Saturday, November 08, 2008

Obamonomics in an Economic Crisis:
Be Very Afraid

Already President-Elect Barack Obama is hard at work putting together his administration. Depending upon whom you pay attention to, choosing Rahm Emanuel as chief of staff was either brilliant or not exactly what one would want from a man who says he wants unity in order to solve the nation’s problems.

Mr. Obama has said that the first thing he wants to do when he takes office in January is to fix the nation's current economic problem, and with that theme in mind convened his economic advisory board. Of the many controversies surrounding the Obama election platform, perhaps the most disturbing is his economic plan which, as Joe Wurzelbacher easily got Mr. Obama to admit, is solid redistributionist theory. The abject danger of the Obama economic plan was significant enough back in August when he secured the Democratic nomination, but in today’s crazy economic environment, it is downright frightening.

“The group, assembled to offer wide-ranging advice,” the New York Times tells us, “includes the billionaire investor Warren Buffett; [former Treasury secretary Lawrence] Summers and his predecessor, Robert E. Rubin; Paul A. Volcker, a former Federal Reserve chairman; and Eric E. Schmidt, the chief executive of Google.” Some knowledgeable people there, but then the Times tells us that two additional participants are on board, one of whom is Michigan Gov. Jennifer Granholm.

Let us hope that Ms. Granholm, as we hope with Mr. Obama, listens rather than talks in these meetings, as she, like Mr. Obama, can only contribute negative economic energy to any sensible discussion of what to do next. Evidence of this abounds, as demonstrated in a letter on Thursday urging Congressional leaders to get busy giving handouts to the states and the auto industry. Ms. Granholm wrote that “Michigan, and every state, needs swift action and leadership from Washington to address the short term challenges our national and state economies are facing.” Really: haven’t we had enough of that sort of thing?

It gets better. Or worse.

She expects Barack Obama and fellow Democrats to do for Michigan what she has failed to do as governor: straighten out Michigan’s economy.

Early on she took some positive steps to reduce a $3 billion shortfall in the $39 billion budget, cutting spending, but when that proved too little to fix the massive problem she then resorted to the failed liberal policies of raising taxes and blaming businesses. And in order to get elected, she called on President Bush to put a cap on oil company profits.

This isn’t the kind of advice that will make Barack Obama a successful president, unless being successful means converting our (mostly) free market capitalist system, the most successful economic system in history, into something that resembles Western Europe, which does not have the most successful economic systems in history.

Mr. Obama doesn’t look good in the early going.

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