All week long, President Obama has retreated into the populist rhetoric of his presidential campaign, laying out very clear battle lines, particularly on domestic policy. His steadfast opposition to extending the Bush tax cuts for top earners is clearly a political and partisan move. His economic policies are about using government to shore up the middle class (to get votes), steering the economy into favored industries, and “creating” jobs (often government jobs) for lower-income groups while penalizing wealth creation and private investment. This week’s economic-policy pronouncements have been about creating an economy and a populace more dependent on government.
As the New York Times reports:
Politically . . . the president is, in effect, daring Republicans to oppose the plan, in that way proving Democrats’ contention that they will block even their own ideas to deny Mr. Obama any victories.
And by proposing business tax breaks that, according to nonpartisan analyses, would do more to stimulate the economy than extending the Bush tax rates for the wealthy, Mr. Obama hopes to buttress Democrats’ opposition to extending those rates.
The Times should have emphasized that tax breaks to private businesses create financial dependency on government, which mutes dissent, and explicitly aim at bringing business policies in lockstep with federal policy. And of course, “nonpartisan analyses” are not necessarily correct analyses, as I pointed out in my critique of the econometric models that “showed” the stimulus package to have created millions of jobs while the private economy languished (see “Did the Feds End the Great Recession?”).
As we head into the midterm elections, it’s clear that Obama is rallying his political troops along a partisan, populist, anti-market, and anti-independent-private-sector line. As the leader of their party establishes the political boundaries for dissent, blue-dog Democrats are finding themselves out of luck. The real question is whether Republicans, or even pro-freedom third parties like the Libertarian party, will be able to seize the opportunity President Obama has handed them to rally their supporters to head off even greater expansions of government.