The Very Dangerous Folly of Obamanomics

The Very Dangerous Folly of Obamanomics
Austin Hill
Sun, Sep, 26, 2010

I have this certain sound byte in my computer, and I use it frequently on my daily talk shows.

The audio is over two years old -which means it might just as well be a half-century old, by contemporary electronic media standards – yet it is incredibly relevant today and will still be relevant in November.

The sound was derived from a video report of former Senator Barack Obama, campaigning for the presidency back in August of 2008. Speaking before a stadium full of energized fans and supporters, our future President begins to talk about a subject that was “top of mind” for most Americans two summers ago – the fact that the cost of gasoline was, at that time, approaching five dollars a gallon.

Shaking his head in disgust and disbelief and with a disdainful chuckle in his voice, Mr. Obama says, in part:

“…You’ve got oil companies making record profits…no… no companies in history have made the kind of profits the oil companies are makin’ right now…they..they…….one company, Exxon Mobil, made eleven billion dollars…billion, with a “b” ….last quarter….they made eleven billion dollars the quarter before that…makin’ money hand-over-fist…makin’ out like bandits…”

From here, then-Senator Obama went on to introduce his new “energy” proposal. As a remedy for rising gasoline prices, he wanted to raise taxes on oil companies, and use that “extra” tax revenue to give “working Americans” a thousand-dollar voucher that they could use to make gasoline purchases.

I played this sound byte several times on my daily talk show back in the summer of 2008, and pondered lots of questions about the Senator’s comments. “Why is Senator Obama so outraged about a company being successful and making a profit?” I asked my talk radio audience back then. “Will raising taxes on oil companies really make the price of gasoline drop, or might it make the price of gasoline rise?” “Why does Senator Obama compare the Exxon Mobil corporation to ‘bandits’– has the company stolen something?” “How will Mr. Obama define ‘working Americans,’ and how will he determine who qualifies a gasoline voucher?” “Who in America really ‘deserves’ free gasoline, and who does not?”

Back then, many Obama supporters responded to my questions about the Senator’s proposed “energy policy” with calls and email telling me that I was a “racist.” My questions and ideas obviously had no merit, and the only reason I didn’t approve of what Mr. Obama was proposing was because he is black, and I am white.

By the time Mr. Obama took office in 2009, the cost of gasoline had already begun to decline, which meant that, fortunately, discussions about his “gasoline voucher” program ended. But unfortunately for America, the same kind of illogic and childish assumptions that undergirded candidate Obama’s economic rhetoric in 2008 seem to have also guided President Obama’s fiscal and economic policies for the past twenty months. This is really “bad news” for America, and it is the reason why the Obama Democrats are so horribly disliked today.

From the campaign trail, Senator Obama liked to cast economic discussions into “the good guys versus the villains” scenarios. Thus, without any regard for what Exxon Mobil’s balance sheet looked like, with no consideration of the amount of capital that was risked and invested in any given quarter, without any consideration for the number of hours of human labor and toil deployed in any given quarter, and without any discussion about the fact that American oil companies are at the mercy of global oil prices, Senator Obama simply portrayed the Exxon Mobil company as a “villain” for earning a “record profit,” and he was going to be the “good guy” who would legislate money away from the oil company and give it to “us.”

Tragically, the rhetorical assumptions that drove Mr. Obama’s presidential campaign also seem to have driven the Obama Democrats’ legislative goals regarding healthcare. Just as candidate Obama demonized and vilified oil companies two years ago, President Obama and his party in Congress have successfully demonized healthcare providers and insurance companies, and we are now experiencing the devastating results of legislative attempts to force these allegedly villainous companies to be “nice.”

There’s no doubt that American health insurance companies can behave very badly, refusing to provide coverage to clients when they should. But the Obama Democrats have conveniently ignored the one thing that can incentivize insurance companies to behave better – if the insurance market was truly open and “competitive,” and insurance companies truly had to compete for clients, they would be forced to treat their clients better – and instead, the Party of Obama has legislated a mandate for companies to be “nice.”

The mandate to be “nice” is already driving-up the price of health insurance – insurance companies that are now forced to provide coverage to their clients’ “adult children,” are making-up for the additional costs they are incurring by charging more for all their policies. Thus, the Obama Democrats’ best effort to make health insurance “more affordable” is already failing.

Americans are learning once again that campaign rhetoric is no substitute for sound economics. And any American President who promises to make your life better by vilifying your fellow countryman, is a very dangerous character indeed.
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To read another article by Austin Hill, click here.