Team Obama, remember, reckons their "stimulus" package will have a "multiplier effect" on the US economy of 1.5; Barro reckons they've got their sums wrong. ("A much more plausible starting point is a multiplier of zero. In this case, the GDP is given, and a rise in government purchases requires an equal fall in the total of other parts of GDP -- consumption, investment and net exports. In other words, the social cost of one unit of additional government purchases is one.")
And, naturally, other economists are joining the fray, and Arnold Kling has summarised the differences between two proponents on either side of the debate, one who predicts that with every $100 of government spending we'll see $87 worth of benefits, and another who predicts we'll lose $80 (see Paul Walker's summary here), suggesting nothing so much, perhaps, as that there is nothing so pointless as expecting results from economists doing algrebra.
Fact is, a pump primed is a recovery delayed.
So it's more instructive not just to notice that there are Republicans who are now growing spines that were nowhere in evidence over the last eight years -- and certainly not over the last eight months while their own bosses set about nationalising the banking industry -- but to appreciate the analysis of those like Robert Tracinski who leave their algebra in their brief case, and engage instead in pure logic.
Obama, says Tracinski bluntly, has no idea what he's doing.
Obama begins his administration by declaring that he will run the governmentAs we've noted here before. And wasn't there another US president of similar mien? Oh yes, there was:
while rejecting any overarching ideas and principles regarding the proper role
and scope of government action. He starts by telling us, in effect, that he has
no idea what he is doing.
Decades ago, we had another president who came into power during an economicThe "stimulus" package is just further evidence that Obama really doesn't know what he's doing any more than Roosevelt ever did, and that the results of what he does try to do will be as destructive as his most natural historical predecessor. Evidence too that it's when politicians are most ignorant of what the hell they're doing that they reach most vigorously for the interventionist levers -- since to them that most represents "vigorous leadership."
crisis, who also had no idea what he was doing and engaged instead in "bold,
persistent experimentation"--with his only absolute being that he would not let
the free market work. That was FDR. The result? The economic crisis lasted
another decade and actually deepened under his leadership. If Obama's speech is
what a cipher sounds like, the Great Depression is the kind of result that is
produced when an ambitious cipher attempts to offer vigorous leadership.
As Tracinski points out in his TIA Daily newsletter, it's entirely logical then that Team Obama's first moves represents a systematic "leftist onslaught" against automobiles, power plants, banks, trade, guns, and the war on terrorism, since his reign offers nothing so much as the chance for the resurgence of the Old Left. Thus:
He is pushing for global warming regulations and for heavy new regulatory restriction on the financial industry—and he is now considering outright nationalization of the banks. He's threatening to reverse the trend toward free international trade, openly inviting Congress to impose new gun bans, and removing the US government from a war footing in its fight against terrorism.Let's take the main points of this onslaught in turn:
He's also doing a few things to reverse the agenda of the religious right—but on a small scale compared to his assault on the values held dear by those of us on the secular right: free markets and vigorous national defense.
Let's start with environmentalism. Despite speculation that the new president would shelve global warming regulations because of the economic crisis, he has put up on his new White House website a promise to "implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050."Consistent with this is his attack on automobiles, "ordering the EPA to allow California and a cabal of other states to impose new fuel-efficiency regulations on automakers, in the name of stopping global warming. The irony, of course, is that this is another devastating blow to the very same Detroit automakers that the Obama Administration has insisted on bailing out." (Be still: This won't be the only irony of this Administration.)
Since "renewable energy" will not be able to replace fossil fuels [remember the definition], that means roughly an 80% reduction in our energy use over the next four decades, which in turns means roughly an 80% reduction in our standard of living. It is a plan to make economic depression a permanent fact of life.
It continues. As Tracinski points out, Team Obama is consistent: they're against both the internal combustion engine and coal-fired power plants -- the two power sources of America's industrial power -- firing the first shot in this battle against coal and real energy in its sponsoring of the EPA's spiking of the 580 MWe Big Stone II coal power plant in South Dakota. (See here and here and here.)
And meanwhile, in the midst of financial disaster, he's looking to throttle the banking industry, and showing signs he wants to complete the nationalisation of banks begun under his immediate predecessor, back when Republican spines had atrophied from under-use.
And he's already fired the first shots against trade -- something every New Zealander needs to be concerned about. Says Tracinski:
The resurgence of the Old Left brings the revival of bad ideas by the dozen. So not only do we get a resurrection of nationalization and central planning; we also get a resurrection of protectionism.And on top of all this, he's moved against the Supreme Court's 2008 decision recognizing a constitutional right to own guns (despite his campaign statement approving of the ruling and pledging his loyalty to the Second Amendment), and with the closing down of the terrorist prisoner-of-war camp at Guantanamo Bay and the appointment of appeaser George Mitchell as Middle Eastern envoy, indicating that the US War Against Terrorists is effectively over.
Thus, President Obama's incoming Treasury secretary has indicated the new administration's willingness to start a trade war with China. That's just what we need to complete the current replay of the Great Depression: a new Smoot-Hawley tariff to shut down global trade.
This is what the resurgence of the left means: an attempt to make us forget all of the lessons that we learned, at great cost, during the economic disasters and cataclysmic wars of the 20th century.
So, yes, the Obamessiah is moving fast, but not quite so benevolently as some commentators might have been hoping for.