A place where everything revolves around the fixed planet of public spending
By Daniel Henninger, WSJ Opinion, February 27, 2013
It may be that we have to move beyond politics alone to explain events in
Washington. We are in the fifth year of the Obama presidency, and Washington is still dead in the
water. Four straight years in which the government of the United States of
America fails to enact a budget is, well, amazing.
An illustration of the Ptolemaic geocentric system. |
The sense is growing around Washington, and this increasingly includes
Democrats, of living in an alternative universe. Barack Obama gives his State of
the Union speech, the sequester looms, and the president flies around the
country giving speeches. He's had virtually no contact on the sequester with the
legislative branch. Now he's going to meet with them after the sequester
happens. This is unusual. We need to look outside normal politics for
explanations.
Mr. Obama likes to convey the impression that he doesn't think or do business
like other presidents. It's time to take him at his word. If Washington is
starting to look like an alternative universe, that's because the president is
creating an alternative universe, the Obamaian Universe. (Obamaian is pronounced
Oh-buh-mayan, as in the recently famous calendar.)
The Obama administration is trying to pull us back into what astronomers
would call the pre-Copernican world. Copernicus' heliocentric system overthrew
what was known as geocentrism—the belief that everything in the universe
revolved around the earth. Beautiful maps exist depicting geocentrism.
Economic thinkers since at least the time of, well Copernicus, have
understood that national well-being derived from private individuals going out
into the private world to produce goods and trade goods, an activity that for
centuries has created wealth for many nations. No longer. Mr. Obama and his
circle divide the economy into separate parts. In the Obamaian universe, the
units of the private economy—companies large or small—are satellites orbiting
the great fixed planet of public spending. All material and economic life in the
Obamaian model radiates outward from a central source of public spending. This
is why spending in the Obama presidency abruptly jumped as high as 25% of GDP
from a 40-year average of 20% of GDP.
In "Star Trek," as I recall, its genius creator Gene Roddenberry routinely
made clear that people living in an alternative universe always needed a "life
force" unique to their planet. Something that kept the people on the planet
going, like a magical green ooze.
In the Obamaian universe, the life force is a fairly weird contraption known
as the Keynesian Multiplier. As explained by its adherents, for every $1 of
public spending, the whole economy will rise by $1.50 or even $2.
As life forces go, the Keynesian Multiplier would be really remarkable. Alas,
Copernican economists such as Robert Barro have been asking repeatedly the past
four years for the evidence that all this spending in Mr. Obama's public
universe has been expanding the economy at this rate. Indeed, the Congressional
Budget Office just said that in 2013, which will be the fifth year of Obama
budgets that spend about $3.5 trillion annually, the economy is only going to
grow 1.4%.
For that, Mr. Obama has an answer: more spending, which would be made
possible by ratcheting up the volume of revenue flowing into the spending
machine via whatever cats-and-dogs tax increase he can get through Congress.
Maybe the Keynesian Multiplier, like green ooze, just doesn't work.
It doesn't matter. As with geocentrism, the president's pre-Copernican
political economy is based in religious belief. This is why House Speaker John
Boehner and so many others have never been able to get on the same page with the
president about the upward slope of federal spending. He doesn't want to cut
spending. He wants more of it. Forever. Public spending is beyond ideology for
Barack Obama. It's the oxygen in his universe.
This explains Mr. Obama's End-of-Days speeches the past week. Rationalists
around Washington's professional budgeting community have been trying to explain
that this apocalypse is entirely avoidable. The bureaucracies can move spending
under many shells. But Mr. Obama really believes the stars will fall from the
sky if spending declines.
In Washington's standard model, it's all just politics. Mr. Obama is running
an established strategy of driving public opinion to marginalize and ultimately
defeat Republicans. Who could doubt it? But maybe it is also time to start
taking Barack Obama at his word. Maybe it's time to come to grips with the fact
that he sees the public economy of federal spending as the life force of the
nation as no president ever has, not even Franklin Roosevelt.
If after all these years no one in Washington can cut a deal with Barack
Obama on spending, taxes and economic growth, maybe it's because he is in a
place indeed occupied by no one else.
No comments:
Post a Comment