Pethokoukis

A bridge to the past: The old-fashioned and obsolete economics of Obama and Biden

Image Credit: Official White House Photo by Pete Souza (Wikimedia Commons)

Image Credit: Official White House Photo by Pete Souza (Wikimedia Commons)

Although the Obama-Biden campaign is arguing otherwise, Romney-Ryan are not proposing to dismantle America’s social insurance system. They want to mend and modernize the Welfare State, not rend it or end it. They want a safety net that is fiscally sustainable, one with incentives that are pro-family, pro-work, and pro-market. They are reformers, not radicals. They accept the existence of Medicare, Medicaid, and Social Security. They are not running to reverse Roosevelt.

But what about Barack Obama and Joe Biden? Are they reformers or are they something else? Do they basically accept the pro-market Reagan Revolution – as Bill Clinton did — or are they trying to reverse it?

Obamanomics is a bridge to the past. A backward movement rather than a forward one. Obama has directly dismissed Washington’s pro-market shift – including deregulation and lower marginal tax rates – of the past generation as an economic error that produced greater inequality but not much else. The president, last year, in Osawatomie, Kansas:

There is a certain crowd in Washington who, for the last few decades, have said, let’s respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If we just cut more regulations and cut more taxes—especially for the wealthy—our economy will grow stronger. … But here’s the problem: It doesn’t work. It has never worked. … Over the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk.

Then there’s Biden, who was a legislator throughout the Long Boom from 1983-2007. This is what Biden said when he announced his presidential bid in June 1987, as reported by The New York Times:

Pledging that he would challenge Americans to rise above ”the mere accumulation of material things,” Senator Joseph R. Biden Jr. today announced his candidacy for the Democratic nomination for President. ”For too long in this society, we have celebrated unrestrained individualism over common community,” Mr. Biden declared in this city where he made his political start as a county councilman.

”For too long as a nation, we have been lulled by the anthem of self-interest,” he continued. ”For a decade, led by Ronald Reagan, self-aggrandizement has been the full-throated cry of this society: ‘I’ve got mine so why don’t you get yours’ and ‘What’s in it for me?’ ” Kennedy Oratory Recalled

”We must rekindle the fire of idealism in our society,” he said in language that recalled the speeches of John F. Kennedy, ”for nothing suffocates the promise of America more than unbounded cynicism and indifference.”

Like his boss, Obama, Biden sees pro-market policies as having ushered in nothing more than a Decade of Greed — rather than a Decade of Growth that put quick end to America’s global decline.

Obamanomics is a bridge to the past, but a fantasy past where high taxes rates, widespread unionization, and a heavily regulated economy produced “shared prosperity” in the 1950s and 1960s. Former Bain Capital exec Ed Conard, however, dispelled the myth in his book Unintended Consequences:

The United States was prosperous for a unique set of reasons that are impossible to duplicate today, including a decade-long depression, the destruction of the rest of the world’s infrastructure, a failure of potential foreign competitors to educate their people, and a highly restricted supply of labor. For the sake of mankind, let’s hope those conditions aren’t repeated. It seems to me anyone who makes comparisons between today’s economy and that of the 1950s and 1960s without fully disclosing their differences is deceiving their readers.

Obamanomics is stuck in the 1970s as Obama and Biden today talk up public television, high-speed rail, and Keynesian economic tinkering. Take the idea of those superfast bullet trains, something both Obama and Biden are fascinated with. They are eager to spend billions in promoting what may soon become an obsolete mode of transportation:

Boyhood memories of trains and fascination with steam locomotives bind much of the railfan community together and nostalgia brings everyone out for photo shoots when a classic train makes an appearance, but that very same nostalgia should make us cautious when planners propose massive high speed rail projects to reduce travel time between cities and eliminate congestion on our roads. Although those goals are admirable, the rail projects are rooted in the past and ignore the various technologies already appearing in intelligent cars and the rapidly approaching autonomous cars, like those being tested by Google, as potentially far better solutions than trains could ever be. Intelligent and autonomous cars make high speed rail seem outdated before the project is even under way.

To be the dominant global economy in the 21st century and ensure a rising standard of living, America’s Welfare State must be modernized. And the nurturing the Innovation State must be prioritized. Looking wistfully backward to a past that never really was will accomplish neither.

 

12 thoughts on “A bridge to the past: The old-fashioned and obsolete economics of Obama and Biden

  1. Every time I hear Obama talk about the “failed policies of the past” I think of FDR & Stalin. But what should I expect from the Narcissist in Chief?

  2. When was that last time that AFFIRMATIVE ACTION produced the smartest guy in the room?

    These incompetent clowns are simply stuck on stupid. Just look at their failed track record.

  3. I don’t understand the fascination with the 50′s and 60′s. Conservatives see it as some sort of paradise with wholesome family values and liberals see it as some sort of paradise with shared prosperity. The 50′s and 60′s sucked! Recessions, wars, communist hunts, paranoia, civil unrest, nuclear threats, and the FBI. Other than the culture and my parents, nothing good came out of that time. Why is there this great desire to return there?

    I mean, back in the 50′s and 60′s, many of the necessities we have today, like color TV, a/c, refrigerators, cars, were luxuries of the rich.

    I’d rather be a middle-class guy in 2012 than a middle class guy in 1950.

    • People are nostalgic about certain aspects of the 1950′s, that doesn’t mean they wish to turn back the clock. We were a stronger nation then in many respects, morally, militarily and financially. There was a can-do attitude that drove increased prosperity. The culture wasn’t as filthy as it is now. The 60′s counterculture revolution has been a disaster for this nation in every respect. We are a weaker nation as a result.

      • Hm, it may be the nostalgia effect, Ken, but why is it there in the first place?

        Maybe it’s just because I didn’t live through it (or because I firmly believe that every day is better than the last), but I just don;t understand the appeal of that time frame.

    • The Big Government policies of the past will never work in the future. In fact, they often worked very poorly in the past.

      We live in a new and very different world that saw the fall of the Iron Curtain, the end of the Cold War, the emergence of globalization, the spread of freedom, free markets and capitalism, the decline of socialist Europe, the birth of the BRICS (including Mexico, Indonesia and S. Korea) and the initial muscle-flexing of 2-3 billion in the new and increasingly wealthy Asian middle-class–all potential consumers to whom we would love to sell stuff.

      Most recently, the broad and deep application of technology has enhanced global productivity and freed everyone to partake in higher value-added activities. It has slowly replaced our Industrial Age that peaked 40-years ago and that has since relentlessly declined as a percent of our and global GDP. Shumpeter’s “creative destruction” at its very best.

      In contrast, Obama and Biden’s Big Government and its top-down, totalitarian, rule by fiat, application of costly and productivity killing regulations, excessive spending, massive debts and the subjugation and suppression of the individual in this new flatter world can only get in the way; witness the moribund 2.2% GDP growth generated during this stealth “recovery.” And just look at the labor unions, the agents of Obama and Biden. They too belong to history and are doomed because they have no answers that will permit them to take full advantage of any of the good thing mentioned in my first paragraph. They are fighting a losing battle, kicking and screaming every inch of the way.

      Obama and Biden stand for nothing more than the maintenance of power and control in the hands of a few–them. Their model belongs to history. They will be increasingly rejected in the present and they have no future.

  4. Obama, Romney, Stalin, Trotsky. Yawn. The Obama-Lite policies Romney offers don’t include real reductions in federal spending which is the only thing that really matters. Wake me when someone wants to actually cut federal spending.

    • Romney has stated he will reduce fed spending from todays bloated value of 24% of GDP, to 20% by the end of his first term. That is significant progress. He might not be as conservative as your ideal, but lumpinghim in with Obama and the communists is pretty lame.

      • The point of the analogy is that even though Trotsky was for a more democratic and less centralized form of governance than Stalin, they were both communists. Similarly, just as Romney is for a more democratic and less centralized governance than Obama, neither one would reduce the growth of federal spending in real terms. Under Romney’s plans, the federal budget will be 8 percent larger in real terms than it is now. Yes, I am bitter that I cannot vote for candidate who supports a real reduction in federal spending.

  5. You’re making the train fascination more complicated than it needs to be. The Progressive Dems are train fans because they believe firmly in the European model of government. Europe has more train connections. Therefore, the U.S. needs to get busy and build super-fast, super-duper trains. Of course the fact that it promotes European style Crony Capitalism and rewards costly and inefficient union payoffs are real pluses. It’s actually pretty simple.

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