Could it be?
The conventional wisdom is that Obama, with strong majorities in both houses of Congress, will get every legislative initiative he wants. And from a sheer vote counting viewpoint, that would certainly be true.
But could the countervailing force not be the oft-spineless Republicans with their limited votes in Congress?
Could the real counter come from the financial markets themselves, which sense both the magnitude of the economic downturn and how Obama’s proposed statist solutions will only compound the problems and adversely impact any recovery?
Consider this stock trend.
So is it a race between a financial market collapse, accelerated by its reaction to Obama’s policy proposals, and Obama’s aggressive and statist policy implementation effort?
Will the financial markets then be the force which galvanizes a broad reaction from the American people? Remember, the last time we had a downturn this deep was at the beginning of the 1980’s and 401(k)’s weren’t in place yet so the average American had far less at stake financially.
(The underlying philosophical issues on why Obama’s policies are wrong are here.)
And, if you don’t think the American people are beginning to pick up on it, read further down the earlier link and consider how rapidly the idea of going-John-Galt has spread.
Incentives matter deeply and drive human behavior. It is a lesson statists and socialists never learn.
It’s all enough to make you shrug, isn’t it?
Will Wilkinson reflects on Obama’s dilemma, which some of us believe is being reflected in the declining stock market prices:
The upshot is that if you want to reduce inequality through redistribution, tax progressivity barely helps. You need to take a huge chunk of GDP in taxes in order to finance progressive spending. The more general, sort of obvious point is that if you want to massively increase government spending, the government needs a lot more revenue. But you can take everything from the rich and you still won’t have enough. So you’ve got to massively increase taxation on the middle class. The best way to do this is through a consumption tax. But Obama keeps reinforcing, again and again, that middle-class tax rates won’t rise, as if this is itself a matter of justice. So where’s all the money going to come from to do all these amazing things? Eventually, it’s a huge increase in taxes for the middle class or nothing. This may not be a big political winner.
The progressivity of the American tax system puts big-spending progressives in a bind. They should want a consumption tax with a huge, wide base. The easiest way for government to devour ever-larger chunks of economic output is through the device of a slow series of very small rate increases on a broad base. The smaller the tax base, the more dramatically you have to hike rates in order to significantly increase revenue. But dramatically hiking rates tends to discourage political buy-in from those who must pay. Indeed, it tends to incite heated resistance. Obama did very well with the rich. But that may not last if he hits them as hard as it looks like he’s aiming to. At the very least, pushback from this very powerful bloc of voters will limit his success in raising rates at the top….But even the large [increases on the small tax base] leave him massively short. And government spending cannot be debt-financed forever. And he can only inflate so much of it away.
…Democratic strategists need to be looking at clever ways for the government to take a lot more money away from middle-class families without thereby making the GOP look golden again. Obama’s been behaving as though he’s much less fiscally constrained than he really is. But by catering to the idea that middle-class taxes shouldn’t ever go up, he’s making it even tougher on himself. Unless he’s in the middle of some kind of ten-steps-ahead rope-a-dope wherein reaffirming the middle class’ right to not pay taxes is a way of softening them up to accept huge tax increases, he may be making a mistake.
Even David Brooks is disillusioned by Obama’s proposals:
…But the Obama budget is more than just the sum of its parts. There is, entailed in it, a promiscuous unwillingness to set priorities and accept trade-offs. There is evidence of a party swept up in its own revolutionary fervor — caught up in the self-flattering belief that history has called upon it to solve all problems at once.
So programs are piled on top of each other and we wind up with a gargantuan $3.6 trillion budget. We end up with deficits that, when considered realistically, are $1 trillion a year and stretch as far as the eye can see. We end up with an agenda that is unexceptional in its parts but that, when taken as a whole, represents a social-engineering experiment that is entirely new.
The U.S. has never been a society riven by class resentment. Yet the Obama budget is predicated on a class divide. The president issued a read-my-lips pledge that no new burdens will fall on 95 percent of the American people. All the costs will be borne by the rich and all benefits redistributed downward.
The U.S. has always been a decentralized nation, skeptical of top-down planning. Yet, the current administration concentrates enormous power in Washington, while plan after plan emanates from a small group of understaffed experts.
The U.S. has always had vibrant neighborhood associations. But in its very first budget, the Obama administration raises the cost of charitable giving. It punishes civic activism and expands state intervention.
The U.S. has traditionally had a relatively limited central government. But federal spending as a share of G.D.P. is zooming from its modern norm of 20 percent to an unacknowledged level somewhere far beyond…
The first task will be to block the excesses of unchecked liberalism. In the past weeks, Democrats have legislated provisions to dilute welfare reform, restrict the inflow of skilled immigrants and gut a voucher program designed for poor students. It will be up to moderates to raise the alarms against these ideological outrages.
But beyond that, moderates will have to sketch out an alternative vision…This is a vision of a nation that does not try to build prosperity on a foundation of debt. This is a vision that puts competitiveness and growth first, not redistribution first.
Moderates are going to have to try to tamp down the polarizing warfare that is sure to flow from Obama’s über-partisan budget. They will have to face fiscal realities honestly and not base revenue projections on rosy scenarios of a shallow recession and robust growth next year.
They will have to take the economic crisis seriously and not use it as a cue to focus on every other problem under the sun…
Malkin ridicules Brooks here.
Amateur hour at the White House. Obama thinks a monotonically decreasing price level is a gyration. What a sense of economic insight. Follow the links, especially the WSJ editorial.
More on the budget here.
Meanwhile Jennifer Rubin responds to White House nonsense and includes a quote from investor (and former Obama supporter) Jim Cramer:
Until the Obama administration starts listening, until they start paying attention to what you’re watching, to the stock market, until they realize that their agenda is destroying the life savings of millions of Americans, then all I can give you is caution. … I just want some sign that Obama realizes the market is totally falling apart. And that his agenda has a big hand in that happening.