Blinded by big government, the Obama Depression is no accident
By Dr. Milton R. Wolf, The Washington Times
“The eye does not see what the mind does not know.” The difference between your patient’s life and death, my professors would warn, is what you see, and you cannot see what you do not know. Barack Obama cannot see a way out of America’s current economic malaise. He should ask the Germans what they know.Obamanomics has produced the weakest, most anemic recovery since the 1930s, when another generation’s big-government planners turned their great recession into the Great Depression. To be fair, President George W. Bush certainly did not give the best economic handoff - he too was addicted to spending - but to be clear, President Obama has unarguably fumbled the ball. He has, to borrow his own phrase, put his “boot on the neck” of American businesses with his increased taxes and regulatory burden; he has grown government with his wildly increased spending and outright take-overs; and he has weakened the dollar with his “quantitative easing” printing press.
The devastation caused by Obamanomics is now undeniable. According to Investors Business Daily, 2 million net private-sector jobs have been lost; unemployment has increased by 1.5 percentage points; long-term unemployment is the worst ever on record; the dollar is 12 percent weaker; the number of Americans on food stamps has increased by 37 percent; the Misery Index (unemployment plus inflation) has increased by 62 percent; and the national debt has exploded by an alarming 40 percent. Mr. Obama is on pace to saddle America with more job-killing debt than all the first 43 presidents - combined.
It didn’t have to be this way but Mr. Obama is trapped in the mistaken belief that America’s problems can only be solved by growing our government ever larger. When all you have is a hammer, everything looks like a nail.
In early 2009, before his unsuccessful attempt to bring the Olympics to Chicago, Mr. Obama failed at a far more consequential international lobbying effort: The president could not convince German Chancellor Angela Merkel to unleash yet another in the long stream of Keynesian “stimulus” spending schemes - and for good reason.
Admittedly, no two nations’ recessions are the same. Germany’s gross domestic product fell even more steeply than America’s but then again, the Germans didn’t have to contend with the likes of Rep. Barney Frank, Massachusetts Democrat, and then-Sen. Chris Dodd, Connecticut Democrat, sabotaging their housing market with government-imposed suicide mortgage loans. Today, however, while America’s economy is worsening, Germany has returned to pre-recession employment levels and their only “unexpected” economic news is the kind that beats expectations.
The real lessons from the Germans, however, comes not from the 21st century, but from the 20th. In the aftermath of World War II, a defeated and devastated Germany was under American occupation, controlled by Keynesian economists including the American price-control czar himself, John Kenneth Galbraith. The American overseers, as well as Germany’s new Social Democratic Party, favored maintaining the Nazi’s top-down, government-directed economy with its price and wage controls and restrictive regulations, which, unsurprisingly, created economic stagnation and crippling shortages of basic goods.
One bold German economist who understood the power of freedom dared to disagree. In a swift and masterful move on June 20, 1948 - a Sunday - economic director Ludwig Erhard freed the German market (and the people) by abolishing most of the restrictive price controls and other burdensome governmental regulations while he simultaneously solidified monetary policy with the introduction of the deutsche mark. The American Keynesians and German socialists were aghast but Erhard was quickly proven right.
Germany’s economy responded with a roar heard round the world. Within weeks, businesses sparked back to life and crippling shortages were eliminated. Within a year, the war-torn western zones united to become West Germany which quickly and overwhelmingly outpaced the Soviet-controlled East Germany. Within a decade, West Germany’s economy doubled, leaving behind Allied “winners” of the war, France and England, despite the Marshall Plan largesse these nations enjoyed. Within a half-century, the Berlin Wall crumbled and with it, the Soviet’s Evil Empire. This is the story of the “Wirtschaftswunder,” the German economic miracle.
Erhard courageously and almost single-handedly unshackled German citizens from the Nazi-inspired, socialist-endorsed and American Keynesian-imposed economic controls. He later confessed that he launched his plan on a Sunday, when the American occupation authorities’ offices were closed, because he was certain they would otherwise have countermanded his orders. Germans later made Erhard their chancellor but his lasting legacy is the German Miracle: a lesson of how free people in a free market, rather than an oversized and overbearing government, can rescue an economy - even one as devastated as post-war Germany‘s.
The lesson is right there for anyone who can see it.
Almost a century ago, Presidents Herbert Hoover and Franklin D. Roosevelt converted a great recession into the Great Depression with their big-government schemes. Similarly today, Mr. Obama has turned our Great Recession into the Obama Depression with his own - now old, tired and discredited - big-government schemes. Meanwhile, Mr. Obama cannot see the obvious lessons of the German Miracle: Unleash the free market, unshackle entrepreneurs and workers from big-government controls and we, the free people of the United States, can rescue our economy and create our own 21st century American Miracle.
Dr. Milton R. Wolf is a board-certified diagnostic radiologist and cousin of President Obama. He blogs at MiltonWolf.com.
No comments:
Post a Comment