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July 25, 2009
Obama a 'Know-Nothing' on economics - Barnes
The Weekly Standard's Fred Barnes writes "There's no evidence Obama has even a sketchy grasp of economics." He makes a good case:
The president also spoke favorably at the press conference of taxing "risky" ventures by Wall Street investors. It wasn't clear what risky investments he had in mind. Never mind. Reckless risk-taking is hardly a problem at the moment. It's the lack of any risk-taking at all by investors that's holding back the economy.
Obama said the funds raised through his risk tax would be available for bailouts of large financial institutions whose collapse might harm the economy. Fine, but there's a smarter, simpler, and tax-free way of dealing with outfits deemed "too big to fail." It consists of requiring deeper capital reserves as they grow in size. If that solution is known to the president, he hasn't let on.
Then there's the matter of corporate profits. You'd think Obama would love profits since they nurture a robust economy and job growth and are largely responsible for the rise in the stock market last week to its loftiest point since January. And strong profits may foreshadow an economic recovery. But the president's opinion of profits ranges from ambivalent to hostile.
He declared it "a good thing" that banks are profitable again, but he couldn't leave it at that. He went on to bemoan the absence of "change in behavior and practices" among bankers. As for the "record profits" of insurance companies, he had nothing but disdain. "What's the constraint on that?" he asked, as if those profits should indeed be constrained.
Like all liberals, Obama brings a moral judgment to economic activity. If someone is harmed or if profit is "too high" (a completely arbitrary and ignorant judgment), or if a company takes risks he doesn't like, it must be regulated, taxed, and publicly humiliated. It's not so much that Obama is ignorant of economics as he is ignorant of free market economics. And for that, we will suffer a long slow decline unless the GOP can get their act together and throw this ignorant wretch out of office in 2012.
Read Barnes' insightful piece.
Hat Tip: Ed Lasky