President Barack Obama walked into the Oval Office in January 2009 during a severe economic downturn led by a meltdown in housing prices – and promptly made things worse.
By bailing out banks, insurance companies and auto firms – done to a lesser extent by the previous administration – Obama rewarded poor performers and punished their better-managed competitors. Prevented from pouncing on wounded rivals and thus increasing market share or buying the assets of the wounded at fire sale prices, Ford, for example, watched GM and Chrysler get a cash infusion from taxpayers. Despite GM’s recent “successful” public offering, taxpayers lost billions of dollars.
Obama and the Democratic congressional supermajorities passed a nearly trillion-dollar economic “stimulus” package and then proceeded to award fiscally irresponsible states with “stimulus” funds, helping postpone the day of reckoning when states must meet their budgets by reducing spending and cutting the size of government. Stimulus supposedly “saved or created” 3.5 million jobs, but it merely succeeded in transferring money from the pockets of producer taxpayers into the pockets of others.
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Obama spends billions to “invest” in mythical “green jobs of the future.” Investing is the job of the private sector, which uses private funds to produce a product that addresses a need or desire. Success is determined by the willingness of the consumer to pay good money for said product. A bad bet means somebody loses his own money – a possibility that the private investor weighed before he chose to risk his capital.
But government “investments” are driven by politics, with decisions made by bureaucrats operating under rosy scenarios with romantic wish lists. When taxpayer money goes down a rathole – as is far more likely than with privately invested money – nobody gets fired, but the country is impoverished a little bit more.
Obamacare puts 30 million Americans on the rolls of the medically insured. Since its passage, insurance companies – citing the cost of Obamacare mandates, rules and regulations – jacked up their premiums and cut coverage. Over 100 waivers have been granted to companies and organizations that, but for these waivers, would have had to drop coverage, increase copays or reduce medical benefits. Nice to have friends in high places.
The AARP, a staunch proponent of Obamacare, announced a reduction in benefits for its own employees, lest the tax kick in for so-called “Cadillac plans.” To “bend the cost curve,” Obamacare promised cuts in Medicare reimbursement. So doctors are dropping their Medicare patients.
The administration signed into law new banking and financial regulations that keep intact the very government agencies that helped precipitate the housing meltdown – Freddie Mac and Fannie Mae. Under policies aimed at allowing everyone with a pulse and a dream to buy a home, these “government-sponsored entities” allowed the players in the housing market – banks, borrowers, investment banks and buyers of “exotic securities” – to play with taxpayer money.
The Obama administration’s various government efforts to “keep homeowners in their homes” are floundering, serving only to postpone the necessary market re-pricing of homes that are now worth less than they once were. Cash for Clunkers induced people who were going to buy cars anyway into making their purchases earlier. When the program ended, car buying slumped. The result was more taxpayer dollars removed from the hands of producers and put into the hands of recipients.
The administration, with some Republican support, increased the minimum wage and several times extended unemployment compensation – both well-intended policies, but job killers nonetheless.
Obama promised to raise taxes on the rich, who, under Bush, got tax cuts they “didn’t need” and “didn’t ask for.” So the rich sit on their money, not knowing whether they will be allowed to spend or save or invest it – or whether Washington has other ideas. Most Bush-era tax cuts expire at the end of the year, and if not extended, rates will go up on income, capital gains, dividends and estates.
The recent Republican takeover of the House and loss of the Senate’s Democratic supermajority likely mean that the rates will be extended for all – including the dastardly, job-creating rich. But businesspeople cannot plan – and are thus reluctant to hire – until they know whether their taxes are going to increase.
Candidate Obama demagogued against trade agreements that “shipped jobs overseas,” and promised to tweak the Bush administration-negotiated treaty with South Korea. According to the U.S. Chamber of Commerce, the pact would create 250,000 jobs in America and it would open up exports to a NAFTA-sized market. But during his recent trip to Asia, Obama failed to get the South Koreans to go along with his changes aimed at benefiting the American auto and beef industries. The South Koreans said no, insisting that they had a deal and that if the U.S. won’t do business with them, other countries will.
For two years, Obama has practiced Obamalism: Spread the wealth; redistribute income; punish success; reward ineptitude; and encourage the victicrat-entitlement mentality by making the lack of health insurance the responsibility of others.