Monday, October 18, 2010

Obama Behind the Curve

The problem with politicians is that they instinctively want to do the wrong thing. They want to increase spending, inflate the currency, and raise taxes.

There is one occasion when this makes sense, when the politicians are merely a guerrilla group in the jungle fighting a war of liberation. The American version of this is the Revolutionary War.

OK. There's one other occasion when it makes sense. It's when the nation is threatened by another power and has to fight a war.

My point is that the natural instinct of a politician is always the instinct of the guerrilla in the jungle. He needs money, so he requisitions from the peasants in the jungle. He needs to keep his supporters fed and happy, so he spends money on them. If he can, he borrows, up to the limit of the possible.

Obviously, in normal times, a government must do the opposite. It must pay down the debt run up in the previous war and it must forsake the feeding of its supporters for the general good.

Let's express all this in a law.

The instinct of governments is to spend money on their supporters, tax the money of everyone else, and borrow to the limit. The essence of good government is retrenchment in spending, reduction in taxes, and getting out of debt.

Now we see why President Obama is now behind the curve and why the rest of his single administration will be a horror show, not just for him but the whole American people. Let's rehearse the reasons for this:

Spending. Government spending in the 2000s was excessive because the Bush administration spent about $200 billion a year on the war on terror and ran an easy money policy at the same time. After getting over the Crash of 2008 the government needed to retrench on spending. Obama had an opportunity to do this in the winter and spring of 2009 and blame the whole thing on the Republicans. Even his progressive cohorts might have bought that. Instead, he unleashed the stimulus monster, and then the health care monster. That puts him behind the curve.

Taxes. Taxes are needed to fund the national debt, that's for sure, but mostly taxes are a charge upon the income of the American people. The more you raise in taxes, the more you waste the energy of the American people. Raising taxes in the middle of a lack-luster recovery is not going to help the economy and not going to help President Obama get elected. That puts the president behind the curve.

Debt. The only reason for a government to go into debt is to finance a war. Then, of course, it must raise taxes to pay down the debt. The current game of using debt to pay for social programs, and to promise social benefits far into the future is a policy that will end in tears. It will end in government debt default through "rescheduling" and inflation. That puts the president behind the curve.

This weekend I got to read the now famous New York Times Magazine piece on "The Education of a President." It showed to me a president and his inner circle focusing on tactics instead of grand strategy. Maybe they have a grand strategy but they aren't telling. Somehow I doubt it. The chatter in the article is all about the commonplaces of liberal governance: the programs, the legislation, the issues agenda.

But we are past all that now. We are entering a new era in which the shibboleths of the last century will not serve, not at the level of grand political strategic vision nor at the ground game of getting out the vote.

It has been well said that Obama is not a socialist, not an extremist. He is just a conventional liberal with the liberal faith in administrative government as a social model. But Obama and his people, and indeed the whole of liberal America, have no clue about any other vision of government, even when the Tea Party is staring him in the face. That is why the president seems to see himself running a conventional campaign against a conventional rival.

Somehow, I don't see the presidential election of 2012 being a conventional election. Somehow I see 2012 being an election about "America isn't working and liberalism is why."

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