Obama's Economic Oboondoggle

President-elect Barack Obama appears to have made some moves to the political right economically. But he remains a liberal, and what he really is going to do over the next few years is a Reverse Washington Monument Ploy.


What is that?


Well, more on that further down.


To start, let’s look at what he has said he is going to do, in three separate proposals:


First, right after his election, Obama said he was going to “create” 2 million new jobs in 2009. That is nonsense. The president does not “create” jobs. Jobs are created by private businesses across the nation, and it takes time, capital and patience to create those jobs.


The best that Obama could hope for in such a short time was to “fund” 2 million new jobs with government money, which is easy to do. But once that money runs out, the jobs will end. And that is the difference between “creating” 2 million jobs in the private sector that will be sustained for years, and simply handing out enough government money to pay 2 million people to do things that Obama prescribes.


Why would Obama use government money rather than allowing the private sector to create those jobs?


This difference is time and ideology.


If he were patient and more conservative, he would be willing to give tax cuts to businesses and corporations to create new jobs by investing in their products and plants, creating long-term sustainable employment. But Obama has no time for that. He is in a hurry to curry favor with the public and the media to make a big splash in “creating” 2 million jobs so that people will think he is an effective leader. And he will do that only by adding to the national debt dollar for dollar, whatever amount his plan requires.


In this original plan to “create” 2 million jobs, there has been talk of up to $1 trillion in so-called government stimulus spending. With the government already handing out money by the fistful, Obama sees a way to sock the taxpayers even harder than usual while acting like he really cares about jobs. This is part of the Democrat strategy to gradually weaken the private sector.


So let’s say Obama goes ahead with his $1 trillion stimulus. He starts handing out billions here and there for this and that. This is where the Reverse Washington Monument Ploy comes in to play. 


First, you have to know what the Washington Monument Ploy is to begin with. It works like this: Imagine the city of Washington, DC is strapped for cash. Rather than throwing 10,000 deadbeats off the city dole or firing hundreds of useless, overpaid city bureaucrats, officials decide to shut down a highly visible symbol like the Washington Monument, saying that the city cannot afford to keep it open. Since the Monument is an emotional and highly visible symbol, the public gets angry and upset, and agrees to a tax increase so that the Monument does not have to be closed again.


Meanwhile, the city continues to waste money like a madman and the Ploy succeeds. The Ploy can include laying off cops or firefighters or teachers, or cuts in any crucial service that can be used to create a panic in the population, and lead to a call for new taxes to “solve” the problem.


It won’t.


But rather than cut crucial services as the original Ploy calls for, the Reverse Ploy will start to fund non-crucial programs like bike trails, tree plantings, tennis courts, bridges to nowhere and light-rail mass transit that nobody will use. And using government money, that spending must by law pay workers inflated union wages as required under the Davis-Bacon Act of 1936.


The Reverse Ploy comes into full effect when the public sees that its essential road and bridge repairs still have not been done. This will cause an outcry and then Obama will seek another huge dose of spending on roads and bridges so that the public feels that the plan is working.


All in all, it will represent a massive jump in federal spending. This plan will create zero long-term jobs, however, because a genuine rebound only will happen over time by the creation of jobs in the private sector. FDR implemented make-work government spending in the 1930s, and it made the depression longer and deeper.


Then Obama changed his plan.


Second, after originally saying he would “create” 2 million jobs, Obama said in December that he was going to “save or create” 3 million jobs in 2009.


By “save or create” 3 million jobs, Obama meant that he was planning to save jobs the same way he has been planning to “create” his 2 million jobs in the first place – by handing out hundred of billions in government cash, this time to include the Big 3 automakers so that they do not go bankrupt and put 3 million people out of work. That is the estimated number of people who could lose their jobs in the industry and in related employment if the Big 3 went under.


Most importantly, those “saved” jobs would include all those unionized $70-an-hour United Auto Worker assembly line employees who have conceded virtually nothing in all these negotiations, waiting for Obama to come along. And in return, every million in union pockets represents thousands of dollars kicked back to the Democrat party in future elections. This handout will do zero to make the car companies sustainable, but instead will entrench inefficiency.


OK, now Obama has a third plan announced January 5 to “create” 3 million jobs, with 2.4 million in the private sector and 600,000 in government. It includes $100 billion in business tax cuts and federal tax rebates for individuals of $500 or $1,000 for families. That includes, by the way, checks for people who pay no federal taxes (i.e., welfare).


Phew, this is getting confusing!


This will be another disaster. We do not need this huge increase in government employment. The taxation and inefficiency in the creation of 600,000 government jobs alone will thwart private-sector job creation. Just because he now says he’s going to create 2.4 million private-sector jobs does not mean he will be able to do it. The business tax cuts are minimal and the individual tax credits are a pittance. Their effect will be short-lived.


The basic flaw in Obama’s ideas are that he is in a big hurry to fix something that took years to create. George Bush gave $150 billion in individual rebates in the Spring of 2008 and the effects were short-lived. If Obama continues to think that 2.4 million private-sector jobs are going to even begin to appear, he must go truly conservative, cut business taxes big-time and long-term on the federal level and urge no-growth Democrat states like Massachusetts and New Jersey to adopt job-creation policies rather than restraining job growth.


From 2000 to 2007, for instance, the government of the state of New Jersey added 54,800 jobs which was a whopping 93% of all the jobs created in New Jersey, which is one of the highest-taxed and most Democrat states in the union. According to the Tax Foundation, New Jersey has the worst business climate in America. Its pitiful private-sector job-creation numbers in those 7 years – about 800 jobs per year average – come in a state with more than 8.5 million population! Along with terrible numbers in other liberal bastions, the national picture looks really bad, leading to calls for… more government spending.




Obama actually is hoping to do an FDR, to lull the public into thinking things are getting better so that he gets re-elected in 2012. If he does, he will be on his way to truly re-making America in the socialist mold that we all have been warned about from the economy, to the legal system to the national security apparatus. We must not allow that to happen.


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