When Obama was first elected, I told a friend that he was a fascist—not in the standard Leftist-diatribe sense, where it means “someone I don’t like,” but in the sense of someone who differs from communists in allowing much of the economy to remain in private hands while nevertheless forcing it to conform to government direction. The State of the Union address offered further confirmation of that thesis, if any is needed. Clark Judge nails it:
But let me get this straight: 1) banks will be punished (do I understand this right, by a committee headed by Eric Holder?) if their lending is too risky, 2) and they will be required (by the same committee) to give more home loans (meaning, it must be, to people who would otherwise not qualify for the loans, or else the government would not have to be involved) at lower rates (which means rates that do not compensate them as much as the market says they need to be compensated for the risks they are taking, all of which sounds like a new edition of the policies that brought on the financial collapse), 3) which must mean that they will have to pull back on risky lending someplace other than homes, 4) the only place that most banks would be able to pull back on riskier customers would be loans to small and new businesses, 5) but these are the businesses that have created just about all the jobs over the last 20 years and he said early in the speech he wants to encourage them, 6) so maybe their growth capital will come from selling stock to the kinds of people who invest in new and small businesses, 7) but through the Buffet Rule he’s going to double the tax rate on investment income for those people, meaning that, like the banks, they can’t be fully compensated for the risk of backing small and new businesses, 8) so they will not invest more in small and new companies but in big established firms, 9) so more of those small and new firms will have to turn to the government for capital, 10) which luckily he said would up its investing in early stage businesses with “the best” ideas, 11) “the best” ideas meaning, I guess, as with Solyndra, ideas that advance his agenda through companies whose owners support his candidacy), 11) or maybe it would be companies that agree to invite unionization (since the unions have failed to organize the new and dynamic sectors of the economy, which is why they have been shrinking), 12) but then with the big businesses, he wants to punish American companies if they invest overseas, 13) and he wants to increase exports, 14) but being competitive in the global markets often means having part of your production near your markets, which is why many companies have opened production facilities abroad and many foreign companies (BMW and Honda, for example) have opened their facilities here, 15) so he’ll make these companies less competitive, meaning less able to export anything that might be paired with some other product the company makes abroad in order to attract buyers, 16) and it also means he’ll have the U.S. ignoring many of the international trading rules of which we have been the principal sponsor since the end of WWII, rules that have led to an incredible growth in widely shared wealth all over the planet, 17) which means that, if he follows through, he’ll blow up the post-WWII global economic system, 18) which in the very short run may help the uncompetitive American labor unions but in the not-so-long run would devastate every economy on earth, 19) but it would also mean he would be in a position to decide where big companies could invest, and when, just as he’ll be in control of all new and small businesses, too, 20) meanwhile he is going to tell states and localities what their budget priorities should be, 21) and make them adopt his policies for running their schools, leaving me to wonder, when he’s through, what won’t he control?
I believe that’s what I heard the president advocate last night. But one term I didn’t hear, maybe I missed it: “The Constitution.” Then again, wasn’t he suggesting that, in brave times like these, we need to put aside those old rules. Do I have this straight?
Yes. Exactly. The plan looks incoherent. Megan McArdle doesn’t see the pattern:
There’s no real common thread holding all of these proposals together except what you might call “nostalgianomics”.
But actually its components work together to destroy the private capital markets—raising the capital gains tax rate, even if that reduces revenue, is part of that gambit—and to put all decision-making in government hands. That’s a recipe for fascism; it’s also a recipe for disaster in the medium to long run. It the short run, however, it will generate massive payoffs to Obama’s buddies and favored constituencies.
Richard Fernandez reacts:
Like the President said, it’s too late now. And if it ain’t already, I’ll make darned sure it is.
“The state of our Union is getting stronger. And we’ve come too far to turn back now. As long as I’m President, I will work with anyone in this chamber to build on this momentum. But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place.”
Translation: I’ve burned the bridges, bet the farm, taken the airplane past the point of no return. Just you watch. Hold my beer. I tell you it’s in here somewhere.
“But I intend to fight obstruction with action.” Alternative translation: I don’t expect to win the House back even if I win reelection. But I’m not going to let that get in my way; I’m going to impose my will by executive fiat. I intend to disregard Constitutional limits and thus violate my oath of office.