Yesterday’s Wall Street Journal “Review and Outlook” painted a very concise and accurate picture of what the Obama Administration has done to keep America in the economic doldrums:
When it took office in 2009, many of us advised the Administration to focus on nurturing the recovery first and postponing social-policy priorities that would only add more economic uncertainty. All the more so given this recession’s unusual financial roots.
Instead, Democrats embarked on the most sweeping expansion of government since the 1960s, imposing national health care, rewriting financial laws from top to bottom, attempting to re-regulate the telecom industry, and imposing vast new costs on energy, among many other proposals. Not to stop there, in January it plans to impose a huge new tax increase on “the wealthy,” which in practice means on the most profitable small businesses.
Central to Mr. Obama’s political strategy for passing these priorities has been trashing business and bankers as greedy profiteers. His Administration has denounced or held up as political or legal targets the Chrysler bond holders, Wall Street bonuses, Goldman Sachs, health-insurer profits, carbon energy investors, and anyone else who has dared to oppose any of its plans to “transform” U.S. society.
Only yesterday at a Labor Day event in Milwaukee, Mr. Obama was at it again, declaring that “anyone who thinks we can move this economy forward with a few doing well at the top, hoping it’ll trickle down to working folks running faster and faster just to keep up–they just haven’t studied our history. We didn’t become the most prosperous country in the world by rewarding greed and recklessness.”
Whatever else one can say about such rhetoric, it is not the way to restore business confidence or turn a fragile recovery into a durable expansion. It has only spread fear and even greater uncertainty.
Surely history has taught us one consistent lesson — as government power over the private sector increases, economic growth stagnates. It takes a lot of money to pay for big government, and the more money government takes from the private sector, the more limited the private sector’s options become. Increases in government regulatory power also force the private sector to involuntarily contribute man-hours and other financial and material resources to government-specified ends. And with increased power comes the opportunity for increased government domination and intimidation of private sector entities with whom it loses favor.
None of these things encourage entrepreneurs to take chances by growing their businesses. Instead, they create a climate of uncertainty and caution, which manifests itself through reservations about spending money, hiring new employees, or risking capital for business expansions. When business owners are uncertain about costly new regulations, potential lawsuits or fines, or an even bigger loss of sales income due to a “double dip” recession, they will keep as much money in the bank as possible.
Unfortunately, President Obama and the Democrats chose to expand government — something they had to postpone for 14 years, until they had control of the Executive and Legislative branches — instead of stabilizing the economy and putting it back on an established growth track. Our economy started to exhibit the beginnings of a modest recovery last year, but since Obamanomics 1.0, Borrow, Spend, Regulate, Tax and Spend Some More Edition TM has been fully implemented, we appear to be heading for a “double dip” recession.
Heck of a job, Barry.