Coming to Expect the Unexpected

Shortly after the 2008 presidential election, historian Michael Bechloss gushed with praise for President-Elect Barack Obama, declaring him to be “probably the smartest guy ever to become President”, and raving that his IQ is “off the charts”. When interviewer Don Imus inquired as to what Obama’s IQ is, Bechloss admitted that he did not know, but that did not keep him from gushing effusive praise. We are left to take a historian’s word for it, because Obama has steadfastly refused to release his college transcripts, and his policies while in office certainly do not lend credence to the claims of his brilliance. In fact, if we had to judge the president by the effectiveness of his policies, Obama would be the functional equivalent not of the class valedictorian, but of that weird kid that sat in the corner and ate paste while talking to himself.

On matters of the economy, the president and his advisors seem to be particularly clueless. Consider some statements from the administration of late:

In a recent video clip making the rounds, Obama responds to a question about the near $1 trillion “stimulus” package and its effect on the economy by laughing and then declaring “ ‘Shovel-ready’ was not as shovel-ready as we expected.” This is, you will recall, the same stimulus package that Obama demanded must be passed immediately if we were to stem the possibility of another Great Depression. We were promised (by Christina Romer, the first chairman of Obama’s Council of Economic Advisors) that if we passed it, unemployment would stay below 8%. Well, we DID pass it, and we have been rewarded with unemployment levels between 9-10+% for well over two years. Now, we have high unemployment AND staggering quantities of additional debt crippling the economy.

About a year ago, Vice President and gaffe-machine Joe Biden went on a national tour touting a “Summer of Recovery”, when we would finally see Obama’s policies create massive numbers of new jobs and kick-start the national economic engine. Except it didn’t. Unemployment remained high and private business capital remained on the sidelines. So far, there has been no announcement by Obama of “Summer of Recovery II”, the sequel.

Watching Obama and Biden and their cadre of economic cheerleaders glibly assure us that the economy is improving under their stewardship, despite more than sufficient evidence to the contrary, is like watching a real life economic sequel to that mind-numbingly stupid 1989 movie Weekend at Bernie’s, in which two friends go to their boss’s beach house and find him dead. Mistakenly believing that they are at fault, and with a hit man is after them (who they believe won’t kill them as long as their boss, Bernie, is believed to be alive), they dress him up and parade him around town, propping him up and trying to convince everyone that he is not dead, just partied out. Obama and Biden see the voters as the hit man, so they have to convince us that Bernie (the economy) is not dead at all; in fact, it’s been so much fun that it just needs a little time to recover, to be nursed back to health, and they have just the magic elixir that will cure our hangover. The problem is that their “cure” has taken us from hangover to coma, and for all their comic protestations, the truth is that they have no clue what they are doing.

A few weeks ago Austan Goolsbee, one of Obama’s closest economic advisors, bailed on the administration, tendering his resignation for the highly suspect excuse that he needed to go back to teaching at the University of Chicago in order to retain his tenure. His departure came in the midst of a rash of “unexpected” bad economic news, including the fact that the economy created an anemic 54,000 new jobs in May, and unemployment rose to 9.1% despite Obama’s constant refrain that his policies are working. Goolsbee was said to have pushed a more free-market approach after the departure of Romer, who had led the charge for the bacchanalian rampage of Keynesian government spending that proved to be an unmitigated disaster. Goolsbee’s departure leaves on Timothy “Turbo Tax” Geithner, Secretary of the Treasury, remaining from his original economic team that was supposed to use their government-centric economic brilliance to pull us out of the Bush doldrums.

Like a punch drunk boxer, the Obama administration seems unprepared for the negative economic news that has bombarded us of late, and they seem to have no clue as to how to reverse the trend. Even Fed chairman Ben Bernanke recently admitted that he is at a loss to understand the weakness of the economy. This confusion is understandable from their perspective, because they have had free reign to implement their policies and still failed. From the expansion of TARP, to the stimulus package, to Son of Stimulus, Cash for Clunkers, Quantitative Easing, QE2, ObamaCare, Frank-Dodd financial reform, and an endless train of other anti-free market policies, they’ve had their way and we are worse off, and now they have run out of tricks.

What seems to most confusing to them is that they truly believed that they had assembled an august body of brilliant economic experts in whose capable hands the management of a multi-trillion dollar economy would flourish. They believed that their wisdom far exceeded that of a dynamic, organic economic ecosystem in which billions of economic decisions are made by hundreds of millions of citizens each and every day. They truly believed that a handful of brilliant people would know better the needs of the hundreds of millions than those hundreds of millions would themselves. It is an incredibly arrogant philosophy.

Of course, the mainstream media has been all to happy to continue the narrative that this is all “unexpected” and that we just need to give Obama more time for his policies to work. Popular blogger Instapundit adeptly addressed this by noting some of the national headlines and asking at what point the “unexpected” should become expected. Those headlines included “New U.S. claims for unemployment benefits unexpectedly climbed,” (CNBC.com, May 25), “Personal consumption fell…when it was expected to rise” (Business Insider), “Durable goods declined 3.6 percent last month…worse than economists’ expectations” (Reuters, May 25), “Previously owned home sales unexpectedly fall,” (Bloomberg News, May 19), and “U.S. home construction fell unexpectedly in April,” (Wall Street Journal). Those headlines and more all came from a two week period from the middle to the end of May and, as Dick Clark used to say, the hits just keep on coming. Of course, these hits hurt and no one wants to listen to them.

The problem with our liberal friends, as Reagan once noted, is not that they are ignorant; it’s that so much of what they know just isn’t so. Or, as Harvard/University of Chicago economist Thomas Sowell regularly points out, while the intelligentsia may have extensive knowledge (often theoretical, which never seems to translate into the practical) within a narrowly defined field, they will never have even a tiny fraction of the aggregate knowledge acquired daily by the hundreds of millions of participants in the economy.

Of course, they never stops the intelligentsia from coming up with, and insisting we implement, ever more “cutting edge” policies, no matter how miserable the track record of past ideas, and they condescend to the unwashed proletariat that dare object. Yet as we watch our phrenic superiors’ prognostications continuously fail, we are reminded of George Orwell’s maxim that “Some ideas are so stupid that only intellectuals can believe them.


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