Obamanomics – “Revolutionary”
Robert Reich, former Secretary of Labor under President Bill Clinton, argues in Salon today that President Obama’s brand of economics is “revolutionary.” Only an Ivy League educated lefty economist (i.e. – Keith Olbermann graduate of Cownell could not pull this one off) could have the intellectual gall to argue that the Obama budget is both “conservative” in the details, yet “revolutionary” in scope. The left is gearing up for a public relations campaign (some would say a propaganda war) to sell the Obama budget and it seems as if the left will use every catch phrase possible to sell this plan.
Reich argues that Obama’s brand of economics is ”an economic philosophy exactly the opposite of the one that’s dominated America for more than a quarter century.” If by economic philosophy Reich means capitalism, then I think conservatives agree that Obamanomics would move the United States away from the free market to expand the role of government in health care, environmental issues and tax policy. The era of big government is back and Robert Reich is cheerleading from the sidelines.
Reich’s column argues that “Obama’s budget projects that government spending by the end of the decade will drop to around 22.5 percent of GDP, which is about where it was under Reagan.” The Wall Street Journal’s Op Ed “The Obama Revolution” published on Feb. 27th, disputes the assumption that government spending will drop as a percentage of GDP, because the many of the entitlement spending initiatives in the stimulus spending are not temporary, the government’s proposed $1 trillion nationalization of the health care industry is fully funded, and massive tax increases will destroy the productive sector of the economy.
How can a leftist cook the books to get Obamanomics to look good? The WSJ argues that all you need is to make up wild assumptions about economic growth to create the illusion that the economy will grow quicker than government with the government controlling more of the private sector and taxes skyrocketing:
The biggest illusion in this budget may be its optimistic economic forecast. The White House assumes that the economy will decline by only 1.2% this year, before growing by 3.2% next year. This assumes the recovery will begin later this year and gather steam quickly to return to normal levels of growth. By 2010 to 2013, the budget adds, the economy will be cooking by an average of 4% a year — which is also how it conjures up magical deficit reduction.
Reich argues that the the Obama redistribution of wealth from the rich to the poor will allow the government to grow the best.
Obamanomics, by contrast, holds that an economy grows best from the bottom up. Obama’s program increases taxes on the top and uses the proceeds to raise the living standard of average Americans by giving them lower taxes, better schools and more affordable health insurance. That may not seem very radical, but compared with the last quarter century it’s revolutionary.
The WSJ concludes that the “revolutionary” Obama budget blueprint is a massive increase in the role of the federal government:
(F)ederal outlays will soar in fiscal 2009 to $4 trillion, or 27.7% of GDP, from $3 trillion or 21% of GDP in 2008, and 20% in 2007. This is higher as a share of the economy than any year since 1945, when the country was still mobilized for World War II. It is more spending by far than during the Vietnam War, or during the recessions of 1974-75 or 1981-82.
The bottom line is that President Barack Obama has radical views on the proper role of the federal government. The Robert Reich and Barack Obama vision of the American economy is heavy on government intervention and Robin Hood economics. If you are fan of France and Germany’s high tax low growth economies, you will be overjoyed with the policies being supported by Reich and other Obama cheerleaders.