Tuesday, June 17, 2008

Obama Econ Interview: Eclectic or Directionless

WSJ today reports on an interview with Barack Obama in which the nominee offers that he just might support a reduction in Our Republic's second-highest-in-the-world corporate tax rate to spur global investment in our economy.

That got us excited over our breakfast of hot coffee and cold pizza. That is, until we read the rest, a confused muddle of every proposal that any Democrat has ever supported.

We had hoped that, absent the pressures of satisfying his party's left, Obama could enter the world of real economics. But it is not so. If anything, we are more confused about what Obama's "change" will mean for the economy.

In the Obama economic stew are such ingredients as these:

  • His assertion that there's no connection between tax cuts and economic growth.
  • His commitment to evening out American incomes by using the tax code to redistribute wealth.
  • His simultaneous commitment to balancing the budget and spending more on "infrastructure."
  • His willingness to label just about any project as "infrastructure" for the sake of spending government money on it.

In sum, we see a leader without a place to which to lead, a man without a compass. Obama calls his approach "eclectic." The term implies that the individual chooses a mixture of things and combines them in novel ways. That's fine with such matters as, say, composing music or developing cuisine. But in economic policy, where competing choices pull the economy in opposite directions, eclecticism is doomed to failure.

For those who believe that government spending for such things as "green energy" will yield economic dividends, the good folks at the WSJ detail the extremely poor record of such things. Government spending on basic scientific research does serendipitously yield big economic gains now and then. Government spending on big projects to revolutionize the economy has a rate of success declining toward zero.

The nominee appears still as one who is trying to convince his party that he's their man, attempting to appeal to every mircoconstituency of his party's incoherent coalition of special interests. We are not comforted.

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