Obama’s New “New Deal”

The world was greeted on Saturday with Barack Obama’s announcement of a massive public works program to “save or create at least 2-1/2 million jobs so that the nearly 2 million Americans who’ve lost them know that they have a future,” as Obama put it in his weekly radio address (yes, he’s already doing this, even before the inauguration). A detailed article at Politico.com opens with the following:

President-elect Barack Obama added sweep and meat to his economic agenda on Saturday, pledging the largest new investment in roads and bridges since President Dwight D. Eisenhower built the Interstate system in the late 1950s, and tying his key initiatives – education, energy, health care –back to jobs in a package that has the makings of a smaller and modern version of FDR’s New Deal marriage of job creation with infrastructure upgrades.


How much this massive program would cost, and how the President-elect would intend it to be paid for has not yet been revealed. That this could be considered “smaller” than Roosevelt’s New Deal is doubtful. The article goes on to list the “five key parts” of Obama’s plan, all of which raise a variety of questions and responses in the mind of this writer. Each of the five parts, with Obama’s statement of purpose, is listed below, along with my response.


[W]e will launch a massive effort to make public buildings more energy-efficient. Our government now pays the highest energy bill in the world. We need to change that. We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs. That won’t just save you, the American taxpayer, billions of dollars each year. It will put people back to work.


It all sounds good on paper, doesn’t it? Certainly we want to promote more energy-efficiency to reduce the costs of operating all these federal buildings, right? A couple of questions come to mind. First, what does he mean by “efficient light bulbs”? Is he referring to the new compact fluorescent lamps (CFLs) that will eventually replace incandescent light bulbs (as mandated by legislation passed by Congress in 2007)? What about the impact of CFLs on the environment, especially concerning disposal into landfills, with the small amounts of mercury they contain? Second, how will this program “save… billions of dollars each year” when clearly it is meant as a self-perpetuating public works program? After all, we are talking about a vast number of buildings to be upgraded, as, after all, this is the bloated federal government.

If we want to be really serious about saving “billions of dollars each year”, we should look to shut down agencies and entire departments, and sell the no-longer-needed federal buildings to anyone in the private sector who might put these buildings to better use, leaving the new owners the freedom and discretion to look for the best alternatives for achieving energy efficiency. We would truly save billions of dollars each year, and generate revenue that could be put towards deficit reduction.


[W]e will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. We’ll invest your precious tax dollars in new and smarter ways, and we’ll set a simple rule – use it or lose it. If a state doesn’t act quickly to invest in roads and bridges in their communities, they’ll lose the money.


Certainly this writer doesn’t dispute the fact that, as Congressman Ron Paul points out, our bridges are collapsing here at home while we spend money to blow up bridges in Iraq and then rebuild them. No one would dispute the need for repairing infrastructure. But what exactly does Obama intend here? Is he speaking of a vast expansion of infrastructure, in other words, new highways? Will there be the attempted revival of the trans-Texas corridor, popularly known as the “NAFTA Superhighway”? What kind of an impact would new infrastructure projects have on private property and the environment through the use of eminent domain? It seems that this could easily turn into a huge corporate welfare program for contractors involved in these kinds of projects. It also seems likely that this could be used to win special favors for labor union contractors, or any others that subscribe to the kind of politics that looks with great favor upon the new administration. All of the funding for this program would be centrally controlled, implying a system of blackmail and favoritism in deciding which states get how much money, in violation of the Tenth Amendment. Note also the use of the word “investment” here. I have more to say about that in my conclusion.


[M]y economic recovery plan will launch the most sweeping effort to modernize and upgrade school buildings that this country has ever seen. We will repair broken schools, make them energy-efficient, and put new computers in our classrooms. Because to help our children compete in a 21st century economy, we need to send them to 21st century schools.


Whoa! First all, there is no role for the federal government in education authorized by the Constitution. Traditionally, whatever one thinks about public (i.e., government) education, this is a matter that has been seen primarily as a local responsibility, though we certainly have seen an enormous expansion of federal intervention in education since the creation of The Department of Education in 1979. One would normally assume that the maintenance and upkeep of public school buildings and equipment would be managed and funded by local government, but now we have the President-elect proposing that we make this a primary responsibility of the federal government.

How many billions will it cost to implement this program? Can we even begin to imagine how inefficient such an operation would be, after witnessing such inefficiency in the federal government’s administration of aid to victims of Hurricane Katrina? How can this be seen as anything but a tacit proposal to nationalize education? Corresponding with increased federal aid to and control of education has been a precipitous decline in the quality of eduction. How would further nationalization of education improve its quality? What is needed is more freedom in and of education, which can only be accomplished if the federal government gets out of the way and ends its involvement in education. The money saved could be better utilized by local school boards, as well as by parents seeking alternatives to government schools.


As we renew our schools and highways, we’ll also renew our information superhighway. It is unacceptable that the United States ranks 15th in the world in broadband adoption. Here, in the country that invented the Internet, every child should have the chance to get online, and they’ll get that chance when I’m president – because that’s how we’ll strengthen America’s competitiveness in the world.


So the President-elect believes he, as President, presumably with the help of Congress, can give “every child… the chance to get online”? The amazingly expanded use and accessibility of the internet is a true testament to the powers of the free market, as we’ve seen electronic products become increasingly more affordable and accessible without help from government. Obama obviously would intend to change this by introducing a federal role in guaranteeing internet access “to every child” as a new “entitlement”. Reading between the lines, it would appear to this writer to be a major step towards regulating the Internet. With federal aid comes federal control. It is folly to pretend otherwise. We should be very concerned about any attempt by government at any level to regulate and control the Internet, as it would surely be an excuse to prevent the flow of any information that could be used to challenge the power of government and its corporate cronies. The best way to give “every child… the chance to get online” is to maximize freedom and not utilize central planning, entitlements, and tyranny.


In addition to connecting our libraries and schools to the Internet, we must also ensure that our hospitals are connected to each other through the Internet. That is why the economic recovery plan I’m proposing will help modernize our health care system – and that won’t just save jobs, it will save lives. We will make sure that every doctor’s office and hospital in this country is using cutting edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes, and help save billions of dollars each year.


Read carefully: “We will make sure that every doctor’s office and hospital in this country is using cutting edge technology and electronic medical records… ” The very words we will make sure most certainly points to a tyrannical approach with more federal control and the threat of some unspecified consequence (“We” certainly refers to the Obama administration, not to the American people collectively, as Obama most likely intends his audience to believe). This raises concerns about privacy, as what is clearly called for here is a national data-base of medical records. It’s one thing for hospitals and doctors to be voluntarily connected electronically for the purposes of sharing legitimately needed information from medical records (with the consent, above all, of the patient). It’s quite another thing to mandate that “every doctor’s office and hospital in this country” be connected in this way. Our health care system, for all its problems, has already become quite modernized technologically. This writer cannot fail to see the real, hidden agenda behind this, which is to ensure more federal control over doctors, hospitals and patients. What about doctors who favor alternative approaches to medical care? With a federally insured (read: mandated and controlled) electronic medical records database, there is the real potential for the bureaucratic harassment of doctors who do not subscribe to officially “approved” methods of treatment.


Not one of these proposals will bring about “economic recovery”. Every one of these programs will confiscate (in the form of taxes of various sorts) resources from the productive members of society, and from the productive sectors of the economy, and re-allocate them into centrally-planned and managed programs that offer no promise of efficiency or economic success. These are resources that would otherwise be available to save and invest by private individuals making their own decisions, who could start their own businesses and create jobs on their own, thus putting the economy back on the road to recovery. One very important question we should ask of these programs, yea, of any program proposed by the new administration or any member of Congress is, what does this proposal do to increase freedom? Any proposal for which that question cannot be answered affirmatively should be rejected. None of the five major parts of Obama’s “New” New Deal would increase freedom. Every one of them does exactly the opposite.

Another aspect of the Obama proposals is that the money to pay for them does not exist. We haven’t even been told the cost, and we are being told by “wise” apologists (e.g., Paul Krugman) for the current approach to things that “deficits don’t matter”. But deficits do matter, because the money that doesn’t exist has to be borrowed, perhaps from China, but most likely against the future in the form of that most insidious of taxes, inflation. The Federal Reserve will continue, as it is doing right now at a feverish pace, to print more and more money to fund all these programs in addition to all the bailouts we’ve seen as of late. All of that will have to be paid for, and it will be done by robbing the value of every dollar we earn. Higher prices will follow, the poor and the middle class will lose, while the wealthy, specially-protected corporations will be rewarded. It will be “spreading the wealth around”, but not as Obama wants people to believe. It will rather be a massive transfer of wealth from the poor and middle class to the government-favored corporations and financial institutions.

Note the repeated use of the word “invest” in the President-elect’s speeches and proposals. This Orwellian euphemism for “spend” has its origins in the Clinton era (a great period in the pioneering of Orwellian double-speak). Government, of course, cannot “invest” anything any more than it can “produce” anything. Every resource in the possession of government has been taken from somewhere else in the form of taxes of one sort or another. Wouldn’t it be an interesting experiment if, for one year, Congress and the President decided to suspend all federal taxes, relying instead upon voluntary contributions for revenue? I think then we would quickly see the whole mechanism come crashing down, with perhaps some major philosophical changes in what the role of government ought to be.

No, the answer to economic recovery is, simply, more freedom. We need more freedom, lots of it, if we are to hope to make a recovery from the current economic situation anytime soon. It is at the height of arrogance for the President-elect and the members of Congress to presume that they know best how to allocate and invest resources to bring about a robust economy. Central planning doesn’t work, and it will only lead to tyranny. This is equally true in foreign policy as it is in domestic policy. Taking the country further down the road of bankruptcy will only worsen the situation. It’s rather like curing a drug addict by giving him vastly expanded amounts of the drug to which he is addicted. Ending the addiction is painful and difficult, but absolutely necessary. We need to end, now, once and for all, our society’s addiction to debt, bailouts and big government. We need to bring about, now, a maximum amount of freedom to unleash the creative powers of individual Americans. We need, now, to return to following the Constitution and the Rule of Law. As the late Senator Barry Goldwater put it in his 1979 memoirs, With No Apologies, “We are a can-do people.” Goldwater was speaking of a free people. When Obama says “Yes we can”, his “we” does not refer to a free people, acting individually and in concert with one another in creative ways, but rather it refers to the idea of “the people” as one and the same as “the government”.

For ideas on how to increase liberty and bring about economic recovery, search online the many articles and speeches by Congressman Ron Paul. Read the multitude of articles published by the Ludwig von Mises Institute. Look into such organizations as Campaign For Liberty, Young Americans For Liberty, and the Future of Freedom Foundation. It is time now to counter-act the proposals of the President-elect’s “New” New Deal with our own liberty-based solutions.

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