Posted By BillHeise on September 14, 2010

This started out as a response to a Facebook note posted by one of my friends. He had written:

Well there you go: After voting in 2001 for a tax decrease by pushing its cost onto the next administration, Mitch McConnell (R-KY) shows his support for the working class by refusing to support a continuation of the cut for the lower and middle classes unless the wealthiest 2% gets the majority of any tax cut. By the way, did I mention that in 2007 the wealthiest 300,000 taxpayers had more income than the “poorest” 150 *million* taxpayers combined? No wonder he feels sorry for them. Why *anybody* would vote for a party whose leadership includes someone like that I don’t know.

Well, despite his inability to vote for ‘that sort of person,’ my friend is going to be shocked, because millions of people who happily voted for Obama in 2008 will switch sides in 2010 and vote for the opposition party. As I am one of them, I thought I’d tell you why.

I voted for Obama because of the income disparity problem in this country. Under GW, the rich were getting fabulously rich. That, in my mind, is a huge problem because it creates an unsustainable tension in a democratic nation. It reminded me of the Gilded Age, where progressivism was born amidst the last wave of un-democratic wealth creation; and I’m not all that surprised that 28 years of Reaganism has produced another Progressive in Barack Obama.

Obama spent the first year of his presidency traveling around the world giving speeches on how America has abused its power (we have) and on how his administration will do better (they have), and I like that fact about him, as opposed to the ‘we’re-in-charge-now-get-out-our-way-while-we-make-a-policy-of-preventive-war’ of his predecessor. Following that policy got us involved in a series of unwinnable wars (Iraq; Afghanistan), while weakening our image abroad and not appreciably giving us the ability to defend us from threats at home (Christmas Day bomber; Ft. Hood massacre).

In that sense, I applaud Obama’s desire to remake the image of America at home and abroad. But being able to applaud someone for something is not the same thing as being satisfied with their overall performance.

Barack Obama’s Problems

Obama’s woes stem from the fact that Democratic solutions are not built on a keen understanding of the language of economics which has led the country for the last 25 years (I place Reagan’s legacy as starting in 1983 when the economy got rolling again). Reagan came into office with confidence that he knew how to grow an economy (he did). The Democrats were put in a position of pointing out just how much Reagan wasn’t addressing (there was a lot). As a consequence, they drifted away from figures like Daniel Patrick Moynihan (one of the chief architects of the welfare state) to figures like George McGovern, a well-meaning guy who didn’t know much about economics.

The Obama administration is committed to reversing the policies of a generation of Reaganism in which the Democrats basically sat on the sidelines of the economic debate. Good for them (for attempting to get into the economics game, not for sitting on the sidelines). But their problems arise from the fact that their crop of economists tend to be highly partisan members of a clique that has felt left out in the cold for 25 years. This is why Obama famously told Republicans that he had won the election and they should get used to sitting on the sidelines now. That’s fine, too, if he has policies that will do a better job than Reagan’s pro-growth policies had done. But this is where they have failed. In a competitive world he is not doing ANYTHING to make America MORE competitive.

In particular,

1. His policies don’t address the income disparity except through transfer payments from rich to poor (makes sense; he’s a lawyer).
2. He put a limits on CEO pay in areas where he has been able to gain control (GM; banks), but the only way that can work for the whole economy is to pursue a policy of total national control of every company in America. (Maxine Waters (D) famously said it in public, giving Rush one of his favorite sound bites, but Lindsey Graham (R) was not opposed to such a horrible idea).
3. His policy of cap and trade raises taxes in order to defer present value (energy companies who currently produce energy) into an unknown, untested future of green jobs which may in fact not hold an equivalent economic value. Subsidizing the economy through stimulus (as well as GM into profit) is an unsustainable way to continue the pattern of economic growth.
4. In the absence of a pro-growth plan, we can expect the (too few) remaining high wage jobs to move to areas of the world where barriers to entry (and taxes) are not so high.

In addition, Obama has broken several of his campaign pledges, including

1. Transparency. His administration has not been more transparent than past administrations. Indeed, one of the things that the American people meant by transparency was the promise that we would know where we were going in this economy again. He has introduces uncertainty. And Obama promised to restrain unemployment beneath the 9% level by passing the stimulus. We are at 9.6%. So it appears (at this point) that he doesn’t have a forward-looking plan.
2. He was going to be the politician who would bring us together. I’d heard that before from GW, and I didn’t believe it then, and I didn’t believe it when Obama said it. But he continues to play the blame game, blaming Bush for all his problems, while taking credit for things (like our ‘victory’ in Iraq) that he has no historical connection to. If he didn’t mean it, he shouldn’t have said it. If he did mean it, where is the evidence?
3. More importantly—and unlike Johnson and Reagan—he passed his agenda on a strict party-line vote. This is important. It means that Obama owns the failed stimulus. He owns the healthcare proposal. He owns the debt. I thought it was a little humorous when he was arguing this week about the fact that ‘we can’t afford the tax cuts, because they would cost 700 million dollars over ten years. Really? That’s his argument for stifling growth? He has projects larger annual debts every year of his presidency! He has shown himself to be a less-reliable teller of truth than he was advertised to be. I have started to think that he’s another politician like Bill Clinton, who was famously advertised as being able to compartmentalize his thought. That’s not who I voted for.
4. One final personal note. In such an environment, I suspect he’s no longer a person who stands for ‘change we can believe in,’ and much more like a Chicago politician, a person from a single-party state who rules with an iron fist (look at his Chief of Staff, Rahm Emanuel, for proof of this). Living in Cook County, IL as I do, I find it hard to get past this impression. But, as I said, that could be just me.

A Note on Politics

All of this is why I don’t trust politicians. They are too eager to assign blame to the opposition, while taking credit for themselves.

But Obama is young enough to have been raised in the two generations of people who think that our politics defines our extent and our limitations as human beings. This thought goes back to back to Plato (Republic) and Aristotle (Nicomachean Ethics), but I am not persuaded. There is a higher philosophical perspective than this.

It is proved (to me) in the face that in the ‘us-versus-them’ world of politics, I am always one of them. Who am I if no one will have me?

Categories: Economics, Politics
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