Attorney General John Mitchell ”Watch what we do, not what we say.”
The Obama Administration was elected on a platform of “hope and change” and transparency. Americans want their leaders to be honest and fair. The first year of the administration has been nothing short of a disappointment. Economic policy making has been elitist, deceptive and unfair to the constituency who voted for this President. Let us examine just three programs and initiatives: the stated goal, the outcome and the inconsistencies.
- Cash for Clunkers – A program to provide incentives to Americans to trade in their “gas guzzlers” for a new car and a government rebate. Outcomes – Why are we incenting car purchasers when we are running out of oil and mass transit is in disarray? Doesn’t this continue to promote the inefficient model of suburban homes, driving long distances to work or shopping? The program also adds to the debt burdens of consumers who took out auto loans. Auto analysts at Edmunds.com estimate that each car costs the taxpayer $24,000. The program had additional energy costs in destroying the clunkers. Finally, it added to the trade deficit as many of the cars purchased were imports. Inconsistencies: trade deficit, energy conservation, debt.
- Zero Per Cent Interest Rates – The Chairman of the Federal Reserve vowed to keep interest rates at zero as long as the economy was weak. Outcome- This policy has encouraged consumers and speculators to take on more debt. It has discouraged savings and it has had a particularly pernicious effect on elderly retirees. It has revived leverage and the same risk taking behavior in the financial community that caused the initial crisis. By allowing banks to borrow at zero percent and either park the money in safe treasuries or lend to consumers and speculators at higher rates, they have been able to earn risk free profits and pay large bonuses. And since we manufacture little here, the trade deficit has risen. Finally, the dollar has weakened with the side effect of commodity prices soaring and most importantly, the price of a barrel of oil doubling from its low. Inconsistencies: More speculation and risk taking, inflation in key commodities, added debt and discouragement of desperately needed savings.
- Health Care Reform – The Administration has a monomaniacal focus on achieving some form of national health care. Outcome: If passed Obama’s favored proposal will add enormous costs to employers at the same time that employers need to cut costs to remain competitive. The Congressional Budget Office conservatively calculates that these proposals will add at least $239 billion to the already out of control government budget deficit. Finally, taxes will increase to pay for the “reforms” further delaying economic recovery. Inconsistencies: deficits expanded, businesses made less competitive through added costs and tax increases.
A Visit to Never Never Land
I have picked three policy areas but there are more, ranging from adding troops to Afghanistan to bonus pay for bankers. There is an air of total unreality or naiveté emanating from President Obama. Today’s statement from the President unfortunately says it all:
BEIJING, Nov 18 (Reuters) - President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession.
After piling up one debt laden program or initiative after another, the above statement is incomprehensible and amazing. Where is the mainstream media to criticize the Administration on these inconsistencies? Obama’s statement only strengthens my view that this Administration is consistently inconsistent.
loading...
