Barack Obama’s new era of (ir)responsibility

You have to admire Barack Obama's rhetorical skills and self confidence. Even the president's critics give him high marks for being an outstanding communicator. The mainstream media (MSM) meanwhile have been effusive aboutPresident Obama's first month in office, and have become shameless cheerleaders of his "vision" for America.

Mainstream commentators are ecstatic that an "activist" president who has a "progressive" agenda for America is in the White House making "bold" proposals to create jobs, tackle global climate change, and spend hundreds of billions more on education, health care and energy. In addition, the MSM are giddy over Obama's plan to raise taxes on upper income householdsand businesses and increase regulations to rein in the "greed" of "irresponsible" business executives. But like a street hustler who knows how to conduct a good con, Obama's words are meant to soothe the gullible masses into thinking that another great leap forward of statism will create a Kingdom of God on Earth.

In other words, Obama's rhetorical flourishes are similar to the utopians, the postmillennial pietists and the demagogues who wanted to increase the size and scope of government to create a virtuous and prosperous America.

Barack Obama's 2010 budget proposal calls for "a new era of responsibility in which we act not only to save and create new jobs, but also to lay a new foundation of growth upon which we can renew the promise of America." However, "saving" jobs is not a government responsibility, but more importantly as Frederic Bastiat observed more than 150 years ago, so-called public works and government "stimulus" do not increase employment in society. In fact, government destroys jobs by its spending, deficit spending, high taxes on labor and capital and inflating the money supply.

What is the "new foundation" that Obama wants to lay for the American people? The foundation the president presents in his budget message is shakier than the one he criticizes. The Obama administration is calling for the greatest, if not the greatest, expansion of the federal government in American history.

To begin with, if the Obama administration wants to correct the ills of America, it should first know, like a good physician, what ails the American economy. Not surprisingly, nowhere in his budget message does the president identify the easy money, low interest policies of the Federal Reserve for igniting the unsustainable housing boom. Instead, the president states:

For decades, too many on Wall Street threw caution to the wind, chased profits with blind optimism and little regard for serious risks-and with even less regard for the public good. Lenders made loans without concern for whether borrowers could repay them. Inadequately informed of the risks and overwhelmed by fine print, many borrowers took on debt they could not really afford. And those in authority turned a blind eye to this risk-taking; they forgot that markets work best when there is transparency and accountability and when the rules of the road are both fair and vigorously enforced.

Obama describes the consequences of the FED's easy money policies. He effectively exonerates-by ignoring–Greenspan, Bernanke, and company for their "legalized counterfeiting."

There cannot be a "business cycle" unless the rate of interest is manipulated by the so-called guardians of our money below the "natural rate." By dropping interest rates periodically to ridiculously low levels since its creation in 1913, the FED and only the FED can create a boom-bust cycle. Free markets do not generate business cycles. In addition, the fractional reserve banking system compounds the problems of easy money because it "multiplies" the newly created FED money making it possible for bankers to throw caution to the wind by lending to unworthy borrowers.

In short, a torrent of liquidity courtesy of the FED during the last cycle boosted unsustainable employment in housing, banking, finance, etc. Those jobs cannot-and should–not be saved, but individuals who have been laid off must find work in professions and jobs that better serve consumers.

President Obama also states in his budget message: "Ours is a market economy, and the Nation depends on the energy and initiative of private institutions and individuals." Hallelujah, sort of. The reality is that we have a mixed economy. The United States is not and has never been a laissez faire economy since day one. The federal government has been intervening in the economy since the creation of the First Bank of the United States.

Then the president asserts: "But at this particular moment, government must lead the way in providing the short-term boost necessary to lift us from a recession this severe and lay the foundation for future prosperity." (Emphasis added) Ugh. The laws of economics and the principles of finance require just the opposite of President Obama's prescription.

To return to sustainable prosperity, the United States economy needs less government spending, less taxes on capital and labor, less military spending, less regulations, abolition of the FED, more savings, less government debt, the return of an honest monetary system restoring the integrity of the dollar, no more bailouts, more free enterprise, no more federal government "investment" in energy, education and healthcare, and the liquidation of unsound investments in housing and other sectors.

We need the market-that is the American people-to set the agenda for the economy, not the politicians, the bureaucrats and the well connected special interests that will reap billions as federal government spending will head into unchartered territory over the next four years.

A new era of responsibility is one that is based on living within one's means, and that includes the federal government as well as the states and local governments. If the American people want all the government the pundits say the masses supposedly desire, then they should be willing to pay higher taxes to support all the spending that President Obama and our own Governor Corzine assert is necessary to turn the economy around. We should not be balancing the federal budget on the backs of our young people let alone unborn generations.

The reality is that the American people are continuing to be conned by the "wizards" behind the curtain. The wizards of DC have brought America to the brink of monetary destruction and full scale statism, where the people will need government permission to run their businesses and obtain capital to fund and grow their enterprise.

There is still time to restore an era of responsibility in America, but President Obama's first (budget) proposal falls woefully short of that worthy goal.

Barack Obama’s new era of (ir)responsibility