Obama’s Budget

February 27, 2009

“Where goods do not cross frontiers, armies will.”  –Frederic Bastiat (1801-50)

 

“You’re using a hatchet when you need a scalpel.” –Barack Obama to John McCain at the first presidential debate in 2008.

 

Obama’s outlandish budget shows distrust in the free market to right the economy, and a willingness to blame that same free market for the current economic woes. But it was not the free market that caused this trouble, but rather affirmative action finance, the latest chapter of which goes back to Bill Clinton and to George W. Bush. This type of finance, which rejects market forces as the most stable rudder for an economy, now finds its ferocious apotheosis in our new president. Furthermore, Obama is using this financial crisis to institute a broad new social policy in America, one that is European in inclination and that diminishes seriously the self-reliance that is the hallmark of the American personality. Obama is promulgating a welfare state and, as Emmett Tyrrell put it recently, he is nationalizing the economy.

We are penny-wise but pound-foolish when we tinker with the market on behalf of social justice theories, and accomplish nothing so much as strangling the goose that lays the golden egg, competition. These socialism-style remedies are an attempt to extinguish the current fire with gasoline, and will only further aggravate a trying situation. It’s evident that President Obama and Speaker Pelosi have an emotional investment in these same social justice theories, and consequently they are dissociated from the real-world consequences of what they do.

There is an idea among those on the left that capitalism impoverishes those on the bottom of the social scale. This idea advances the proposition that the poor would not have been poor had capitalism never been. But this is false. Capitalism creates wealth for all, and there is no viable alternative, anyway. That is, Marxism, the pretender to the throne, is incapable of creating any wealth whatsoever, since it does not allow competition — all industry is state-owned in a fully Marxist state, and thus we have the abolition of competition. The poor of this world are not poor because of too much capitalism, but because of too much social engineering. If they are ever to attain wealth, it will be because free market competition came within their borders. Cancel their debts? Fine with me, in some cases, if it brings more competitors into the market.

Obama’s budget evinces a bias against free market capitalism and a prejudice in favor of human intervention in economic affairs. This is a misguided approach, however. Friedrich Hayek demonstrated long ago the impossibility of theory duplicating the compexities of a spontaneous marketplace, but Obama wasn’t listening. We are being taken for a ride that has no destination but crack-up, and Obama’s blaming “deregulation” and “the failed policies of the last eight years” for the economic problems we face is obfuscatory.

 

Tony Downing