Same Scheme, Different Speech
By Leslie Carbone | Thursday, September 8th, 2011 | Catch-All, Culture, Policy, PoliticsRaising specters straight out of the Bleeding Heart Anthology of Horror Tales–like people actually delaying retirement to send their kids to college–a graying President Barack Obama tonight touted his latest tax-and-spend-our-way-back-to-prosperity scheme, which he repeatedly urged Congress to pass “right away” now that he’s back from Martha’s Vineyard.
It won’t work. It can’t work. It’s the opposite of what works, because tax-and-spend schemes take resources out of the market economy, where they could be used more efficiently, and filter them through the grasping hands of government and off to projects that aren’t subject to the accountability of the market-place. If you doubt that, please review the results of the President’s last “stimulus” plan, the one with all the shovel-ready jobs that weren’t as shovel-ready as he’d said.
Government cannot and does not create prosperity. People create prosperity, by producing things of value and exchanging them in the free market for things of greater value to them.
What government can do is what government should do: secure those people’s rights, specifically the right to property and the right to contract. And–even more important–stop violating those rights. In other words, end wealth-redistributing fiscal schemes and meddlesome regulations.
If it did that “right away”, the American horror story of The Leviathan that Strangled Prosperity would have a different ending.
UPDATE: My SamSphere colleagues weigh in on the scheme as well:
Obama’s “jobs” speech: second verse, same as the first
Congress Should Not Pass the American Jobs Act[;] it Should Just Pass
Live Tweeting Obama’s Jobs Speech: More Big[-]Government Boondoggles
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About the author
Leslie Carbone is the author of "Slaying Leviathan: The Moral Case for Tax Reform" (Potomac, 2009). Her writing has appeared in magazines including "The Weekly Standard" and "The American Enterprise", in newspapers from "The Philadelphia Inquirer" to "The San Francisco Chronicle", and on Web sites like "BreakPoint" and "National Review Online". She has appeared on more than 200 radio and television talk shows, been quoted in national newspapers including "The Wall Street Journal" and "USA Today", and spoken at venues across the United States from Tea Parties to college campuses, including Northwestern University, UCLA, and Cornell University. Ms. Carbone has served as Chief-of-Staff to the late Assemblyman Gil Ferguson of California, Executive Director of Accuracy In Academia, Director of Family Tax Policy at Family Research Council, Senior Writer at Koch Industries, Inc., and Speechwriter for former Secretary of Labor of the United States Elaine L. Chao.
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28 Responses to "Same Scheme, Different Speech"
How was it a different speech?
The government aiding veterans in getting jobs may sound good to some people, but this veteran doesn’t need the government to get me a job, that is my responsibility and I am offended that so many people think that I can’t handle it on my own.
JZ,
Thank you for your service and welcome home. And a special thank you being offended that somehow veterans need special treatment. That is a stereotype characterization that liberals use to expand the population of their victimhood protected class; lumping productive and patriotic members of society with the trans-generational welfare leeches, chronic substance abusers, and illegal aliens. Veterans deserve the benefits that they have earned, not charity, pity, or hand-outs.
BTW, which was more exciting Thursday night, Obama’s job(s) speech or the Saints at Green Bay?
Sad, isn’t it?
The best critique of last night’s speech comes from the WAPO???? I suppose even a blind squirrel finds an acorn some time. The quiz at the end will leave you rolling on the floor laughing.
http://www.washingtonpost.com/blogs/fact-checker/post/obamas-jobs-speech-deja-vu-all-over-again/2011/09/08/gIQA9amvDK_blog.html#pagebreak
It was nothing more than warmed over “Son of Stimulus”
Speech reminded me of the story about the Drunk Swedish Moose Found Stuck in Tree. Barry seems to be losing it.
Watched Frank Luntz do a focus group discussion from Atlanta. That was really sad. If you were a democrat. Looks like Barry will keep losing support. At this rate will soon only have his core supporters left, ABC, CBS, NBC, CNN, WAPO, GE, and rich billionaires.
Wall Street seems to be giving a thumbs down on the address, assuming that they weren’t long in New Orleans Saints futures. The Dow is down over 300 points at noon and falling.
If Wall Street can actually be surprised and disappointed in Obama’s maunderings at this point, they are really out to lunch.
Most Of Western Europe On The Brink Of Bank Collapse!
Google that. Perhaps that is what is going on.
Leslie,
If this is your central hypothesis, you’ve got to go back and re-work it:
“It’s the opposite of what works, because tax-and-spend schemes take resources out of the market economy, where they could be used more efficiently, and filter them through the grasping hands of government and off to projects that aren’t subject to the accountability of the market-place.”
1. President Obama’s policies aren’t tax and spend, he’s spending without taxing, ie: continuing the Bush policies. Not to mention, the companies that operate in the United States are sitting on large quantities of cash and not spending them in the economy.
2. He’s not taking resources out of the domestic market economy, by borrowing money, the Federal government is artificially lowering the interest rates that individuals and businesses can borrow making it easier to access capital.
Focusing on the Jobs Act context, I disagree with the author that this was a “tax and spend” liberal liturgy.
I did identify in the speech tax incentives, tax credits, (tax cuts) for small business based on hiring practices. Excluding large corporations, small businesses get tax cuts for new hiring and wage increases. A tax cut to small business employers or 50%. Extending credits on equipment capital investment. Now the question is to define “small business”. Is it Representative Cantor’s of 500 employees or less, or is it President Obama’s of a payroll of 5 million or less?
“it’s a balanced plan that would reduce the deficit … by reforming our tax code in a way that asks the wealthiest Americans and biggest corporations to pay their fair share.”
Wally, small business doesn’t hire because of “tax incentives, tax credits, (tax cuts)” or “wage increases”… they hire because of growth. Fewer people buying stuff, no growth, no jobs.
Tim J: hmmmmm…… I thought more jobs, more disposable income to buy stuff, then comes growth. Seems that what the greater percentage of economists believe.
Wally… Doing more of the same and expecting a different outcome?
more jobs, more disposable income to buy stuff (made in China),then comes growth (in China). The US is no longer a manufacturing economy, it is now a debt and consumer economy. In other words, we are eating our seed corn.
Increasing spending on infrastructure might be the best idea. Tightly focused. Barry will want to “invest” in unicorn farms. Spend on roads and bridges only for a start. Switch money from other programs to pay for it.
Near term and long term require different applications. We are not in a position to delay for far reaching economic repartee to kick in. We require a catalyst to spur the GDP and substantiate the dollar’s (USD) credibility as the world’s reserve and common media of global exchange. These are not normal times, and waiting for long range solutions are futile unless we solve the immediate economic calamity.
How do you “spur the GDP and substantiate the dollar’s (USD) credibility as the world’s reserve and common media of global exchange” with printing presses and speeches?
“These are not normal times, and waiting for long range solutions are futile unless we solve the immediate economic calamity.”
Did Barry lose another trillion dollars at the casinos in Las Vegas ??
The brilliant government economists say we are in a mild recovery. Considering that the feds, politicos, and greedy Wall Street democrats have wrecked both our banking system and the real estate market; one might consider that we are doing rather well.
If you want to see real economic calamity, watch Europe.
Reading James A. Bacon’s “Boomergeddon”. Have books that are very similar which are 30 to 40 years old. Trying to pick actual “crash” date is a problem for everyone.
Wally said: “hmmmmm…… I thought more jobs, more disposable income to buy stuff, then comes growth. Seems that what the greater percentage of economists believe.”
Absolutely incredible that you would say what most economists believe, and then cite it as something we should do. Things are going so great right now, aren’t they? Everything is working so great, isn’t it? Let’s do more of the same, that’ll fix it!
WHAT THE **** IS WRONG WITH YOU?
Most economists are Keynesians, and that is why the economy is in the tank.
The economy is not some engine that has stalled and needs a shot of starting ether. That view, though, is widely held by politicians, and so it is widely held by economists who live off of stipends from universities whose funding is dependent on…politicians.
Politicians love this engine analogy because when it is widely believed, as now, then they are encouraged to do what they do best: spend other people’s money to make themselves popular.
A society cannot spend its way to prosperity, and it cannot borrow its way to prosperity. A society can only work and produce its way to prosperity. Debt is always a net negative when it is used simply to consume and not to produce. If I accomplish anything here at BD it will be making one additional person understand the concept of “the marginal productivity of debt.”
Obviously, I have a long way to go.
Jamie Jacoby,
How about it you are going to quote someone you quote something they actually said instead of trying to make things up?
Jamie, maybe you should cut Wally some slack. He believes what the economists say just like some people believe Al Gore. They know with the utmost certainty what will happen in 10 years, but can not tell you what will happen next week. Dollar/Euro 1.30 ; lets see how I can do.
The rules of the economic game have changed a bit. Perhaps the economists should tell you how they are investing their own money.
A lawyer told me once “when in doubt, sit back, do nothing, and see what happens”. Might be good advice until you see how Europe is going to play out and sure that there will be lessons to be learned.
Have money that you want to invest??
Do NOT buy Greek bonds. Pay off your outstanding credit card debts, car loans, or home mortgages. If you wish “to live free or die” then you do not want any debts.
LD,
Genuine, long-term job creation requires wealth creation to sustain it. Wealth creation only comes through production.
Jobs cannot be sustainably created with borrowed money, if the borrowed money is simply used for consumption. Why not? For one reason, most of our consumption spending is used to buy stuff made in China, so when we borrow money from the Chinese to “create” jobs the newly-hired people use their money to buy Chinese stuff, spurring wealth-creating productive economic activity in…China. Plus, then we owe interest to the Chinese, siphoning off money to make interest payments. Here in the U.S., as soon as the deficit-spending stops, the jobs die. They were never real jobs to start with, just phony-baloney government make-work jobs.
Why is that so damned hard for some people to understand? YOU CANNOT CONSUME MORE THAN YOU PRODUCE, UNLESS YOU BORROW IT OR STEAL IT. SIMPLE ARITHMETIC.
Why is no one talking about this? Because simpletons can’t add.
Mr. Jacoby’s purist laissez-faire concepts may be valid in a pure theoretical capitalist society, but ever since our nation’s beginning, governmental intervention has been effectively used. Long before Keynes published his theorems on mixed economy(circa 1930′s), Alexander Hamilton purported government intervention as did his successor Henry Clay. All things being equal, in times of recession, depression, war, and post-war economic expansion (notably the Civil War and World War 2) the U.S. has used intervention in the form of Acts and temporary regulations to correct curves skewed by the economic environment.
I don’t believe you can stereotype an economist that purports government intervention during economic anomalies a “Keynesian”.
Governmental economic intervention is not without risk and careful mitigation must be anticipated.
I do agree that the funding for such iterations play an important aspect; however, corrective intervention versus funding mechanisms are two separate subjects.
There are those who point to both the failures and success’ of recent economic stimulus. Never the less, the burden of success or failure is incumbent upon the individual state or commonwealth that was the recipient and tasked to apply those funds.
Hamilton was a New York banker and spoke for their interests. His exploits in this regard are well documented, for example by Thomas DiLorenzo in his book “Hamilton’s Curse.”
From a recent article by DiLorenzo:
“The great debate between Hamilton and Jefferson over the purpose of government, which animates American politics to this day, was very much about economic policy. Hamilton was a compulsive statist who wanted to bring the corrupt British mercantilist system – the very system the American Revolution was fought to escape from – to America. He fought fiercely for his program of corporate welfare, protectionist tariffs, public debt, pervasive taxation, and a central bank run by politicians and their appointees out of the nation’s capital.”
“Jefferson and his followers opposed him every step of the way because they understood that Hamilton’s agenda was totally destructive of liberty. And unlike Hamilton, they took Adam Smith’s warnings against economic interventionism seriously.”
Nearly everything that is wrong with the economy today is a result of government intervention. Interventions thwart price signals; price signals are the lifeblood of any productive economy.
When assets are subjected to interventions (price supports), the market does not know how to use them and they sit idle.
When capital is subjected to interventions (artificially controlled interest rates), it is misallocated and often destroyed.
When products are subjected to interventions (energy, for example), dependencies are extended and exacerbated, guaranteeing the next crisis will be worse.
When labor is subjected to interventions (99 weeks of unemployment, for example) it is mispriced and cannot be put back into play.
When companies are subjected to interventions, all manner of depredations ensue. Artificial support for failed banks results in the continuation of the policies that caused the failures. Smashing companies, casting aside centuries of bankruptcy precedent and handing assets over the political cronies results in capital going into hiding.
All of these things can plainly be seen in today’s America. Unemployment is stubbornly high. Trillions in capital sits idly on the sidelines out of fear.
Yes, let’s intervene some more, it’s going so well. Your track record speaks for itself. If only you can find the right knobs to twiddle then everything will be OK. Or not. All you will do is cause more distortions. All you will do is make it worse. It has to stop. YOU have to stop.
What record? What tweaking? I have an opinion based upon the economic actions that have been pursued in this country for over 200 years. Alternately, your purist concepts have not been fully employed and theoretical without proving the desired result.
Alternately, for most of the last century, the US Dollar has been the world’s standard medium of exchange. This has been an enormous boon to the US economy, especially in the last 30 years of trade deficits. No other country in the world would be able to get away with importing more than they export, year after year. The reason that we are able to do this is that other countries use the US Dollar as a medium for trade, so that stockpiling dollars and dollar-valued assets is seen as a safe haven.
Unfortunately, China, the biggest foreign holder of dollars and the nation with the largest US trade imbalance, has expressed doubts about the long-term value in its huge US holdings.
China’s goal of reforming the international monetary system is to create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run.
If we are unable to spur the GDP in the near term, the proverbial crapola will hit the fan. The time line for theoretical purist approaches fall short of acceptable resolve.
The dollar’s status as reserve currency was one we inherited from the Brits, as their economy, and all the major economies of the world save ours, was destroyed by WWII. It didn’t take us long to begin abusing the privilege. As you correctly point out, we have been able to trade real goods for inflated dollars. The world is now on to our game, and now a global monetary implosion is required to get some capital to “run home to momma” in U.S. Treasuries. Old habits die hard, but die they shall. Gold is now the de facto safe haven, currently alongside the dollar but soon to stand alone; it has risen to new records against Euro and Swiss Franc. The dollar strength resulting from the new rush on Treasuries will further weaken U.S. exports, and the world no longer wants to be paid back in printed dollars. End Game.
There are several $Trillion in capital that has gone into hiding. A massive and determined deregulation, coupled with a massive tax cut on both capital and labor, would spur economic activity and encourage capital to be deployed here in a productive manner. Merely borrowing more money to buy Chinese goods will do nothing to spur economic activity in America, other than tinging up retail sales. No jobs will be sustainably created.
Keynes was a disaster.
The crapola has already hit the fan. You just don’t see it. It has simply hit it behind closed doors. The catastrophe is real, but invisible, hidden safely behind a mailbox / food stamp card.
People need jobs, not food stamps. But they need jobs that will be there long term, not merely until the federal money runs out.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2011/09/Obama.jpg
Somehow I don’t think this is the way it’s supposed to work.
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