Yesterday, Barack Obama started running a new ad touting “economic patriotism.” I’m not making this up. When you hear this you half expect to told your production quotas for the next Five Year Plan and how you’ll fit into the Great Leap Forward. (Whoa. Forward. Where have I heard that before?)
What is this “economic patriotism”? “It’s time for a new economic patriotism, an economic patriotism rooted in the belief that growing our economy begins with a strong and thriving middle class.”
We’ve heard a lot of this before. It is called cargo cult economics. What underpins his economic plan is the idea that prosperity can be created by mimicking the trappings of prosperity. It is like the family who is down on its luck and facing homelessness going out to buy a new car and a flat screen television on credit because prosperous families have these things and if they have those items, they, too, will be prosperous.
A healthy middle class is necessary to a healthy society and economy. But you cannot create a middle class via subsidies and government action if the economy is in the tank. For the past four years we have been promised one recovery after another. Each of these recoveries to be brought forth by a blizzard of government regulations, funding for industries that have no market, and government financial intervention in the economy. What it has actually produced permanent unemployment/underemployment in the 16% range, stagnant growth, and a burgeoning dependent class.
Training students in skills, the hiring of teachers, the development of new technologies will be the logical outcome of a healthy economy and a healthy middle class. They cannot develop them.