You can’t call what Obama et al. are doing to the economy an honest mistake, because we have been down this road before, as have other countries like Germany.
Let’s see how Obama’s economic policies are faring at this point:
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.
Early in his misadministration, Obama tried to get Angela Merkel to jump into the abyss with him by joining his insane spending binge and the radical expansion of government it has purchased. Merkel wisely refused, probably having learned a lesson from German history.
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 set Germany on a path to freedom and prosperity on a Sunday, when the offices of the American occupation authorities were closed. Otherwise, his orders would have been countermanded, and the misery, stagnation, and poverty that characterized East Germany would have continued to extend to the France.
Maybe FDR and his Harvard whiz kids were so clueless that they thought the statist, Keynesian policies they used to hold us in a depression for a decade were helping somehow. But no informed person can say the same of our current rulers. By now the inevitable effect of excessive government on the economy is too well known.
Cross-posted at Moonbattery.