The Corner

Obama’s Economic Mirage

Robert Samuelson has a great article in this morning’s Washington Post. First, he reminds us of President Obama’s grandiose plan for our nation:

President Obama has made no secret of his vision for America’s 21st-century economy. We will lead the world in “green” technologies to stop global warming. Advancing medical breakthroughs will improve our well-being, control health spending and enable us to expand insurance coverage. These investments in energy and health care, as well as education, will revive the economy and create millions of well-paying new jobs for middle-class Americans.

Samuelson continues:

What Obama proposes is a “post-material economy.” He would de-emphasize the production of ever-more private goods and services, harnessing the economy to achieve broad social goals. In the process, he sets aside the standard logic of economic progress.

And then it makes a great case for why this is simply idiotic.  

Since the dawn of the Industrial Age, this has been simple: produce more with less. (“Productivity,” in economic jargon.) Mass markets developed for clothes, cars, computers and much more because declining costs expanded production. Living standards rose. By contrast, the logic of the “post-material economy” is just the opposite: Spend more and get less.

For more, read here.

By the way, Robert Samuelson has a fantastic book called The Great Inflation and Its Aftermath. Among other things, he explains how President Reagan and Federal Reserve head Paul Volcker tamed double-digit inflation in the 1980s and what an incredible victory this was. Watch this fascinating interview of the author by Reason TV’s Nick Gillespie here.

It brings a scary light to our current monetary policy, don’t you think?

Finally, for a bittersweet article about how Volcker is adjusting to a smaller-than expected role in the Obama administration, read this WSJ article.

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