Sunday, July 17, 2011
Who Benefits From All The Obama Spending Sprees?
Who Benefits From All The Obama Spending Sprees?
By Austin Hill
“Did you hear about the new ‘Obama Happy Meal Deal?’” a friend posted on Facebook earlier this week.
“You order whatever you want and as much as you want, and the person in line behind you has to pay for it….LOL!”
Americans have always enjoyed poking fun at their Presidents, and cheap jokes that illicit more groans than laughs aren’t to be taken too seriously. But, as is often the case with humor, there was a slight bit of truth entailed in this little online anecdote.
The joke suggests that, even among people who don’t think much about politics and public policy, or who don’t often utter words like ‘socialism,” “Marxism,” or “economic redistribution,” there is nonetheless a growing recognition that our President likes to spend other people’s money. And in light of this, we would all do well to ask a couple of questions.
Let’s start with this: “Where did all the stimulus money go?” What began in February of 2009 as a plan that the President said would “save or create 3 to 4 million jobs,” and what his Administration claimed would prevent our unemployment rate from rising over 8%, had an original price tag of $787 billion.
Months later the price of the “stimulus plan” had ballooned up to about $813 billion, and neither the Administration nor members of Congress could offer many details about it. By the end of 2009, both the fiscally conservative Congressman Jeff Flake (R-AZ), who voted against it, and the big government liberal Congressman Barney Frank (D-MA) who voted in favor of it, both admitted that there had not been proper oversight of how this enormous amount of taxpayer money had been spent (a fact that I documented in my latest book, “The Virtues Of Capitalism”). All this, as the unemployment rate continued to rise well above the 8% watermark.
So let’s ask this next: “Who benefits from the spending?” This is an especially painful question, because it’s easier to think in terms of who is not benefiting, and who is being harmed, by the spending.
Ethnic minority groups living in America’s inner city regions are most certainly not benefiting from the President’s wealth redistribution. As much as they may have superimposed their own expectations on to the President’s promises of “hope” and “change,” non-whites living in America’s urban centers are now experiencing some of the worst fallout of an economy that won’t expand.
Just last week an editorial by writer Walter Russell Mead, published in “The American Interest,” pointed out that Black America in particular is suffering under President Obama. Noting that some of the most staunchly Democrat states in the country – including Wisconsin, Michigan, and Minnesota – have produced some of the highest double-digit unemployment rates among Black Americans, Mead described our current era as one of “deepening alienation, anger, and despair in America’s inner cities.” Of course it is still not acceptable for elected Democrats to admit that the president’s “spending solutions” are harmful. Thus, Chicago Police Chief Gary McCarthy recently chose to blame the 2nd Amendment of the U.S. Constitution for the rising crime and unrest in his city, claiming that the right to “keep and bear arms” is an “extension of government sponsored racism.”
Americans who have maintained good credit scores and payment histories are most certainly not benefiting from President Obama’s wealth redistribution policies. The President insists that his Administration is providing “help” to borrowers who have fallen on hard times, but in reality the Administration has bailed-out banking institutions, and not individual people. We now have a financial system that is incentivized by our government to “forgive” portions of debt and to modify repayment terms for consumers with bad credit, while banks ignore credit-worthy consumers who pay their bills on time.
On the other hand, banks and the people who run them seem to be benefiting pretty well from President Obama’s spending. So do certain executive level folks at certain companies in certain other sectors of our economy. In fact, a new research project conducted by Capgemini and Bank of America shows that the world’s population of High Net Worth Individuals (HNWI) with $1 million or more in “investable assets” rose 8.3% over the previous year, to a total of 10.9 million people. This is to say that while President Obama’s policies are not “creating jobs,” a lot of personal wealth is being created for select individuals.
As much as President Obama has served up plenty of harsh criticisms for “overpaid executives” and “greedy companies” over the last three years, businesses and corporate executives that have politically allied themselves with him have, in many cases, been “blessed” by his spending of our money. For example, ABC News reported earlier this spring that “billions” of “stimulus dollars” have been handed-over to unionized construction companies, yet “shovel ready” infrastructure projects still haven’t emerged. More interestingly, many of these same companies owe the federal government unpaid taxes – but, they’re unionized.
If you’re on good political terms with President Obama, you may get to order “as much as you want.” If you’re second in line, you may have to pay for it all.
Oops I Forgot To Create Jobs: A Review Of Obamanomics
By Austin Hill
How seriously are we to take President Obama on economic matters? Is anybody still expecting him to “create jobs?”
Since the early days of his presidential bid in 2007, many have marveled at Barack Obama’s dulcet-toned voice and charming demeanor, while applauding at every word he utters – including what he says about the economy and employment. Now, roughly two and a half years into his presidency, it is painfully apparent that mere charisma and smooth talk don’t “create jobs.”
But why not? What, possibly, could have gone wrong? When Mr. Obama began his presidency in January of 2009 he noted that his “economic stimulus plan” would “save or create three to four million jobs.” Why hasn’t that happened?
The only plausible, reasonable answer to this question has to go something like this: in order for any economy to be sustainable, the majority of its employment opportunities absolutely must come from the for-profit, private sector of our economy. Sure, government agencies employ people too, but they should only employ people in numbers necessary for those agencies to provide essential basic services, and pay these employees commensurate with their private sector counterparts.
The most important thing government can do for the economy is to help to expand employment in the private sector, for-profit arena of our economy. And government can help make this happen, not by cajoling and manipulating and threatening businesses into “hiring,” but rather, by providing a stable and consistent regulatory environment, reasonably low tax rates to businesses and their investors, and encouraging free trade.
Unfortunately, both President Obama’s words and deeds have been hostile towards the private sector, while at the same time he has encouraged the expansion of the government sector. Thus here we are in July of 2011, with many government employees having their compensation and benefits packages expanded, as many private sector businesses continue to eliminate eliminate jobs. President Obama has said and done the opposite of what a President should be doing on economic matters, and – not surprisingly – he has produced the opposite of what we would all want.
If you think this is harsh or unfair, consider some of what the President has been saying over the last few years. Let’s start with this quote from August of 2008, when candidate Obama was speaking before a stadium full of his true believers.
Several American oil companies had just posted some robust profits, and the soon-to-be-President Obama seemed to think this was a bad thing. “First of all,” candidate Obama stated, “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…”
That was some great campaign rhetoric back then. But today we are in dire need of great policies from our President – and maligning American companies for being “too profitable” doesn’t incentivize them to grow.
Fast-forward to January 29th of 2009. Despite the economic decline, some of the nation’s largest financial and lending institutions had actually just posted some hefty profits, and had paid their executives bonuses. And once again President Obama chastised the achievement, stating “there will be time for them to make profits, and there will be time for them to get bonuses…now’s not that time, and that’s a message I intend to send directly to them..” Apparently, in Mr. Obama’s view, it is sometimes preferable for companies to be unprofitable – yet unprofitable companies don’t “create jobs.”
And here’s one of my favorites, from May of 2009. Speaking at the commencement exercises at Arizona State University, President Obama advised the new college graduates against private-sector success: “…You’re taught to chase after all the usual brass rings,” the President lamented. “Yah try to be on this ‘who’s who’ list or that ‘top 100 list’…ya chase after the big money, ya figure out how big your corner office is…ya worry about whether or not ya have a fancy enough title, or a fancy enough car…Now you can take that road, and it may work, for some. But at this critical juncture in our nation’s history, at this difficult time, let me suggest that such an approach won’t get you where you want to go. Did you study business? You can go start a company…or, why not go help a struggling not-for-profit find better and more effective ways to help folks in need?”
From there the President went on to extol the many virtues of “public service” – that is, becoming a government employee – and how important it is for people to become public school teachers. Yet he had nothing positive to say about how to create the wealth that funds the non-profit groups and that pays for the labor of the government employees.
Barack Obama is the President who loathes and chastises for-profit enterprise while praising and expanding government bureaucracies. Our current economic conditions provide a mirror image to the President’s vision.
To read another article by Austin Hill. click here.
Posted by Brett at 3:18 PM