Obama really does believe Americans are idiots

I've always found President Obama to be arrogant and condescending. Watch any speech he gives and he is always pointing and lecturing as if he knows all. My opinion of his attitude was reinforced when I read this quote of his given at a recent fundraiser:

"And so part of the reason that our [Democrat] politics seems so tough right now, and facts and science and argument does not seem to be winning the day all the time, is because we're hard-wired not to always think clearly when we are scared." (emphasis mine)

We are in an anti-Democratic mood because of

"having gone through this trauma."

So, what our dear leader is telling us is that those who oppose his policies are just scared, and scared people don't think straight. What other reason could there be for America to reject his wise and grand vision? Can you say 'arrogant and condescending'? I thought you could. Actually, the President may be on to something. I do believe that people are scared. We're scared that his health care monstrosity is going to swallow up the medical field and reduce quality and quantity. We're scared that his grand spending programs are going to bankrupt the country, turning us into Greece. We're scared that his support of public sector unions and the European style corporate state is going to turn us into France. In short, were scared that his policies are going to make us all worse off. Unlike our President, however, I don't think being 'scared' is making us think less clearly. Instead, I think we are starting to think more clearly. More people are seeing the destruction caused by Washington, by both Democrats and Republicans. We still have a ways to go, however. Too many people are still swayed by politicians who claim they can 'fix' things. Government cannot 'fix' things, it typically makes things worse. The Founders had the right idea in creating a government with a limited set of powers. They saw first hand the destruction of freedom that government power causes. I believe we are starting to learn what the Founders knew. What this country needs are representatives (I refuse to call them 'leaders') who understand that government is force, and as such it should only be applied in very specific circumstances. We don't need a bunch of technocrats in office who believe they can harness the power of government to do their definition of 'good'. Instead, we need representatives who recognize that the true power that drives this country is freedom, not government command and control. A free society has no place for arrogant technocrats like our President and most members of Congress. Time to vote them all out. Then maybe we can all be less scared.

Stimulate Consumer Spending? Why?

In an excellent article in the Sacramento Bee, Robert Higgs discusses some interesting facts about spending in the economy. We are told by politicians that we need to stimulate consumer spending so the economy can get back on track. Yet, according to data presented by Higgs, consumer spending during the downturn actually increased and is currently at 71% of GDP. However, investment spending fell some 36% from a peak in 2006 and has yet to recover. From the article:

When private domestic investment last peaked, in the first quarter (January-March) of 2006, it was nearly $2.3 trillion (in dollars of 2005 purchasing power), or 17.5 percent of GDP. When it hit bottom in the second quarter of 2009, it had fallen by 36 percent to $1.45 trillion, or 11.3 percent of GDP. It is still far below the 2006 peak. By contrast, in the second quarter of this year, personal consumption was actually at an all-time high, at nearly $9.3 trillion (in 2005 inflation-adjusted dollars). If stimulating consumption were the key to an economic recovery, we would have achieved one already.

Investment is crucial to growing an economy and it is lagging. Consumer spending, while important, is already at an all-time high. But what do our brilliant solons keep pushing? More consumer stimulus. What else are they pushing? Higher taxes on investment. At the same time they wonder why the economy isn't performing better. It's far past the time to send these idiots packing.

Stimulus?

Regardless of whether or not you believe that an economy can be 'stimulated' by government spending, it would seem that if you are trying to get out of a recession, you would spend the stimulus money now, not later. However, according to the Congressional Budget Office, of the $787 billion appropriated in the final bill, $236 billion won't be spent until 2011. That's 41% of this monster. If the true nature of this bill was to stimulate the economy, $236 billion could have been cut and still provided the necessary stimulus. The truth is that this bill is a sham and will burden current and future generations with a mountain of debt. George Bush and Congress (both parties) took 8 years to dig a deep deficit hole, it has only taken Obama and Congressional Democrats days to dig a deeper one.

I Fear for the Future

On the front page of The Ann Arbor News today there was a little box with a letter to incoming President Obama. In part the letter said:

[...]I think you deserve to be the president because you are going to do smart and good stuff, like give poor people homes and a life.

Granted this letter was from an 8 year old, but this thinking of the President as some sort of Superman is pretty pervasive, and to some degree represents the type of thinking taught in our schools today. I've seen similar comments from adults as well, which is also pretty scary. I really hope that Obama does well as President, but based on concepts and policies coming out during the transition I can't say that I'm very hopeful. Couple many bad ideas with a Congress that is even worse and I fear that a return of the Carter era 70's is quite likely, and possibly something much worse.

Wishonomics

It's really disappointing that the McCain campaign isn't doing a better job exposing Obama's economic plans for the sham that they are. They should be pointing out wherever they can that raising taxes, particularly during an economic slowdown, is a recipe for failure. Spending money you don't have compounds the problem. I call this 'wishonomics' because you have to wish that economic realities don't exist in order to believe it will work.

Obama wants to raise taxes on dividends and capital gains. History has shown that when you raise these taxes you get less revenue. Obama knows this, but is on record as saying he doesn't care. He will do this to impose his notion of 'fairness'. Raising taxes on investment will result in less investment, or misallocated investment. Instead of investing in higher risk, perhaps a new business or idea, investors will stick with safer investments. Capital which has gains, will stay locked up as people avoid paying the higher tax rate in the hopes that down the road saner heads will prevail. The net effect of raising taxes on dividends and capital gains is to reduce revenue to the government at a time when it will certainly be needed, and to reduce investment in productive economic activity, again, at a time when we desperately need it.

Obama also wants to raise taxes on people earning over $250,000. IRS data shows that the majority of individual filers who report income over $250,000 are actually people who own businesses and are reporting business income on their personal return. Raising rates effectively reduces the amount of money that these business owners can use to invest in making their business grow. Small businesses are the largest employers and hurting them seems counter productive. People who cheer the idea of making the rich 'pay their fair share' should realize that they are simply shooting themselves in the foot. People like to mock 'trickle down' economics, but the simple fact is that if you hurt the ability of small businesses to grow, by reducing their access to operating capital, you will cause businesses to either fail or grow slowly or not at all.

In the face of a recession, where tax revenue will naturally decline, and with the almost certainty that his tax policies will futher reduce revenue, Obama then proposes spending even more money than Bush. Everywhere he appears, he is promising that he will have a refundable tax credit for this, that or the other thing. If these promises are kept, all that will be accomplished is an explosion of debt. I really fear that we are entering a period very similar to the 1930's. I don't think we will go into a deep depression, but I feel that the poor economics of our current president (playing the role of Herbert Hoover) will lead to the election and destructive policies of Obama (playing the role of FDR). I expect that there will be plenty of stupid laws passed and further restrictions of freedom that will take decades to repair.

Tax. Spend. Dictate.

Tax. Spend. Dictate. These three words completely summarize the economic policies of Barrack Obama.

On taxation, Obama believes that the 'rich' pay too little in taxes so his plan is to raise taxes on those earning more than $250,000. Why $250,000? I assume because he feels that the number of people earning more than that are in sufficiently small numbers that they won't affect his polling numbers. Obama also wants to increase taxes on dividends and capital gains, again playing to a myth that only the 'rich' will be hit by these taxes. Obama doesn't even care if these higher taxes will actually raise revenue, he wants to do it simply to fit his notion of 'fairness'. Of course he doesn't stop there. Obama also wants to change the way Social Security gets funded so that people earning over $250,000 will have to pay additional taxes over and above the wage cap. This completely eliminates the charade that Social Security is anything but a welfare program. Finally, as part of Obama's energy policy, he wants to tax the 'windfall' profits of oil companies. Of course, what defines 'windfall'? In Obama's world it must simply be a large dollar number earned by an unpopular industry, because on a profit as a percentage of sales, the oil industry is positively middle of the road. Again, in a zeal to appeal to populist instincts, Obama would prefer to do something harmful rather than being courageous and doing something sensible.

Other than increasing 'fairness', what does Obama plan to do with all this extra cash he hopes to raise? Why spend it, of course. Every day there is an article in the newspaper about how Obama is going to give $x billion dollars to support this, that or the other thing. If there is a problem, Obama's solution is to throw money at it. It doesn't matter if this is a good solution, it doesn't matter if the origin of the problem is government meddling, if you throw money at it, the problem will go away, right? It's worked so well in the past. Obama wants to be the national Santa Claus, handing out goodies paid for by people who work for a living while he takes the credit. None of this, of course, is the President's job, but that doesn't stop him from convincing an ignorant electorate that he should be elected because of his generosity.

Tax and spend are two big impediments to true liberty. Taxation takes money by force. Your labor isn't all yours, part of it is owned by the government. Government spending is taking decisions away from the people and replacing them with decisions made by the political class (which includes corporations and other influencial people) However, Obama isn't content with attacking your liberty through tax and spend, he also want to dictate how you live your lives. For example, as part of his energy policy, he wants to ban conventional light bulbs, forcing everyone to buy CFL's. I have no problem with CFL's, they have there place, but I certainly don't want to replace every light in my house with a high mercury device which is expensive, ugly and has a host of other problems. This doesn't matter to Obama, he and his technocrat advisors know what is best for you and me and therefore he will use his power (not really granted by the Constitution) to force us to live the way he wants us to live. Health care will be a similar thing. Obama wants to implement a medical insurance scheme which will continually force us to obey new government restrictions. I predict a host of new laws to promote a 'healthier' person so that we don't cost the government so much money in health care. Again, dictate it and it will be so!

Obama is campaigning on 'Change'. I don't see this as change, but more of an acceleration. We've had continual growth of government and continual reduction in liberties. Under Obama I would expect this trend to continue. Make no mistake, John McCain isn't much better, but at least he would be a Republican President presiding over a Democrat controlled Congress. Some gridlock is bound to happen. With Obama as President and a Democrat controlled Congress there is virtually no limit to the damage they could do to this country. Just look at what happened when Bush presided over a Republican Congress.