Obama’s Economic Quackery
Obama has learned how to turn a natural recovery into a serial slowdown.


Victor Davis Hanson

Sometimes the wrong medicine can make a struggling patient far sicker than he would have been had he been allowed to recover naturally. Western medicine began with the premise that the physician either must know how to cure the patient or simply leave him alone — but above all not make him worse through harmful treatment.

As 2011 ends, we have discovered how to turn a natural recovery from a near-record recession into a serial slowdown. Almost every haphazard, ad hoc attempt by Barack Obama to jumpstart the economy has only further stalled it. The president has never articulated a diagnosis of why the economy was stalled, never outlined a coherent treatment plan, and so cannot offer a prognosis. If we have a sick budget, a Byzantine tax code, bankrupting entitlements and long-term debt burden, and a costly imported-oil bill, one would never know all that from the president, who has never offered any sort of plan for addressing these crises.

Borrowing over $4 trillion terrified investors and business owners — especially given campaign promises that Obama would not be so “unpatriotic” as to match in three years the debt that Bush had piled up in eight. After all, no one could accuse the Bush administration of having left the economy moribund by slashing government, running balanced or surplus budgets, reducing the national debt, and in tight-fisted fashion denying federal bailouts to reckless banks and Wall Street firms. Apparently, Barack Obama saw the Bush administration’s economic transgressions not as warnings, but as a green light to borrow and spend even more on a predetermined redistributive agenda (“Never let a crisis go to waste”) — as if once a Republican administration had trespassed, conservatives could hardly throw stones at even greater sinners.

Government’s “shovel-ready” projects proved chimaeras — as if anyone could ever believe that tenured bureaucrats could spend such vast borrowed sums as efficiently as millions of private individuals responsible for their own success or failure. The irony is that drilling for more American gas and oil would, in fact, both be shovel-ready job stimulus and cost the government almost nothing; however, this was unacceptable given the opposition of the green insiders and the likelihood that corporations would profit.

Extending food stamps and unemployment benefits to record levels might in theory have sounded humane, but it eroded incentives, depressed the dependent recipients, and created no new jobs. Such gargantuan new expenditures were about as effective in combatting unemployment as prescribing a third round of antibiotics for a resistant strain of infection. A theme in many of Obama’s vast new spending schemes is that we are all supposed to believe publicly that the new largesse is the right thing to do, even if we privately shrug that it inevitably ensures quite the opposite result, given unchanging human nature.

Blaming sluggish growth on everything from ATM machines, tsunamis, and the Europeans to private-jet owners and the top 1 percent of taxpayers only reminded the general public how little those in charge knew what was going on, and reminded the particular targets why they were smart to hoard cash, not buy, and not hire — in fear of new taxes, new regulations, new costs like Obamacare, and a new antagonism from an accusatory commander-in-chief himself. Blaming the patient — uncompetitive, soft, lazy — is the worst thing a doctor can do.

If one were trying to dream up a way for the Energy Department to ensure fewer jobs, less energy, and higher costs, it would be hard to match the record of Secretary Chu. We have spent billions subsidizing inefficient solar- and wind-power companies with political connections; the results have been little or no new energy, but lots more federal debt. Thanks to Obama, the “alternative energy” industry is now discredited, as “millions of green jobs” have been downgraded to the status of “stimulus” and “investments.” Apparently, when crony capitalists and insider con men put the word “green” in front of their schemes, we are supposed to suspend moral judgment, as if they purchased medieval indulgences exempting them from scrutiny