FRONT PAGE CONTRIBUTOR
Barack Obama’s broken window economy
It’s awfully strange to see a President simultaneously claim that his economy is (finally) on the mend… while simultaneously demanding yet another “emergency” unemployment extension. Obamanomics is a perpetual unemployment emergency. Five years on, the American economy still can’t rise from its sick bed and pull the IV tube out of its arm. Heckuva job, Obama voters!
Of course, they all think it’s George Bush’s fault. Or maybe even the Obama dead-enders are getting tired of that old dodge, and they’ve simply accepted that America can do no better. We’ll never be the colossus that bestrides the world again, and they think it’s better that way, since we’re evil and greedy and all that. We’ll sag back down into our sick bed, and Dr. Obama will slip a little more morphine into that IV, sending us into the mists of history with a nostalgic smile spread across our numb faces. At least we finally proved we really, really, really care about “income inequality.” Take good care of the world, China!
President Obama today declared that rallying behind the unemployed, by extending their emergency benefits again, is “who we are as Americans.” It was better when we were builders, explorers, and entrepreneurs. But our national identity is now defined by the food stamp, the welfare check, and unemployment benefits that have become functionally equivalent to welfare. ”Who we are” is a great national hospice, where a dying generation forgets that its grandparents were giants. The most important thing now is to insulate people from risk and consequence, which means we can never again dare to build and achieve. The last word anyone would use to describe Barack Obama’s electorate is “daring.”
There’s nothing sadder than listening to Obama regale his child-constituents with tales of mighty projects like the Hoover Dam or Golden Gate Bridge… projects he would kill deader than hell with regulations, if anyone were to attempt them today. Ask the Keystone pipeline folks whether Obama’s America is the sort of place that builds Hoover Dams. Obama spends vast amounts of money – more than any American president ever has, racking up more debt than all of his predecessors combined – but he creates nothing, builds nothing, leaves nothing except a pile of past-due invoices for the next generation.
At least today he was more honest about that. No calls for “Sputnik moments” any more! Now it’s all about extending unemployment benefits forever, providing an unbroken stream of money for people who can’t find jobs. It’s a little odd that the same politician professes himself concerned about “income inequality.” Why wouldn’t a country with a dwindling workforce have an unequal distribution of income? Of course, when you add in the value of all those government goodies, suddenly Food Stamp Nation isn’t so far behind the “middle class” after all… but you’re not supposed to think about that, and on the off chance that you do, you’re supposed to regard it as a triumph.
The President disputes the notion that extending unemployment benefits also prolongs unemployment, although a little thing called “objective reality” argues differently. We are not supposed to discuss the indisputable link between perpetual “emergency” benefits and slow job market recovery, because the fragile American populace cannot bear to hear such things. It gives them nightmares; they stir uncomfortably in their death beds, and Dr. Obama wishes them to remain still. If they start asking hard questions about why we’ve still got a moribund economy after five years of his stewardship, they might grow upset enough to get up and do something about it.
Even more curiously, the President continues to insist that unemployment benefits are a magical form of economic stimulus, despite five years of grueling evidence to the contrary. (Of course, for the true Obama devotee, every day is Day One; every time he steps into the Oval Office is the first time he’s ever been there; and the most powerful President in history, bound by neither Constitution nor statute, is a helpless victim of shadowy forces.) That unemployment stimulus will start working any day now – just you wait and see. All we have to do, as Obama explained today, is shower more money upon the unemployed, who will run out and spend it on groceries, or turn up their thermostats, which will cause money to flow into the pockets of local businesses, who will hire more people. (I’m not kidding. He really said that.)
It’s all so simple to Obama’s mind, and he just can’t understand why it hasn’t worked yet. All his theories say it must work. That’s what an economy is, right? People spending money? So if the government takes money from rich people, or just prints dollars up in the Treasury basement, and throws a blizzard of bills at people, they’ll spend money… and bada-bing, bada-boom, ECONOMY! And if people are buying stuff, that means other people must be selling it, so… SHAZAM! JOBS!
We’ll just keep trying it until Reality learns its lesson and kneels before Theory. Maybe we just need more unemployed people spending more welfare dollars to hit the magic pressure level needed to initiate socialist cold fusion. Too much of the old, evil, greedy, free economy remains. Cut that workforce down a bit more, and who knows what beautiful flowers of social justice might bloom?
In truth, Obamanomics can be viewed as an example of Bastiat’s “Broken Windows” fallacy, in which a broken windows is presented as a wonderful dose of economic stimulus to the community because of all the people who must be employed to fix the window, and all the people who will service their needs in turn. Much of the Twentieth Century was a dogged attempt by Reality to convince liberals that Bastiat was trying to explain a mistaken notion. They still think the Broken Windows thing sounds awesome.
The fallacy in question concerns the cost of opportunities lost when money is diverted involuntarily. Bastiat’s broken window does sound like a terrific source of economic stimulus… until you think of all the things that might have been done instead with the money used to repair it. Socialists are very keen on preventing people from thinking about all the things they could have done with their money, had government not seized it, or all the things tomorrow’s citizens might have done, if they were not burdened with debt. As far as the socialist is concerned, government action has zero opportunity cost. There is only money appearing from the ether, to be snatched up by deserving hands. You are not permitted to ask what free people might have done, if the State did not regulate them, tax them… and support them. The State is the center of all things. The private sector revolves around it, the way planets and asteroids revolve around a star.
On behalf of Frederic Bastiat, let me explain to Obamanomics worshipers that no, an economy is not just what happens when people spend money. It matters how they earn it. Throwing bags of cash at people and sending them forth to spread stimulus is missing half of what makes an economy function. The value generated by employees earning their income is lost. The unemployed baker is given 80 percent of what he would earn for a cake… and produces 100 percent less cake. And no, jobs do not spring up like flowers in a well-fertilized field to abosrb all that lovely unemployment money. Not enough of them, anyway… and that’s the point. The void of capital investment and entrepreneurial risk cannot be filled by the redistribution of wealth. Jobs come from investment in the pursuit of opportunity. And highly motivated people tend to do better at making investments, discovering opportunities, and finding jobs. Only a statist could think incentives are entirely irrelevant to those endeavors, because the statist thinks in terms of what people are told to do, not what they want to do.
To Obama’s eye, unemployment is a broken window that creates wonderful opportunities for the government glaziers who come along to fix it. If he stops saying that, people might start asking who broke the window.