Raleigh’s Barack Obama re-election headquarters News & Observer offers this unthoughtful, economically illiterate Obama droolfest of an article regarding our President’s “plan” to create jobs.
The N&O editorial board must live in some alternate universe in which centrally-planned economies manage to efficiently allocate scarce resources without trampling on individual liberty. Here are a few slices of the article:
The president’s call for a spending plan to boost job creation…..in a plan that would cost somewhere between $150 billion and $200 billion….he is encouraging the creation of jobs where it counts, at the local level, in small businesses that stand a chance to prosper (how does he know which businesses stand a chance to prosper, and why should he decide?)…It is the difference between patchwork and a careful rebuilding of an economic structure (the government can not rebuild economic structures, as if the economy is a tangible good)….But where are the ideas from the Republicans who were such strong supporters of allowing the free market to run wild and deregulation, etc., that helped dig the economic hole deeper? (Wow, they’re still married to that bumper-sticker deep cliche? They need to do a little research on the subject)……His plan is specific, targeted toward the people and businesses that can do the most to bring jobs back (Obama, of course, is brilliant enough to know precisely which people and businesses will do the most to bring jobs back) {Italics mine}
The repeated use of the word plan, and phrases such as “rebuilding the economic structure” (courtesy of government, of course) wreak of central planning. Of course, whatever Obama proposed would have been rubber-stamped by the starry-eyed N&O editors. Not one moment’s worth of critical thinking was applied to any of the specifics of the “plan.” As a service to the N&O, here are some questions (in italics) they may want to consider:
Obama would: strike capital gains taxes for those who invested in stocks in small companies next year and held the stock for at least five years; (what spending cuts would be proposed to offset this tax cut – and why is it just for investments made this year? Wouldn’t this distort investment decisions, serving to disrupt entrepreneurial decisions?) he would continue giving those small companies tax breaks for some expenditures, such as equipment; small businesses would get tax incentives if they hired new people; and those small firms would be forgiven fees that usually go with borrowing through the Small Business Administration. (how would these cuts be paid for? are these tax incentives temporary? after all, businesses decide to add workers and capital equipment with long-term returns in mind) In addition there would be billions of dollars worth of new construction projects and transportation improvements. (paid for with what money? what amount of scarce resources will be consumed by these projects, thus no longer available for productive investment that would create sustainable jobs?) Homeowners who make their houses more energy efficient would get rebates. (at whose expense? How much did Home Depot and Lowe’s give Obama to be repaid with this boondoggle?)
What is needed for economic recovery and thus new job creation, in part, is for the unsustainable capital investments that arose because of government interference in the marketplace to be liquidated or reassigned to other purposes in order to reflect consumer preferences. Asset values also need to be allowed to readjust to reflect their true market value. Such government “plans” divert resources to reflect political preferences, distort the value assigned to assets, interfere with the necessary reshuffling of capital goods and prolong the agony.
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