Obama’s Economic Quackery

by Victor Davis Hanson

National Review Online

Sometimes the wrong medicine can make a struggling patient far sicker than he would have been had he been allowed to recover naturally. Western medicine began with the premise that the physician either must know how to cure the patient or simply leave him alone — but above all not make him worse through harmful treatment.

As 2011 ends, we have discovered how to turn a natural recovery from a near-record recession into a serial slowdown. Almost every haphazard, ad hoc attempt by Barack Obama to jumpstart the economy has only further stalled it. The president has never articulated a diagnosis of why the economy was stalled, never outlined a coherent treatment plan, and so cannot offer a prognosis. If we have a sick budget, a Byzantine tax code, bankrupting entitlements and long-term debt burden, and a costly imported-oil bill, one would never know all that from the president, who has never offered any sort of plan for addressing these crises.

Borrowing over $4 trillion terrified investors and business owners — especially given campaign promises that Obama would not be so “unpatriotic” as to match in three years the debt that Bush had piled up in eight. After all, no one could accuse the Bush administration of having left the economy moribund by slashing government, running balanced or surplus budgets, reducing the national debt, and in tight-fisted fashion denying federal bailouts to reckless banks and Wall Street firms. Apparently, Barack Obama saw the Bush administration’s economic transgressions not as warnings, but as a green light to borrow and spend even more on a predetermined redistributive agenda (“Never let a crisis go to waste”) — as if once a Republican administration had trespassed, conservatives could hardly throw stones at even greater sinners.

Government’s “shovel-ready” projects proved chimaeras — as if anyone could ever believe that tenured bureaucrats could spend such vast borrowed sums as efficiently as millions of private individuals responsible for their own success or failure. The irony is that drilling for more American gas and oil would, in fact, both be shovel-ready job stimulus and cost the government almost nothing; however, this was unacceptable given the opposition of the green insiders and the likelihood that corporations would profit.

Extending food stamps and unemployment benefits to record levels might in theory have sounded humane, but it eroded incentives, depressed the dependent recipients, and created no new jobs. Such gargantuan new expenditures were about as effective in combatting unemployment as prescribing a third round of antibiotics for a resistant strain of infection. A theme in many of Obama’s vast new spending schemes is that we are all supposed to believe publicly that the new largesse is the right thing to do, even if we privately shrug that it inevitably ensures quite the opposite result, given unchanging human nature.

Blaming sluggish growth on everything from ATM machines, tsunamis, and the Europeans to private-jet owners and the top 1 percent of taxpayers only reminded the general public how little those in charge knew what was going on, and reminded the particular targets why they were smart to hoard cash, not buy, and not hire — in fear of new taxes, new regulations, new costs like Obamacare, and a new antagonism from an accusatory commander-in-chief himself. Blaming the patient — uncompetitive, soft, lazy — is the worst thing a doctor can do.

If one were trying to dream up a way for the Energy Department to ensure fewer jobs, less energy, and higher costs, it would be hard to match the record of Secretary Chu. We have spent billions subsidizing inefficient solar- and wind-power companies with political connections; the results have been little or no new energy, but lots more federal debt. Thanks to Obama, the “alternative energy” industry is now discredited, as “millions of green jobs” have been downgraded to the status of “stimulus” and “investments.” Apparently, when crony capitalists and insider con men put the word “green” in front of their schemes, we are supposed to suspend moral judgment, as if they purchased medieval indulgences exempting them from scrutiny.

Stopping offshore oil exploration, curbing drilling in Alaska and the continental United States, and postponing a proposed oil pipeline from Canada are the sorts of luxuries that cash-laden, energy-rich postmodern societies can enjoy. But for now, unfortunately, we remain a nation of 150 million drivers, $15 trillion in debt, with an annual imported-oil tab of well over half a trillion dollars.

So far, no one in this administration can explain to the public how and why “Cash for Clunkers,” Obamacare, buying into GM, threatening Boeing, the second stimulus, or new regulations on business were supposed to create more jobs or economic growth. The common denominator in all these failed efforts is the assumption that a technocrat with an Ivy League certificate knows far more about business than those who conduct it. Usually the more suspect the doctor, the more framed degrees on the waiting-room wall.

In a psychological sense, it certainly confused the public to demonize Wall Street and the top income earners, while engaging in crony-capitalist insider deals with them — not to mention hosting these demonized fat cats in hopes of snaring their contributions. Was Obama a fiery populist, a Bill Clinton starstruck corporate wannabe, or a complete cynic who assured a select few donors and supporters on Wall Street that all his fiery bombast did not apply to a Jeffrey Immelt, Warren Buffett, George Soros, or Bill Gates? When millions of small contractors and professionals were lumped in with hyper-rich insiders such as Jon Corzine and Hank Paulson as the suspect “millionaires and billionaires” who were not paying “their fair share,” are we surprised that many in the private sector are sitting this recovery out?

Dr. Obama faults his patients for losing their old industriousness and competitiveness — as if we were deliberately failing to make enough money for our more enlightened doctor to redistribute to more deserving others. And he thinks that such lackadaisicalness is at the heart of the present slowdown. But if that is true, our collective sloth may well have come about because Obama’s own policies encourage just those traits that apparently so bother him. After three years, we can fairly summarize that Obama has been anti-empirical: He came in with an agenda to redistribute income, expand government, raise taxes, emphasize class divisions, and deflate the American profile abroad — and he quickly turned petulant when all that worsened an economy that was never to be his main interest but was necessary to fund his fantasies.

“Do no harm” is the first commandment for any good physician. In contrast, daily poisoning the ill patient with a medicine chest of toxic pills is the work of a quack.

©2011 Victor Davis Hanson

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