President-elect Barack Obama is faced with the daunting challenge of fulfilling his campaign promises – promises he actually made, along with those that voters think he made. Unfortunately, the latter category predominates. The new president didn’t actually say much on the campaign trail, but he said it well. He invited Americans to dream, actually to fantasize, about an unreal world in which their government will care for them using its own unlimited supply of money – money that comes from some mysterious place that too few people have even thought about, much less understand.
Voters are said to have turned to the left, to liberal candidates, in part out of a desire to change the economy’s direction. Their choices at the polls are said to reflect their concern over the economy’s descent into recession, loss of jobs, and the collapse of their retirement accounts. These are legitimate and understandable concerns. Unfortunately, voters have not done the hard work of learning about and understanding basic economics. As a result, they have set themselves up for their predicament to worsen exponentially.
I think it’s safe to say that we don’t really expect politicians to keep their campaign promises. We can only hope that the new president will conveniently forget to raise taxes on capital gains and dividends, raise the top income tax rates, impose a windfall profits tax on oil production, maintain or raise high corporate tax rates, collect more social security taxes, mandate higher ethanol production, expand regulation, and add new entitlements, just to recall a few of the proposals bandied about during his campaign. We can’t all ride in the wagon. Someone has to pull it.
The presumption seems to be that government has a big job to do in cleaning up this mess and it will need more money to do so. Wrong! Government is still the problem. Obama has promised to help the Blue Dogs (fiscally conservative House Democrats) achieve fiscal discipline, including honoring the pay-as-you-go (“PayGo”) rule against adding to the budget deficit. There are only two ways to do that... need I say more?
There are limits to how much tax you can extract from the populace before you are faced with open revolt. While Obama’s tax increases are ostensibly imposed on the rich, the pain of those tax increases will also be felt by the poor. Moreover, there is no way that straightforward taxation will be enough. Instead, we can count on more of the surreptitious, insidious, and brutally regressive tax of inflation to fill the gap.
This should have been a contest focused on the real, underlying issue facing Americans and the world: will we choose more or less government? Instead, the contest was over more government or much more government. It appears voters chose the latter. They know something is wrong, but like a drunk taking “a hair of the dog that bit you” to ease the pain of a hangover, Americans are hoping to cure their ills with another dose of the same poison that made them ill.
I have heard the new president described as a fall guy. In a way it’s too bad that he may mean well but will probably preside over economic hardship that persists for many years. At first the continuing debacle will be blamed on George Bush and a Congress with enough minority influence to have thwarted the grand plans of a thin majority. Inevitably, however, the inherent character of government and politics will be apparent in this new administration as well. The nation’s chief executives and legislatures of both parties have shared in contributing to today’s economic meltdown all the way back to the creation of the central bank in 1913. The Obama administration is backed by a now stronger congressional majority that is very nearly filibuster proof and no longer needs to worry much about mustering the supermajority required to override a presidential veto. Those who sent Barack Obama to the White House are anxious to see their fantasies made manifest. They may be patient for a little while, but not for long.
Hillary Clinton ultimately did a great job of helping to boost Senator Obama into the White House. Some say she’s now a shoo-in for a White House appointment, but she at least professes to be happy to continue being the best senator from New York that she can be. Probably a wise move.
Barack Obama came to office with the promise to deliver “Change We Need,” but we know that, since Texas Congressman Ron Paul left the race, no one has had the cojones to actually discuss the change we really need.
I wish the new president well and hope he will, miraculously, do the right thing. In my heart, however, I know he cannot. Leveling with Americans would be political suicide. In their own way, the Obama administration and a cooperative legislature may pave the way for a truth-telling politician in the future – an honest, uncompromising man or woman whose message today would be ignored and drowned out, even by the fading echoes of election night euphoria.
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