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.