Barack's Economics Reach A New Low, and It's Time for Him to Go

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In an economically-themed speech last week in Kansas, President Obama revealed for all to see just how divorced he is from reality, and why his departure from the White House in 2013 is essential. It's not that we can't recover from another Obama term - that's the easy part - but that as a serious nation we can't have a president who possesses such unserious views.  Call it a pride thing. 

Though Obama acknowledged up front the certain wonders of free markets, he only threw out the initial bouquet to decry those same unfettered markets. As he put it, "the free market has never been a free license to take whatever you can from whomever you can," as though those who participate in the marketplace on the way to great fortune somehow took from others in doing so. Really?

When I read about the members of the Forbes 400, I'm made aware of extraordinarily driven individuals who not only worked very hard to achieve their fortunes, but who also worked very smart. In doing so, and as evidenced by their grand wealth, they've made the lives of millions much better.

To list but a few members of this most exclusive group, I find Michael Dell whose eponymous computer company has made the once elusive and expensive personal computer cheap and ubiquitous, and then Amazon's Jeff Bezos, whose online retail innovations have animated the PC. I see Patrick Soon-Shiong, whose pharmaceutical genius has made the scourge that is cancer more survivable, and then I see people like Michael Milken whose financial wizardry democratized access to capital for the kind of entrepreneurs just mentioned.

The skeptical may well argue that Obama was targeting the rich Americans whose fortunes were somewhat maintained by the bank and auto bailouts of three years ago, not to mention the profligate individuals who purchased homes they couldn't afford only to be saved on the backs of prudent Americans who didn't commit such egregious errors. As Obama put it himself back in 2008, "Part of why our debt crisis is so bad is that some folks are making reckless decisions - racking up big credit card bills by purchasing flat-screen TVs and other luxury goods that they know they can't afford."

There Obama would have a point, but then it was the political class of which he's a prominent member that made the ghastly decision not long ago to excuse the mistakes of rich and poor alike, all of this paid for by the taxpayers.  As Obama put it in explaining his support for TARP in 2008, "Today I fully support the efforts of Secretary Paulson and Federal Reserve chairman Bernanke.  What we're looking at right now is to provide the Treasury and the Fed with as broad authority as necessary to stabilize markets and maintain credit." 

Translated, it was when politicians like Obama led our retreat away from free markets that politicians (and presidential candidates in Obama's case) gave themselves "license" to take from others. As the word "free" in free markets makes plain, the very unregulated markets that our president mocks ensure that no one is coerced; instead consenting individuals choose to transact with those offering them the best deal. The greater the profit the greater the unmet need fulfilled, and the Forbes 400 is full of bright business types who removed a great deal of unease from the lives of their customers and clients.

But rather than embrace the certain achievements of the rich in our midst whose wealth mirrors our betterment and constantly rising standards of living, Obama last week resumed his call for increasing the tax penalty levied on those whose innovations serve us. Supposedly raising the price of work for the rich will strengthen the middle class, but apparently not understood by Obama is that most of the members of the Forbes 400 were once firmly part of the middle class; their path out of the middle a function of their past ability to access capital from the very 1 percenters whose income the president would like to take more of.

Missed by Obama is that to penalize the success of the rich with taxes is to reduce the amount of investable capital for tomorrow's entrepreneurs who aspire to join the 1 percent. After that, and considering the tautological reality that the U.S.'s economic success is the certain result of the individuals who comprise the top 1 percent, is it a good idea when the economy is struggling to put more weights on the men and women with the greatest economic skills? If the previous question is hard to understand, readers might ask if the NFL would be better off economically if tomorrow Roger Goodell decreed that Aaron Rodgers, Tom Brady and Ben Roethlisberger had to throw with their left hands.

Further on Obama argued that rebuilding the economy "will require American business leaders to understand that their obligations don't just end with their shareholders." Nice rhetoric if you're a community organizer, but very much beneath a president whose stated objective is to improve the economic outlook. To put it very simply, the only obligation business leaders have is to please shareholders precisely because without shareholders there are no companies and there are no jobs.

Apparently Obama missed the above memo as evidenced by easily the most frightening part of his speech in which he noted that, "Over the last few decades, huge advances in technology have allowed businesses to do more with less, and made it easier for them to set up shop and hire workers anywhere in the world....Steel mills that needed 1,000 employees are now able to do the same work with 100, so that layoffs were too often permanent, not just a temporary part of the business cycle....If you were a bank teller or a phone operator or a travel agent, you saw many in your profession replaced by ATMs or the Internet." Missed by our most economically illiterate of presidents is that the very definition of the productivity that attracts the investment necessary for company formation and job creation is the process whereby companies figure out how to produce more with less in the way of labor inputs.

After that, would President Obama prefer that U.S. business remain static, and free of innovation? Can he name one economically successful country in the history of the world that grew to be that way by virtue of shielding itself from technological advancement? The personal computer has arguably destroyed more jobs than any technology in the history of mankind, thus begging the question of whether Obama would prefer that it not exist.

At present Obama rightly decries the lack of opportunity within our limping economy, but rather than look in the very mirror that would reveal his policies to be the problem, he continues to blame his admittedly hopeless predecessor, and then when that doesn't work, he fingers the rich and their allegedly low rates of taxation as the source of our economic ills. As Nietzsche once said, "No one is such a liar as the indignant man."

What's funny and sad at the same time is that Obama doesn't realize how easy he has it. To understand true difficulty, it's worthwhile to consider Germany in the aftermath of World War II when, after losing a generation of human capital along with nearly its entire infrastructure, many Germans were reduced to living in caves. Having inherited this spectacular disaster that made the hand that Obama was dealt look positively grand, Ludwig von Erhard slashed spending and taxes, then pegged the country's currency to a gold-defined dollar. Within three years a once destroyed country could claim one of the most powerful economies in the world.

In Obama's case he too has had three years, yet the economy that he inherited is in many ways much worse today. Looked at through the von Erhard prism, Obama did the opposite on the policy front with predictably negative results.  In short, the economic ill health that Obama properly bemoans can be directly correlated with the policies he's foisted on all of us. Obama's policy failures are our unemployment lines, and because they are, it's essential that voters relieve him of his presidential duties.

John Tamny is editor of RealClearMarkets, Political Economy editor at Forbes, a Senior Fellow in Economics at Reason Foundation, and a senior economic adviser to Toreador Research and Trading ( He's the author of Who Needs the Fed?: What Taylor Swift, Uber and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank (Encounter Books, 2016), along with Popular Economics: What the Rolling Stones, Downton Abbey, and LeBron James Can Teach You About Economics (Regnery, 2015). 

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