Much has been written about how political campaigns have degenerated into ugly personal attacks against one or both of the candidates in an attempt to gain political office. This type of politics has been dubbed the "Politics of Personal Destruction."
This time around we are seeing an even more ugly form of politics which can only be labeled the "Politics of Economic Destruction."
While the politics of personal destruction may tarnish or destroy the reputation of a particular candidate for political office, the politics of economic destruction has put millions of Americans and their families at risk for the political fortunes of President Barack Obama. Barack Obama inherited one of the most difficult economies in decades when he entered office in January 2009. He entered office knowing this. He sold us on the promise that his brand of hope and change would make every American better off. In the past nearly three years since Obama has taken office, we have seen the economy deteriorate even more. While Barack Obama took the office by choice on the promise he could fix the economy, he continues to blame George Bush for his policy failures.
The poster child of his economic failures may well be Solyndra, the solar energy company that went bankrupt after receiving a half billion dollar federal loan guarantee while becoming President Obama's personal pick as the type of company that would embody his vision of economic hope and change. In addition to Mr. Obama losing a half of billion hard earned taxpayer dollars on Solyndra, the unemployment rate, lack of capital investment, and the volatile and steeply declining stock market are the fruits of his financial policies. The most economically destructive of all his policies, Obama Care, will create economic havoc for generations to come.
Now after months of trying to convince America that we have turned the corner to a better economy, Barack Obama has flip flopped and called the current economic situation a national crisis that could only be fixed by his second round of stimulus spending. This second round of stimulus has upped the ante on the "Politics of Economic Destruction." Obama's risk taking with the American economy with this second round of proposed stimulus spending has taken us to the precipice of a generation or more of financial ruin. This he has done in an effort to get re-elected to a second term. To demonstrate this, consider the following.
The U.S. economy is the largest and most complex economic system in history. Natural phenomena of this complex system are the economic upturns and downturns known as business cycles. Business cycles come and go with a degree of regularity and various levels of duration and steepness. Barack Obama and his economic advisors know that typical downturn in a cycle will likely last less than two years.
They also know that since the economy is so large and complex, that despite any policy action they take, the economy is likely to recover from them on its own after two or so years. Now from his knowledge of business cycles, Barack Obama understands that during an economic downturn he needs to pass some fiscal legislation before the upturn so he can take credit that his policy brought about the upturn that would have occurred anyway. This ensures he gets credit for the improvement and greatly increases his odds for reelection.
Because of the size and complexity of the U.S. economy, past fiscal legislation passed by other presidents, would take the hard edges off of the downturns rather than reversing them. There has however, at this moment in history, been a perfect storm of negative economic events that has resulted in government financial policies having a greater impact for good or bad on the steepness and duration of the business cycle.
The first of these unfortunate perfect storm occurrences is the housing bubble resulting from the easy credit policies passed by the democratic controlled congress during the Bush years. This policy resulted in more toxic mortgage loan assets than anyone could have possibly imagined. Second, the economy of the US continues to become more global over time and is affected more profoundly by economic downturns in Europe.
The U.S. housing crisis was unfortunately timed with the European financial crisis. These two events negatively reinforced each other creating a synergistically larger downturn.
The third rail of economic crisis was ObamaCare. This overly ambitious and expensive program could barely be afforded during the most robust economies. Yet, it was passed while Obama was claiming he inherited from Bush the worst economy since the great depression.
This perfect storm of economic negatives was the backdrop for Obama's first stimulus program. In his haste to implement his ideological big-government financial policies prior to an expected upturn in the business cycle, he signed us up for the greatest amount of debt the world has known. The U.S. had to borrow the money from China since European financial markets were in chaos. This borrowed money was wasted on non-stimulative low priority expense-type spending. There is nothing to show for it while we still have years of future debt payments. This wasteful spending was designed to ingratiate him to the beneficiaries of spending. Instead, what was needed were infusions of equity funds by wealthy business owners applied toward capital investment. Obama wasn't worried because he expected the upturn in the business cycle to bail him out. That upturn did not come when expected in large part due to his policies.
Now Obama wants a second round of stimulus because he has realized the hoped for upturn didn't occur soon enough so his first stimulus plan could be credited for fixing the economy. This time he wants to raise taxes on wealthy business owners who could turn our financial fortunes around if they made equity investments in the economy. Obama's raising their taxes will divert this equity capital from being able to be used in highly stimulative ways to round-two of failed and wasteful government expense spending.
Obama is betting the upturn will occur before next year's election. He needs the second stimulus package so he can claim credit for the upturn when it occurs as it inevitably does. He is desperate for a second stimulus package and has now turned to class warfare. Obama is vilifying the wealthy for not paying their fair share in taxes to pay for it.
If he is wrong, the U.S. moves closer to the precipice of financial ruin for the next generation. For personal political benefit, he has engaged in the high risk and dangerous game of the "Politics of Economic Destruction" where the losers are the American people.
Dickson is a retired executive in the energy and natural resources sector who lives in Pleasant View.