Back in 2009, I got very excited when President Obama stated, “No business wants to invest in a place where the government skims 20 percent off the top.”
Did that mean he wanted to reduce America’s punitive and anti-competitive corporate tax burden? Or maybe even fix the entire tax code and install a simple and fair flat tax?
Unfortunately, it turns out the President was speaking to the Parliament of Ghana and apparently his recommendation for good policy didn’t apply inside the United States.
With this in mind, I’m not sure whether I should get too excited about his remarks yesterday that it is better to “let the market work on its own.”
Here are a few reasons why I am less than enthusiastic about this remarkable statement.
The President was not talking about solving the problem of government-caused third-party payer in health care.
Nor was he urging the elimination of the culture of bailouts and cronyism in the financial services sector.
And he obviously wasn’t saying it was time to end the government’s failed school monopoly.
Instead, when he said that we should “let the market work on its own,” he was referring to the very narrow issue of China’s production and distribution of certain minerals.
In other words, if presidential statements came with asterisks, the fine print at the bottom of the page would read “offer good in China only.”
However, a journey of a thousand miles begins with a first step. So if he thinks it’s a good idea to reduce government intervention in China, maybe someday he will apply the same wisdom to the American economy.
In previous posts, I’ve used data from the Minneapolis Federal Reserve Bank to show how Obamanomics is leading to very weak results, particularly compared to the economic boom triggered by Reaganomics.
So you can imagine how I was anxious to participate when U.S. News & World Report asked me to contribute my two cents to a debate panel on the question: “Is Obama Turning the Economy Around?“
Here’s part of what I wrote.
…we can hold the president at least partially responsible for an extraordinarily weak and slow recovery. It’s been nearly three years since the recession officially ended in June 2009, yet jobs are still well below their pre-recession levels. And overall economic output, or gross domestic product, has just now finally gotten back to where it was when the downturn began. This is an anemic record. Especially since an economy normally enjoys a strong bounce when coming out of a deep recession. The problem is that Obama has tried all the wrong policies. He tried a big-spending Keynesian package that was supposed to be a “stimulus,” but that’s the same failed approach that Bush tried in 2008, the same failed approach that Japan tried in the 1990s, and the same failed approach that Hoover and Roosevelt tried in the 1930s. Taking money out of the economy’s productive sector and letting politicians engage in a spending spree is the opposite of prudent policy. The president also has continuously expanded subsidies for unemployment, even though academic scholars (and even left-wing economists) all agree that such policies cause more joblessness. And now he’s demanding higher tax rates, holding a Sword of Damocles over entrepreneurs, investors, and small business owners.
By the way, you can impact this debate by voting to approve or disapprove of the various submissions. Just click here.
I did come out ahead (at least in online voting) in previous U.S. News & World Report debates, one on the desirability of double taxation and the other on the fiscal crisis in Europe and the United States.
I’d hate for that winning streak to come to an end.