Tags: obama | policies

Obama's Policies Are Failing

By Ronald Kessler   |   Monday, 20 Jul 2009 10:06 AM

Six months into his presidency, it’s clear that neither President Barack Obama’s economic plan nor his world peace plan is working.

After pushing Congress to pass the $787 billion stimulus, Obama has seen the unemployment rate rise from the 8 percent limit he predicted if the bill passed to 9.5 percent. After apologizing to the world for America’s imagined failings, Obama has seen Iran and North Korea continue their nuclear programs and become more even belligerent than when George Bush was president.

Behind Obama’s failure is a blind spot when it comes to understanding that people respond to incentives and disincentives. Funneling money through the federal government has no multiplier effect and does not give businesses incentives to expand and hire more people. Nor does sweet talking dictators give them any incentive to change their behavior.

If Obama had instead offered tax incentives, as the Republicans proposed, rather than planning to raise taxes, businesses would have felt more confident about hiring more workers. Instead, businessmen see nothing but gloom ahead — higher costs for health insurance and higher taxes, especially on small businesses, which account for the greatest job growth.

Looking at Obama’s approach, I am reminded of sitting in the dining room at the National Hotel in Moscow when writing my book “Moscow Station” during the Cold War. Since they were government employees, the waiters milled around and chatted in groups, ignoring my wife Pam and me. Why should they wait on us? They were paid by the Soviet Union regardless and got no tips. Their bosses had the same lack of incentive to do anything.

Instead of producing results, Obama has engaged in spin. While the administration promised immediate results, Obama is now saying the stimulus was meant to have an effect over two years. Even though more than 2.2 million jobs have been lost since he took office, Obama has said he saved or created jobs. But when asked in a congressional hearing whether such claims could be substantiated, Bureau of Labor Statistics Commissioner Keith Hall said flatly, “No. That would be a very difficult thing for anybody to substantiate.”

While Obama has claimed his health insurance plan would lower costs, the Congressional Budget Office has said it will actually raise costs and increase the nation’s debt. As a result of Obama’s wild spending spree, over the next decade, the public debt will rise from 41 percent of GDP in 2008 to an astounding 82 percent of GDP by 2019, according to the Congressional Budget Office.

Hardest hit by tax increases will be the highest-earning Americans, who are often small businesses which file taxes under Schedule C as individuals. The healthcare funding plan announced by House Democrats would push top tax rates, including state taxes, to 47 percent in some states and to as much as 55 percent in others.

Obama’s Robin Hood approach mirrors the anti-capitalist tenets of his former minister, the Rev. Jeremiah Wright Jr., and his church’s Black Value System, which denounced “our racist competitive society” and included the disavowal of the pursuit of “middle-classness.” The Black Value System defined “middle-classness” as a way American society seduced blacks into achieving economic success.

Obama hinted at the same thinking in a Sept. 6, 2001, radio interview, when he expressed regret that the Supreme Court hadn’t engaged in wealth redistribution. When Joe the plumber asked him about his plan to raise taxes on the wealthy who are often small business owners, Obama explained that it’s good to “spread the wealth around.”

Consistent with that approach, Obama’s tax plans would punish those who work hard to achieve and become successful. From the invention of the electric light bulb and the telephone to the development of the first personal computer, the profit motive has made America great. Yet for 20 years, Obama — brilliant though he is — listened to Wright denounce capitalism and free enterprise.

As outlined in the Newsmax article "The Media’s Blackout on Rev. Wright," during the campaign, the media refused for more than a year to expose Obama’s link to Wright. Now that polls show Obama is steadily losing support for his policies, which have turned out to be failures, the media may think twice about its dereliction of duty in not informing the American people of who Obama really is.

Ronald Kessler is chief Washington correspondent of Newsmax.com. View his previous reports and get his dispatches sent to you free via
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