Obama Agonistes: Spending, Debt And Deficits

NOGA_001(edit1)By George Noga


Economically President Obama is a gross ignoramus – that’s 144 times worse than a run-of-the-mill ignoramus. In fairness, he is far from alone as much of the political and chattering classes share his obliviousness. However, Obama’s solipsism and narcissism shield him from his economic illiteracy and buttress him with delusions of adequacy.

“Obama’s solipsism and narcissism shield him from his economic illiteracy and give him delusions of adequacy.”

Milton Friedman once was told by a foreign government official that workers building a canal were using shovels instead of excavating equipment “to create more jobs”. Friedman’s classic retort was “Then why not use spoons instead of shovels?” Most who hear this story viscerally comprehend the foolishness of the government official – except Mr. Obama. Recently, he said something every bit as wacky as saving jobs by using shovels instead of bulldozers.

obama-economy-SJ-plusObama linked technology to job losses; his actual quote is: “A lot of businesses have learned to become much more efficient with a lot fewer workers. . . . when you go to a bank and use an ATM machine you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.” Even students in Economics 101 recognize ATMs and kiosks as progress, as greater productivity, as the sine qua non of a higher standard of living and as an unalloyed blessing. Indeed, becoming more efficient, doing more with less, produces the cornucopia of goods and services that makes America the envy of the planet. That our president misunderstands this is pitiable; if it were George W. Bush, he would have been labeled a dolt.

The Issue of Fairness and the Debt Crisis

Our president also is wont to portray the spending and deficit issue as one of fairness. He cynically juxtaposes school lunch programs with corporate jet usage; food stamps with taxes on oil and gas companies; and corporate tax deductions with pushing grandma over the cliff. Obama is right; there are fairness issues all right – just not the ones he demagogues so well.

“Our children are being sacrificed on the altar of the Obama reelection campaign and for a failed socialist chimera.”

Firstoff, we are not being fair to our children and grandchildren. Is it fair to give more largess to today’s electorate at the expense of future generations? In essence Obama is favoring current social spending over the future of our progeny. Our kids are being sacrificed on the altar of the Obama reelection campaign and a failed socialist, redistributive ideology.

Second, it is unfair to ordinary Americans who have saved and who hope to retire. Folks who have acted prudently and invested their entire lives are being savaged. There has been little or no economic growth or new jobs in the past decade. Housing is underwater and the stock market is where it was in 1999. Yields are kept artificially low by the Fed because of the massive government debt. The dollar is plunging and inflation is building. An existential crisis triggered by default on US sovereign debt looms just over the horizon. Sensible investors can no longer regard US government bonds as completely safe. People will have to work much longer (perhaps 10 years longer) to fund retirement. This is our future; this is the new normal.

Third, it is unfair and dangerous to all Americans who value freedom and independence. Our economy is our greatest source of strength for national defense. We are needlessly placing our liberty at risk by destroying our most potent deterrent to tyrants and opportunists.

Finally, Obama is being unfair to the very people he passionately asserts he wants to protect, i.e. the downtrodden. He claims his spending binge is for social welfare and health care. Yet, he is condemning the current and future underclass to a much more hardscrabble life. America’s GDP growth will slow to European levels and over time the poorer among us will be infinitely worse off than they would have been with higher economic growth. Of course by then few will care or remember – no less understand, who was responsible.

The Difference Between Wealth and Poverty is Only 1%

Early in the nineteenth century the per capita GDP of Mexico and the US were the same. Fast forward to today and compare the wealth of Americans with the poverty of Mexicans. What brought about such a chasm? Answer: the US economy has grown 1% per year more than Mexico’s. How about a recent example? In 1990 the US and Europe diverged economically as Europe veered sharply toward redistributive policies. From 1990 to 2006 the US economy grew 1% per year more than Europe; as a result US per capita income increased 25% vis-à-vis Europe.

In just 16 years of 1% higher growth, the average American (including the poor) became an additional 25% better off than the average European. In many metrics the average American in poverty is better off than the average European – not just the average European in poverty. Europe is sclerotic; its people don’t care enough about the future to reproduce; and they refuse to defend themselves. Europe is saddled with chronic slow growth and high unemployment. Their medical care has worse outcomes and is rationed. Name the last invention, miracle drug or technological breakthrough that originated in Europe. They look to America even for their pop culture. There is little social mobility and many lead lives of quiet desperation.

“Obama’s behavior is wholly consistent with that of a
solipsist and narcissist – preoccupied only with self
and egotistically self-absorbed.”

Obama Agonistes’ slavish ideological dogma and economic illiteracy are leading us all into a netherworld. The president’s people gleefully depict political adversaries throwing grandma over a cliff. Obama is throwing all of us (including his own supporters) over the cliff. And for what, a failed socialist chimera? This is wholly consistent with the behavior of a solipsist and a narcissist who believes only the self exists, who is preoccupied with only his feelings and who is egotistically self-absorbed.

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