Obama declares Cargo Cult Economics is the way to go


If Ronald Reagan is remembered for “trickle down” economics, Barack Obama is going to be forever associated with cargo cult economics. Cargo cult economics is little more than government by the post hoc ergo propter hoc fallacy. If middle class families have X, then we can give everyone X and that makes them middle class. This is how I described it in an earlier post:


A good friend lives in Pittsburgh. We’ve know each other since the early 80s when we commanded rifle companies in the same battalion. Every year we get together a couple of time to catch up and maybe tell some new lies. A couple of years ago we were returning from an outing to Bushy Run Battlefield by way of Braddock, PA. Braddock was off the beaten path but I wanted to see what the battlefield looked like.

It was a depressing drive. One nondescript steel town ran into another without transition. The factories were shuttered. Gates locked. Storefronts covered with plywood. Those that weren’t boarded up represented the lowest imaginable rungs of goods and services. Nail salons. Tattoo parlors. Cheap shoes. Cheaper clothing.

And then there it was. A corner building in a dystopic urban setting and in it was an “arts center.”

“You’ve got to be [defecating] me,” I said, “an arts center in this war zone.”

“No,” my friend replied, “this is cargo cult economics. Because middle class areas have art centers they think if they build an arts center here it will make it middle class. They don’t realize that arts centers are created by people with wealth, they don’t create wealth themselves.”

This is what Obama proposed for the nation last night in his so-called State of the Union Address.

First — middle-class economics means helping working families feel more secure in a world of constant change. That means helping folks afford childcare, college, health care, a home, retirement — and my budget will address each of these issues, lowering the taxes of working families and putting thousands of dollars back into their pockets each year.


There is nothing in Obama’s plan that puts “thousands of dollars” in anyone’s pocket. Everything he proposes involves more federal spending which means more federal taxes. This tax burden will fall directly or indirectly on the middle and working class via depressed wages, fewer job opportunities, and increased government dependency.

And that’s why my plan will make quality childcare more available, and more affordable, for every middle-class and low-income family with young children in America — by creating more slots and a new tax cut of up to $3,000 per child, per year.

You can’t cut taxes and fund child care, quality or otherwise. Studies show that children who spend a lot of time in child care do not perform as well academically or socially as children who are not in institutional child care arrangements. The government’s flagship child care program, Head Start, has been demonstrated by controlled studies over a period of decades to range from ineffective to harmful.

And since paid sick leave won where it was on the ballot last November, let’s put it to a vote right here in Washington. Send me a bill that gives every worker in America the opportunity to earn seven days of paid sick leave.

Because a mandate for health insurance has encouraged employers to hire like gangbusters let’s go ahead and create another mandate. Paid vacation, paid sick leave, and paid holidays are nice. I love me some paid time off. But they are expensive and someone has to pay for it. If the employer can’t pass this increased cost and lost productivity on to the customer they will do the next most logical thing: reduce their workforce. But prosperous people get paid time off, so let’s spread some of that prosperity around.


It goes on and on. Obama’s entire economic plan is based on the idea that you can achieve prosperity for everyone if you simply buy enough stuff that prosperous people have. In a culture that is focused on immediate gratification in every facet of life, his agenda will appeal to a lot of people. Not only is it horrible governance it is a fraud from its inception.



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