-getters shutting down their businesses that they have built from the ground up.
Instead, what we are witnessing is a sort of shrug, a pause, best summarized millions of times over as something like “I’m hoarding cash, hunkering down, and am going to wait this bad bunch out.”
So the globe is tottering as the tired-of-it-all American Atlas has finally sorta shrugged.
URLs in this post:
[1] the usual suspects: http://www.washingtontimes.com/news/2011/aug/16/the-bad-luck-president
[2] for some unknown reason:http://www.investors.com/NewsAndAnalysis/Article/581555/201108151901/Regulatory-Agencies-Staffing-Up.htm
[3] the necessary adjustments: http://pajamasmedia.com/eddriscoll/2011/05/27/theres-a-reason-why-its-called-the-forgotten-man
[4] a Regulator-in-Chief:http://www.politico.com/politico44/perm/0811/call_uncle_sam_5c130fdd-0e34-4b04-99e1-3d923ea3919e.html
[5] Van Jones: http://pajamasmedia.com/ronradosh/van-jones-left-wing-tea-party
©2011 Victor Davis Hanson