We have spent the past two years pursuing the policies that failed in the 1970s, such as large government interventions in labor and goods markets and the imposition of massive regulatory regimes intended to manage the economy from the top down. We’re ignoring the policies that succeeded in the 1980s that eventually provided the antidote to the Keynesianism of the Nixon-Ford-Carter years, and that touched off a massive expansion of the American economy.
The semi-annual review shows that the Obama administration still hasn’t learned its lesson. It’s akin to having a money-losing product but trying to convince the bank that you can make up the losses in volume sales. At its heart, Obamanomics holds a central flaw: the idea that government acts as a multiplier to capital rather than a diluter and destructor of capital. The more capital it confiscates for its central-planning economics, the less we have for real growth. Some government oversight is necessary to prevent fraud and theft, but even that doesn’t act as a multiplier for the capital it consumes; it’s merely the rational cost of doing business.
Barack Obama still hasn’t learned that, but the voters have begun to figure it out.