Advice for Obama
Advice for Obama from Matt Welch and Nick Gillespie at Reason:
We could add here a string of broken promises and dashed hopes on closing Guantanamo, reversing discrimination against gays, and paring back our overseas military commitments, but the headline story of your presidency is about one crucial thing: economic policy and results. With the grime of governance having replaced the gauze of campaigning, the country has now been able to focus on something that wasn’t quite as clear in November 2008: That when it comes to basic economic orientation, the main “change” in this presidency is a reversion to the pre-Bill Clinton days of Keynesian faith in centralized planning by technocratic experts in the name of empathizing with the downtrodden. It didn’t work then, and it isn’t working now.
You want to win back the faith that most voting Americans placed in you 14 months ago? Start by taking your own promises seriously, rather than treating them as short-term fixes for your long-term drop in popularity. Continue by taking the American people seriously, by acknowledging that their differences of opinion with you on economic policy spring from a genuine place. And finish by doing something no president since Bill Clinton has even tried: Scale back ambitions. Pay as you go. Limit the growth of government.
A thousand central planners before you have learned it the hard way: Prosperity isn’t something the government creates, it’s something the government, in the best case, can enable, mostly by establishing a set of simple rules and getting the hell out of the way.
There isn’t anything there that hasn’t been said here a hundred times already but Welch and Gillespie say it more eloquently though so give it a read. Obama understands what needs to be done for the economy, he just can’t bring himself to do it because he thinks it will cost him re-election. I think the opposite; the majority in this country are exactly where Obama should be - fiscally conservative and socially liberal (or more accurately libertarian). He risks being a one termer by continuing to let Reid and Pelosi make economic policy.
- February 1st
Wanninski –He needs to understand that the electorate is feeling the burden of the government. Yes some actions may be justifiable, social safety nets etc but the sum total is becoming onerous. He would have a much more welcoming reception to his “new” agenda items if he would first eliminate something. The added tax reflected in the progressive income tax structure and in prices across the board, govt pork, redundant and worthless programs. Everything he comes to the table with seems like “the straw that will break the camels back.” If he looked, as Wanninski suggests, at the margin, it is the sum total of all the govt profligate spending not just 1 agenda item. The public is burdened, remove some straws before adding just 1 more.
As Milton Friedman said, the true burden of government is the level of spending not the level of taxation. That’s a clever way of restating Ricardian equivalence but true just the same. The spending has to be paid for eventually and people aren’t as stupid as politicians think they are.
For those of you who don’t get the Wanniski reference by Doug, he’s referring to Jude Wanniski who was insturmental in forming the core of the supply side movement in the late70s. He was not an economist but learned classic theory from Art Laffer and Robert Mundell. Wanniski wrote about the ideas behind supply side economics as the editorial page editor of the WSJ. He later ran an economic advisory called Polyconomics which counted Alan Reynolds and Michael Darda as past chief economists.
Jude always emphasized the effects of policy at the margin. You determine the macro effect of a policy by recognizing the micro effect. Jude titled his commentaries Memos on the Margin. Here’s a link to the Polyconomics site which is basically an archive and tribute site to Jude: http://polyconomics.com/main.html