THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume XI, Issue # 18, January 15, 2009
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
MORE THAN AN EMPTY SUIT?
By Dennis T. Avery
BARACK HUSSEIN OBAMA, PRESIDENTIAL LEADERSHIP, & THE AMERICAN ECONOMY: AS PRESIDENT, WILL OBAMA
BE ABLE TO REBUILD THE U.S. ECONOMY? THE OBSTACLES THAT ARE LIKELY TO PREVENT OBAMA FROM
FUNCTIONING EFFECTIVELY AS MANAGER OF THE ECONOMY
FULL STORY:
We elected a President we hardly knew. Barack Obama’s campaign team — and the mainstream press — told us only
that we should feel “hopeful.”
Now we seem to be relying on this man to rebuild the U.S. economy almost from scratch. That’s highly unlikely. My
former boss, Gary Seevers, was on Richard Nixon’s Council of Economic Advisors, and, before that, a top official in
Nixon’s wage-and-price-control effort. He told me that “neither the CEA nor government price-fixing ever had a
chance to succeed. The economic data was too late and too weak, and the tools too flimsy.” Seevers ultimately put
his faith in good incentives.
Obama, himself, was blind-sided by the sub-prime mortgage collapse, and his response was that he’d save the
economy with a replay of Franklin Roosevelt’s New Deal public works projects. That meant he had no real rescue
ideas. After all, U.S. unemployment was nearly 25 percent when Roosevelt was elected, and was still at 19 percent in
1938, after six years of Roosevelt’s “pump-priming.” Many of the public works weren’t badly needed, and they all
took a long time to plan and pay out. Not until World War II, did America finally rise out of the Depression.
Fannie Mae and Freddie Mac are still guaranteeing high-risk mortgages for poorly-qualified buyers, applauded by
Barney Frank and the hard-Left Democrats. Investment does not mean buying a house the buyer can’t afford.
Investment means putting capital into your trucking firm or computer service company and then buying the big house
after the business starts to earn income for you. Investment first, rewards second.
Most of Obama’s Cabinet appointments have turned out to be retreads from the Clinton years, which also doesn’t say
much about investing for growth. The Clintons’ investment-friendly tax cuts were forced by the Republicans — along
with the welfare reform that stimulated so many low-income families to start working their way out of poverty, rather
than staying on welfare. Those set the stage for real economic growth.
But, then, Greenspan and the Federal Reserve decided the key to growth was simply lowering interest rates. The
recovery from the dot.com bubble-burst became the euphoria of free money. Even Freddie and Fannie looked like they
were earning profits — until the $200 billion bailout that is still ongoing.
Obama’s own experience as a community organizer in a rusting steel-mill neighborhood is a handicap itself. Dealing
with the aftermath of massive union-enhanced failure has made Obama too hopeless about markets. The unions
helped a few of the country’s workers, at the expense of the rest. America still has a competitive auto industry, thanks
to Asian investments in U.S. car factories and non-union workers.
Not even the U.S. government has enough money to bail out its whole economy. Fortunately, the Obama “stimulus
package” has morphed partly away from handouts to mayors and governors, and somewhat more into shortterm tax
cuts. That’s progress. But the real key to longterm investment will be permanently lower taxes, and tighter federal
spending. Social Security and Medicare must be reined in, along with Freddie and Fannie. The promised campaign
against man-made global warming will also be massively expensive — and comes at a time of declining global
temperatures.
Obama’s presidential campaign was the mirror image of Deval Patrick’s run for Governor of Massachusetts. This is not
surprising, as they shared the same campaign manager, David Axelrod. Both men presented themselves as blank slates,
offering “hope.” Since his election, Patrick has been able to do little except wrangle over turf with the “old pol”
Democrats in the Massachusetts statehouse. Will Obama become more than an empty suit at the national podium?
LINKS TO RELATED TOPICS:
Political Economy -- Philosophies, Systems, & Public Policies:
Government, the Economy, & Economic Prosperity
Dennis T. Avery is an environmental economist, and a senior fellow for the Hudson Institute in Washington, D.C. He
was formerly a senior analyst for the Department of State. He is co-author, with S. Fred Singer, of Unstoppable
Global Warming Every 1500 Hundred Years. Readers may write him at PO Box 202, Churchville, Virginia, 24421 or
email to cgfi@hughes.net
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THE PROGRESSIVE CONSERVATIVE, USA
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Dr. Almon Leroy Way, Jr., Editor
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Conservative Government Ensures a Nation's Strength, Progress, & Prosperity