No, Really, Just Keep Your Hands Off the Economy
Democrats are licking their lips in anticipation of micro-managing the economy as soon as – or even before – Obama takes over the helm in January.
Although there is reason to assume that no one will listen to me (why? thought I was that naive?), the French Cowboy would like to tell the Dems: No. Just keep your hands off the economy. Or as Goldberg said it: “don’t just do something, President Obama, stand there.”
The economy works best when the rules under which it operates are stable or at least predictable. So it is unwise to just pull a bunch of levers without having a clue about which of them might actually have a positive effect. And this is the situation we are in now. Afraid of looking too passive (as if this had ever been a concern before) Obama wants a ‘stimulus’ plan to “jolt” the economy.
Obama has already signaled that he wants to make the US business climate a little less cozy for certain villains like ‘Big Oil’ – ‘windfall profits’ are for the people! – and companies with multinational strategies. In Obama’s view, if you are a US company then you better operate within US territory only. Anything else is worthy of financial punishment.
Concerning international trade, Obama has opined that free trade agreements with Columbia and South Korea, even NAFTA, are somehow not beneficial enough for the USA. He said that making a trade agreement with Columbia would be wrong because of the allegedly anti-union policies of Uribe. This statement which Obama has made during the last presidential debate is as stupid as it is offensive.
His promise to raise taxes on “the rich” gives reason to many small-business owners to scale back on expansion plans or even to cut the size of their businesses. Now famous Joe the Plumber’s option of buying the business he used to work for was made financially unattractive under Obama’s tax policy.
In sum, there are a bunch of companies that have little reason to cheer about Obama’s election because of his past statements. But with the economy in a not so happy condition – a state that was easy to be predicted months ago – Obama is now making noises about adjusting his original plans so as not to weigh the economy down even further.
Suddenly, tax increases on “the rich” may have to wait, deficit spending has become a necessary evil, and – who knows – maybe Big Oil may keep some of their ‘windfall profits’ – if they’re making any with the currently low price of oil.
So tell me again why the economy should quickly recover? The policies M Obama ran on just some weeks ago were full of “spread the wealth”-ism and probably reflected the true philosophy the president-elect has concerning economic policy. With actual responsibilty over a down-trodden economy in sight, Obama partly changes his plans and seems to favour a sort of costly Keyensian industrial policy.
The government has become a huge, unpredictable player and Democrats are eager to use the opportunity to impose rules on the private sector that would never get accepted under normal conditions. Even if the mingling of politicians will allow the economy to get out of this depression it will never be the same again. Government will leave a big footprint and long-lasting strings that came with tax payers’ money.
So just don’t overdo it, M Obama. Provide some financial assistance to those on the economic fringes, those who have to take the hardest hits in an economic downturn. But keep your hands off failing companies. Don’t impose rules on private actors to pursue a fancy idea of how the future would be so much better if only everyone just followed the plan. And don’t make everyone even more jumpy than they already are by creating more uncertainty through policy plans which you might revise any minute.
When news broke about the appointment of Tim Geithner as Secretary of the Treasury, the DOW gained 500 points. This was not because Geither is such a great guy. This was simply because one important factor of uncertainty had been eliminated.