In the past sixteen months, Mr. Obama’s immediate, short-term political need has produced a lot of public policy that positions the President to appear as though he’s rescuing people – rescuing them from the economic downturn, from “greedy bankers” and “rich executives,” from the threat of home foreclosure, from credit card debt, and so forth. And part of the political calculus involved with this kind of policy is the assumption that as long as the President gives away enough “things” to the American electorate, and appears as though he’s doing enough to “protect” them, the electorate will continue to vote for him and his party, regardless of what the economy does. This is a big gamble, to be sure, but we don’t know yet if the President’s approach will produce either political or economic success (he could up with both, neither, or one without the other).
Yet, another important truth in the midst of the murkiness is that far too much of this type of economic policy is built upon the “false assumption of government goodness.” The “false assumption of government goodness” stipulates that greed, scandal, and injustice only happen in the private sector economy at the hands of “rich people,” while those in the public sector – elected politicians and bureaucrats alike – always “do the right thing,” always manage economic resources to their best possible ends, and always act selflessly in the interests of the common good.
Thus, it is presumed, everything that President Obama seeks to do with our nation’s economic resources is for the good of everybody, done out of the benevolence of his heart. A government take-over of General Motors and Chrysler? That was done only for the sake of “saving American jobs,” right? Except that the President violated U.S. bankruptcy laws with the ways in which his Administration forced Chrysler’s secured creditors to accept pennies on the dollar as a bankruptcy “settlement” (among the secured creditors were a retirement fund for school teachers and police officers in the “red state” of Indiana), and our tax dollars are continuing to subsidize both companies even when they’re not selling adequate numbers of cars to make ends meet.
But yes, Obama “saved American jobs.” In particular he “saved” jobs occupied by members of the United Auto Workers Union, a major political supporter of President Obama and the Democratic Party. Indeed the assumption of “government goodness” is clearly false with the “government motors” scenario.
And nationalized healthcare was all about Obama blessing us with goodness, right? Well, Obamacare is so good that over half the states in our union are suing the federal government to prevent the implementation of the President’s “plan,” and nearly 70% of the American electorate now wants it repealed.
It probably doesn’t even cross Christina Romer’s mind (or Barack Obama’s, for that matter) that the constant extension of federal unemployment benefits (that have now been “extended” in some states for over two years), the likes of which she was advocating in Paris last week, might actually be giving people a dis-incentive to get back to work. But that leads us back to “truth number one,” which I’ll state here in a slightly different way: good politics does not always amount to good economic policy.
May America elect to “stop the stimulus” – before it kills us all.
Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.