The View From 1776

The Centrist Turns Left
By Dariel A. Colella

During the 2008 campaign, Barack Obama was very clear about what his intentions were and everyone knew that he wanted to implement change.  But he was also very clear about the kind of change he was going to implement.  Because the media glossed over his so-called articulate words, people were caught up in the sound bites of hope and change.  Although his words seemed hopeful, they were words of a community organizer who vowed to change the United States to his own world view.  His goal, as he said, is to “fundamentally transform the United States of America.” Those were not the words of a centrist.

The health care debate has brought the question of Obama’s vision for the future to the forefront.  Despite recent backpedaling, Senator Obama stated in 2003 that he was all for a single payer system:  “I happen to be a proponent of single-payer, universal health care plan.” Michelle Obama reinforced his views and campaigned for the kind of change Obama had in mind:  “The truth is, in order to get things like universal health care and a revamped education system, then someone is going to have to give up a piece of their pie so that someone else can have more.” However, the recent town hall meetings seem to indicate that U.S. citizens are not too keen on relinquishing that piece of their pie.

The cap and trade bill seemed on the verge of passing before people woke up and realized that this might not be in their best interests.  But during the campaign Obama did not hide his agenda in this regard either:  “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket, even, you know, regardless of what I say about whether coal is good or bad.  Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name, whatever the plants were, whatever the industry was, they would have to retrofit their operations.  That will cost money; they will pass that money on to consumers.” American citizens are realizing that their pie will become smaller and smaller as each day of the Obama Administration passes, and this is not a typical administration. 

The kind of leadership Barack Obama wants is the kind of leadership that he is comfortable with, community organizers.  The numerous czar appointments are one more example of Obama’s move away from governing as a centrist.  The president is surrounding himself with those who share his leftist views.  Glenn Beck has called to our attention that Van Jones, the newly appointed green jobs czar, was a radical and a community organizer, and Barack Obama has put him in a position of power to mold the United States to his vision.  Apparently revisionism is key, and changing the way September 11, 2001 is remembered is a good beginning. 

According to a special report in The American Spectator online, Matthew Vadum reports that “The president signed into law a measure in April that designated Sept. 11 as a National Day of Service, but it’s not likely many lawmakers thought this meant that day was going to be turned into a celebration of ethanol, carbon emission controls, and radical community organizing.” A National Day of Remembrance would have been more appropriate. 

It is the agenda that matters though and, once again, Barack Obama told us what his vision will look like if we elected him:  “We can’t drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times whether we’re living in a desert or we’re living in the tundra and then just expect that other countries are going to say ok.  That’s not leadership.  That’s not going to happen.” Not if all goes according to his plan.  Perhaps we should ask ourselves if the takeover of GM was a necessity, or was it a stepping stone for the implementation of government approved cars. 

Governing from the center would include bipartisian cooperation, but Obama seems to have no interest in Republican input.  In fact, the Democratic party has instead tried to paint those who are speaking out at tea parties and town hall meetings as right wing nuts or Republican planted operatives.  In reality, we are witnessing concerned citizens who are increasing uncomfortable with the far-left agenda of this administration.  Change may be necessary in this country, but it is the fundamentals that have kept us free. 

Let’s immediately dispatch the moralistic protestations of liberal-progressives that any degree of rough interrogation of terrorists, even to save thousands of lives from planned attacks, is unconscionable.  Liberal-progressives grow weak-kneed contemplating the confinement and interrogation of a few hundred terrorist thugs, while aggressively murdering millions of babies.

President Obama supports the slaughter without judicial due process of babies via abortion, which is reminiscent of the an earlier pagan worship of the god Molech, requiring the sacrifice of infants.  At the same time, the President’s fellow liberal-progressives hold street demonstrations and candle-light vigils to protest execution of vile murderers and rapists and to protest incarceration of criminals.  These are pagan rituals oozing from the gospel of Jean-Jacques Rousseau, who believed that private property was the root of all evil and, in particular, the cause of crime and wars.

So-called abortion rights have always been a big rallying point among liberal-progressive-socialists.  Support for abortion is, on the flip side, support for sexual promiscuity, called free love in earlier generations.  Abortion and sexual promiscuity are viewed as social weapons to destroy the Judeo-Christian moral foundations of our constitutional government, opening the way for full socialization of the economy.

A society that looks to government for all its daily needs and is educated to moral relativity is a society with no way to restrain the enlargement of tyrannical ambition.

Today’s howl against rough interrogation methods used to obtain vital information from Al Queda terrorists similarly arises from the religion of socialism (which, however, obviously didn’t deter liberal-progressive-socialists like Vladimir Lenin, Joseph Stalin, and Adolph Hitler).  Liberal-progressive-socialists in the United States, in fact, clamorously supported the murderous actions of Lenin and Stalin all through the 1920s and 1930s.  Among them were Soviet-supporting Communist Party USA screenwriters like Dalton Trumbo, who is the subject of a current adulatory retrospective on Public Television.  See The Friends of Dalton Trumbo on the Commentary website.

Liberal-progressives regard rough interrogation of Al Queda terrorists with horror, because they see those terrorists as victims of capitalism, who were deprived of their fair share of earth’s wealth by capitalist greed.  As academics following 9/11 told us, the structure of our constitutional government prevented social justice, in this country and elsewhere.  9/11 was what we deserved.  We therefore have no warrant for Gitmo detention or CIA interrogation methods.

President Obama’s plans to subject CIA agents and ultimately Vice President Cheney and President Bush to criminal prosecution reflects both that Rousseauian distaste for private property rights and the socialist faith that a one-world government will harmonize all of the world’s diverse peoples and transform them into homogenous, benevolent, happy campers.

Even the arch-liberal Washington Post has published a story wondering, by implication, whether where President Obama lost his marbles: How a Detainee Became An Asset.

A thoughtful reader, who generally disagrees with me, posted the following as part of his comment responding to The Bigger the Government, the Harder the Economic Fall:

I must confess that I find your “mysticism” explanation of how business cycles occur somewhat baffling, but knowing your anti-Keynesian viewpoint, I should not be surprised that you view any governmental pump priming with suspicion.

According to the butterfly effect, any seemingly insignificant action will have a cascading effect and invariably lead to a chain of events elsewhere.  How much more telling would the expenditure (whether you approve or not) of billions of dollars be to the economy than the flutter of the wing of a moth?

My response:

I can’t presume to speak for the reader’s views, but liberal-progressives on balance advocate the Keynesian macro-economic approach, a variety of chaos-theory, butterfly effect, which appears to me to be simplistic. 

Keynes wrote that any government expenditure will stimulate the economy.  The example most often cited by opponents was Keynes’s contention that it would work satisfactorily to pay men to dig holes, then to refill them the next day, and re-dig them on the third day, refill them, etc., ad infinitum.

That is the approach embodied in the Democrat/Socialist stimulus bill, the vast part of which goes, not directly to employing workers on new jobs, but into funding for existing activities.  Much of it funds state government revenue shortfalls.  In western New York where I live, for example, the state has undertaken few, if any, new projects.  The Federal stimulus funds have been used for road and bridge repair work that was scheduled before passage of the stimulus bill.  Some new road crew hiring has resulted, but mostly the effect is only to change the source of funding.

Liberal-progressives subscribe to such spending as an economic stimulus, but, at the same time, sneer at tax cuts as “trickle down” economics.  Apparently “trickle down” is acceptable economics when it’s collectivized spending for anything from an all-but-empty John Murtha airport to promotion of abortion and voter registration fraud by ACORN.

The implicit paradigm is that consumption is a single “thing” that can be arbitrarily augmented, fine-tuned, or curtailed by government spending programs and by the Federal Reserve’s Open Market Committee with its hands on the fiat money spigot.  Liberal-progressive Keynesian devotees, in effect, subscribe to a Pavlovian concept of conditioned response: government regulations and welfare-state programs can be relied upon to train an abstraction called “the public” to respond to whatever bells the elite decide to ring.

In contrast, my view is largely in conformity with the Austrian school of economics, exemplified by Friedrich von Hayek.  Compared to Keynesian economic-class abstractionism, Austrian economics is individualistic to a polar opposite degree.  Austrian economists focus on how a huge panoply of very different individuals most likely will react to changing economic conditions, each individual making his own calculation regarding his self interests, based on a continually changing kaleidoscope of prices in the free marketplace. 

Businessmen and individuals do not all respond in the same way to government spending.  Business men, in particular, look a bit farther down the road than the next few months of promised new Federal spending.  They must assess future years’ cost impacts of higher taxes, new regulations, and Federal pressure to worship Al Gore’s gospel of global warming.

Short-term government stimulus spending has different impacts on employers in retail businesses who sell directly to final consumers, compared to intermediate goods producers, wholesalers, and transportation companies, as well as to capital goods producers, who make the equipment need by intermediate goods producers to turn out consumer products.

Each of those sectors has a different time horizon for hiring new workers and for augmenting production capacity.  At one extreme are oil refineries and steel mills that can be brought on stream only after many years of planning and haggling with environmental authorities.  At the opposite extreme is the mom and pop retailer who, as certain products are sold out, has only to call a wholesaler for next-day delivery.

The capital goods producer like Ford or Exxon must invest billions of dollars to build new manufacturing, refining, or mining and extraction facilities.  Those invested dollars must be recaptured via profits, generally over a 20-year period.  A short-term government stimulus program will have no measurable effect upon them.  What will have a big effect is the prospect of higher taxes and higher inflation created by Federal spending and Federal Reserve money creation.  Over the longer periods needed to amortize large new production plant costs, taxes and inflation can turn a present-day profitable investment into a long-term loser.

The result is that large manufacturers often are compelled to invest in new production overseas, where taxes and labor costs are lower.

To some extent, a government stimulus program in the short run will move existing goods off retailers’ shelves, but that doesn’t require hiring new workers.  Most businessmen that I have known would not hire new workers or re-hire laid-off workers in response to stimulus spending that they know will end in the relatively near future.  If demand for their products temporarily blips upward, they will simply add hours to work weeks of existing employees and find new and more efficient ways to increase production with the same number of employees.  This last, according to recent Federal Reserve business surveys, is precisely what is occurring and why productivity per man hour has risen measurably in recent months.  Higher productivity per worker increases business profits, even as sales volumes continue to disappoint, but does nothing to stop worker layoffs or to create new jobs.

Until individual and business savings return to levels sufficient to support long-term investment and consumer expenditures without credit card debt, businesses and consumers are likely to hold down spending, no matter what the Federal government spends on pork-barrel stimulus projects.  For the near term at least, business and individuals have learned their lesson about limitless spending with borrowed money, even though the Federal government has not.

We haven’t hit bottom yet.  Workers are still being laid off.  Businesses and consumers are still paying off debt. 

This is a far cry from Paul Krugman’s and President Obama’s promises about the magical effect of the largest pork-barrel stimulus bill in world history.