Have you noticed that economic data seems to almost always be reported as a surprise these days? As bad news emerges, it’s being portrayed as though nobody could have possibly seen it coming!
Michael Barone, the esteemed editorialist and resident fellow at the American Enterprise Institute, along with the “Instapundit” blogger Glenn Reynolds, have both noted that the word “unexpectedly” has often accompanied media descriptions of our economy as of late. Sentences like "Previously owned home sales unexpectedly fall," and "New U.S. claims for unemployment benefits unexpectedly climbed," are pretty standard stuff right now, as President Obama ramps-up his re-election bid.
Barone pointed out that to some degree, this is symptomatic of the political bias of many journalists. “It's obviously going to be hard to achieve the unacknowledged goal of many mainstream journalists -- the president's re-election -- if the economic slump continues” he wrote late last month. “So they characterize economic setbacks as unexpected, with the implication that there's still every reason to believe that, in Herbert Hoover's phrase, prosperity is just around the corner.”
But Barone also noted that many media professionals really believe President Obama’s economic policies – massive government regulation of business, and lots and lots of deficit spending – are actually conducive to economic growth. “A less cynical explanation,” Barone noted about the surprised reporters, “is that many journalists really believe that the Obama administration's policies are likely to improve the economy. Certainly that has been the expectation as well as the hope of administration policymakers.”
I think that Barone is correct on both accounts. But I also believe that journalists and members of the Obama Administration are not the only people who are surprised. Lots of “Obama faithful,” who were quick to embrace his economic rhetoric as the 2008 crisis unfolded, are now genuinely shocked that things haven’t worked out.
President Obama, of course, ran a successful campaign by portraying himself as the “un-George W. Bush” candidate. While painting his actual opponent John McCain as a “carbon copy” of Bush back in 2008, Mr. Obama was able to rhetorically juxtapose his policies on just about everything – economic matters included – with President Bush’s policies, and a majority of voters went with the guy who was offering “change.”
The flawed assumption that many of our fellow Americans made – an assumption that many are still making today – is that President Obama’s policies must be good, because they’re different from those of his predecessor. This assumption not only entails a lack of knowledge of both Presidents, but it also entails some horribly wrong-headed assumptions about economics, itself.
Stop and ask some of the Obama die-hard’s. You’ll find many of them still juxtaposing Bush with Obama, and their conclusion is simple: “Obama good, Bush bad.” And from this they often try to derive thoughts on economic policy, which frequently end up looking something like “government good, business bad.”
Think about it. It’s a fairly common belief that “under Bush the economy was un-regulated, and that’s how out-of-control business people drove us over the cliff. But now that it’s regulated, things can only get better.” President Obama still reiterates this theme, in a variety of different ways.
Of course, the idea that our economy is, or was “un-regulated,” is utter nonsense. The electronic device with which you’re reading this – a computer, “electronic tablet,” iPhone, whatever –was designed, assembled, transported, and sold under heavy U.S. government regulation, and it’s powered with electricity that was generated under heavy regulation. The same would have been true had you read one of my columns back during the eight years of the Bush presidency, as well.
As for the mortgage lending meltdown – well indeed, bad government was a big part of that problem. Yet it wasn’t a lack of government regulation that helped bring about the crisis, but rather it was too much of the wrong type of government regulation that did the damage.
For years the feds sought to make it increasingly easy to buy real estate, all in the name of the “affordable housing” agenda. Flawed as his presidency was, George W. Bush actually tried at least twice to reign-in the out-of-control lending, only to be shot-down by both Democrats and Republicans in the Congress (a fact I documented succinctly in my latest book – see below).
Selfish and destructive as the easy lending policies were in the long run, the cheapening of the mortgage markets brought about so much short-term political gain for congressional members that they couldn’t bring themselves to say “no.” And in a similar way, President Obama is today acting-out his own self-serving agenda.
Bailouts and “waivers” go to companies that can be politically beneficial to Barack Obama. And while the President says he “saved the American automotive industry,” in reality he “saved” some unionized assembly jobs – which is good for his political base – while G.M. remains fiscally unsound and continues to lose money.
Hopefully the President’s loyalists will soon realize that government is not always good. It can’t happen too soon.