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Is Obama's Intent to Cripple American Capitalism?
March 9, 2009
The title of Michael J. Boskin's March 6 Wall Street Journal Op Ed piece proposes that "Obama's Radicalism Is Killing the Dow." We might further ask, "Is that, in fact, the President's intention?"
When we watch the bumbling and thus far ineffective responses of the Obama administration to the current financial downturn, it's difficult to come up with an explanation as to why they've been unwilling to address the root causes of our economic problems. The President himself veers fairly dramatically from calling it a crisis that's about to turn into a catastrophe to uttering soothing words of encouragement about better economic times ahead. In light of this, the further question becomes, "What's at the bottom of the administration's apparent ineptitude?"
On the one hand, Obama himself, being a very left-leaning Democrat, may simply not understand what a market economy is. Those of us who do have at least a rudimentary understanding of capitalism often can't comprehend the liberal mentality. But in this case, it may be true that Obama simply does not understand how a market economy works.
Just last week the President referred to the Dow Jones Industrial Average as a "poll," comparing the Dow, it appears, to political opinion surveys the like of which he and his advisors use to triangulate their political positions. His remark seems to indicate that he simply doesn't realize that the DJIA is connected in a very real way to a market that collectively renders its judgment, on a moment-to-moment basis, about the state of the economy, and that it does this by tracking a representative sampling of the worth of thousands of companies whose stock is traded publicly. Perhaps the President is not aware that there are dozens of other such "polls" around the world that do much the same thing?
Obama apparently does not understand that, while the market sometimes renders temporarily inaccurate judgments, and that it's capable of being hoodwinked (as certainly happened in the overwrought leveraging that occurred following the Democrat-policy-induced housing derivatives run-up), it is for the most part a reliable forward-looking gauge of what knowledgeable people are willing to invest in. And the market's judgment seems to be that those people are overwhelmingly not willing to invest in companies that are likely to be affected by the new President's declared intention to control the market through his administration's increasingly collectivist economic policies. The smart money, money that would normally be invested in the market, is migrating "with extreme prejudice" to gold and cash. Preserving capital has become the intent of investors, and Obama ignores what they're telling him and his administration at his peril.
While virtually every economic policy of the new administration - from plans to increase taxes on income and capital gains to proposed cap and trade legislation to a significant increase in the money supply - promises to have a negative effect on the markets, there's another perhaps more disturbing component of the Obama economic policy, and that is that the President may genuinely hate America and what it stands for.
A number of political commentators have described the Obama administration as having a "collective chip on its shoulder," and his recent disgraceful treatment of Gordon Brown - the President apparently went to Netflix to pick out his gift to the British Prime Minister, this after he'd sent a bust of Winston Churchill back to Britain - was interpreted by Arthur Herman ("What's Behind Barack's Brit Snit," New York Post, March 9, 2009) as Obama's seeing the U.S.-Britain relationship as "a historical procession of self-serving white males." Indeed, the President's hostility toward capitalism and American democracy, coupled with his lack of understanding of how a capitalist economy works, very possibly figure into his every policy decision.
It can be argued that one of the aspects of Obama's enmity is that he's after nothing less than to cripple our capitalist economy. But since he apparently possesses at best a rudimentary understanding of how our economy works, he may simply not comprehend that America is the economic engine of the world and that if his administration, through its unsupportable spending, damaging policies, and rampant money creation, does manage to virtually bankrupt America, the other economies of the world will come to a grinding halt. If his policies are not stopped, and damn soon, there simply won't be wealth to redistribute.
Barack Obama, arguably ideologically blinded by his enmity toward America and his willful misapprehension of how a capitalist market economy works, seems to think that if he finds ways to take money from the rich and redistribute it to those less wealthy, well, the only consequences will be that the poor get wealthier while the wealthy get poorer. He may simply not understand that the creators of wealth, the capitalist businessmen and women, cannot function without the markets, and if their function is crippled, there will be no wealth to redistribute.