Last night I heard on the radio that, according to Fox News the Obama administration will plan a new cash for clunkers program. This time around instead of cash for old gas guzzlers, you’ll get cash for your old appliances. Now, at first glance this sounds like a reasonable short term spark for an otherwise stagnant economy. You see our economy isn’t necessarily in a recession, but unlike the economists who are bought and paid for by the administration like Eric Schmidt, Mark Zandi, and Warren Buffet, my economic forecasts are based on facts, not predictions or the over hyped Wall Street bubble that drive a tendency inside the beltway to proclaim the US economy back on track, it is not.
The cash for clunkers program failed, in fact the only economy it expanded were the economies of Japan, South Korea, and our chief competitor, and banker China. You see, the media hailed this “bright idea” as a big win for the Obama administration but the devil was in the details and apparently old scratch himself sought to rob thousands of propped up car dealerships throughout America by way of government spending. Car for clunkers took money out of the US economy instead of putting money back in. The majority of sales were of foreign made cars like Toyota and Honda, whereas the struggling GM and Chrysler failed to really take advantage of the government softball. This programs was specifically made for GM and other US car companies to iron out their weaknesses and they couldn’t even do that.
I’ve noticed something particularly the economic strategies of this administration. When it comes to the private sector, they’re oblivious, even downright ignorant to what it takes to expand the economy by growing the private sector which accounts for the vast majority of our growth. It’s the idea of central or general planning which became the hallmark of the former Soviet Empire and now Communist China.
Now, I’m not suggesting that Barack Obama is a totalitarian, but I am suggesting that he subscribes to the ideas of the former communist union. For example, the Soviet Union and China built their respective economies around the foundation of the state, by which controlled, determined, set, and create prices, goods, jobs, and services. Right now in China the communist regime controls industry, they control the manufacturing sector.
But in America such an experiment could destroy what is (for now) the greatest economic model in the history of the modern world. Our capitalist system developed from the same ideas and principles of our founding documents and traditions. The idea that individuals could determine their own economic destiny by way of hard work, an entrepreneurial spirit, and an environment where government protects these freedoms, not stifle them.
The central planning model of the old Soviet Union contradicts these principles, and yet the current administration and a far more progressive and leftist Democrat Party looks upon such a system as a pathway to an Americanized version of that soviet system. Are you still with me? Their intentions are clear: Government can plan our lives for us, in fact it can sustain excessive spending, higher taxes, limit rights, and decrease a deficit while it’s increasing the deficit all at the same time, oh by the way it can also expand our GDP.
It sounds irrational because it is irrational. But these programs have a lot riding on them because it they succeed in any measurable manner, they will make Obama’s argument for him. And thus the markers will be drawn for central planning.
I predict higher unemployment, and a stagnant economy through 2011. I also predict more economic illiteracy because it is becoming clear to many in America that this administration and this president, with all these so called experts and all these smart people around, don’t know how to create jobs.