What Barack Obama Knows about the Economy
I am not surprised in the least that a video has surfaced indicating that our president believes in income redistribution. But a lot of people missed one of the most revealing statements Barack Obama made in that video.
Tim Sandefur, however, is not one of those people:
. . . to me, the interesting part of the recording is this:
[T]his is one of the few areas where I think there are technical issues that have to be dealt with as opposed to just political issues....
As I wrote some years ago, his mantra of “hope” indicates a mentality in which questions about incentives—the major “technical issue” of public policy—matter less than questions of will. In Obama’s world, subjects such as how is wealth created? or how does technological innovation and progress occur? are basically irrelevant, because the point of public policy is todivide up the “social wealth” and allocate the resources that “society” has created to those who are most deserving. And who is most deserving? Those who exercise the political will to claim their share of the pie. In Obama’s mind, there are no such thingsas invariable economic laws—these are products, not of the nature of people and resources, but of human will and determination. If human beings choose to believe otherwise, or to change how they approach the world, then these economic laws will change, too. Technical problems like incentives matter less than the exercise of sheer determination.
Remember, a president's misunderstandings of economics are not consequence free. Those misunderstandings still serve to shape the formulation and implementation of policy. We have what happens when Barack Obama applies his "knowledge" of economics to the making of economic policy. Do we really want to sign up for another four years of the resulting trainwreck?
- Comment (7)
- · Quote
- · UnfollowFollow (1)
Comments:
Sep '12
Re: What Barack Obama Knows about the Economy
There's no evidence that Obama misunderstands economics. Rather, all the evidence points to his rejection of supply side economics.
Put yourself in Obama's shoes when Pelosi handed him a summary of the stimulus bill. If he believed in supply side economics, he would have asked, "Is all of this spending really going to stimulate the economy?," because supply economics presumes that all spending is not equally stimulative. Instead, he sold it and signed, fully expecting that it would stimulate as advertised. How so?
Here's how. Obama is an indoctrinaire statist who believes in a two-dimensional, static economy. You put money into the economy, production happens, and wealth comes out in proportion to the amount of money put in and resulting production. It's irrelevant who puts the money in, or for what purpose it's put in, or what production it finances, or what's produced, or what happens to what's produced. Therefore, since all that matters is the amount of money pumped into the economy, the state should control more of society's money to spend on socially beneficial things. All that's needed is the will to power to make it so.
Re: What Barack Obama Knows about the Economy
This is correct. Obama is a believer in radical will. His contempt for Bill Clinton is a contempt for those who attend to the manner in which self-interest tends to guide human conduct. Like Rousseau, Obama reacts in horror to the picture drawn by Bernard Mandeville in The Fable of the Bees, and he prefers that we be equal and impoverished to our being unequal and prosperous. He is not bothered by the prospect that higher taxes might lower revenues.
Oct '10
Re: What Barack Obama Knows about the Economy
True, but let me dream of a future where the consequences are minimal, because the (Federal) government doesn't occupy the commanding heights of the economy.
Re: What Barack Obama Knows about the Economy
Lavaux, I think you just showed that Obama doesn't understand economics!
Professor Rahe, a pleasure to have your interaction on this post. And thank you for bringing up Mandeville; it gives me a reason to link to this blog post of mine.
Apr '11
Re: What Barack Obama Knows about the Economy
What Barack Obama Knows about the Economy
#shortestpostseverwritten
(Apologies to James Taranto)
May '11
Re: What Barack Obama Knows about the Economy
Pejman,
I agree that Obama's understanding of technical economics is lacking. Even on a Keynesian basis, his remedies make no sense. Shoring up government employee pensions doesn't put money into the economy in any sense. Suspending a boatload of regulations and using money on immediate infrastructure construction regardless of deficits, maybe even giving a tax cut, that's how Lord Keynes would roll.
But that's not the most damning thing. The ultimate failure is moral: equating justice with political will.
The Left is working on two levels. In political action, they generally want to focus on technical issues (e.g., swamping the political process with a 2000 page bill that no one has read), because that distracts from political assumptions that are still unpopular (wealth and property are most legitimately considered held in common by all the people and "managed" by the state).
Meanwhile, in the culture, in arts, entertainment, and education, they want to shift the underlying moral frame in which we view the world. How many history (or "social science") teachers communicate to children the principles that animated the nation's founding, that Lincoln gave voice to and explicated?
Re: What Barack Obama Knows about the Economy
badodonuts: The core problem is that we have a bunch of people in power who don't bother to read Plato's Apology, and therefore don't believe that they might be the people Socrates was charged with correcting--those who know nothing but are under the impression that they know everything.
Edited on September 23, 2012 at 12:35am