Posted by
Josh Todd on Tuesday, November 04, 2008 11:45:49 PM
Barack Obama has been elected the first African-American president in the history of the United States of America. Historical, indeed, and President-elect Obama deserves congratulations. Perhaps of equal significance—at lest in terms of governance—is the overall Democrat victory in the legislatures, particularly the US Congress. These landmark victories will have far-reaching effects, and more in the negative than the positive.
First the latter—the positive. One should feel good for the American black community, which now has a president from its own ranks. The psychological significance of Obama’s victory in the black community cannot go unnoticed. Each black “first” is celebrated, including such menial firsts as Marvin Lewis, the first black head coach of the Cincinnati Bengals, and Dusty Baker, the first black manager of the Cincinnati Reds. Now, the sky should be the limit for young, black Americans. Hopefully, victim-hood recedes and a true American spirit of self-made dreams rises in the black community.
A second positive effect of Obama’s victory is a renewed interest in politics. Apathy has been more the norm, with very few people having any clue what a person discussing, say, progressive taxation is talking about. Though that still may be the case, and even though this spike is cyclical and likely temporary, the chances have increased that Americans will learn more about their politics.
Third, perhaps this change in political power may bring a sense of confidence back to America, even if it is short-lived. Unfortunately, the Republican Party is viewed as the party in power and they naturally field the blame for the nation’s problems. Maybe the so-called mental recession that existed before the actual recession began will subside.
Lastly, I hope that the mere existence of President Obama will put forever behind us a great deal of the stains of our nation’s past. Few of us today are responsible for any of yesterday’s bigotry, but there remains pain from those days, and hopefully today helps ease the burn.
Still, there will probably be more negative effects from this election than positive. But first, let’s look at how we arrived at this moment.
The Republican Party took its first step toward power in 1994 with the historic sweep of Congress. After moderating Bill Clinton for the remainder of the 1990s, the GOP Congress welcomed George W. Bush to the presidency, bringing the false promise of solid conservative governance. But President Bush was not interested in most conservative ideals, namely reining the size and scope of government. In fact, he sought to use the government to pursue conservative ends—that is, liberal means to conservative ends. Actually, many of those ends were, well, liberal.
So, over the next six years, the Republican government increased spending and added new, expensive programs. Then, the United States went to war in Iraq, a necessary engagement that was handled poorly for far too long. With majorities in both houses of Congress and the presidency in hand, the GOP received the blame for all calamities. These conditions, unfortunately and unfairly, were viewed as conservative setbacks, even though the Republican president was not all that conservative and his party’s Congressional delegation went along with his big government plans all too willingly.
Still, the Republican Party really didn’t have that big of a majority in Congress. Combine that with its willingness to go along with a lot of Democrat-like policies (prescription drug benefit, campaign finance reform, immigration amnesty), and the Congress really wasn’t that Republican or conservative. In fact, the GOP’s largest majority was 29 seats in the House and 10 seats in the Senate. Compare this to the Democrats’ majorities in recent years (14, 13, 10, 10, 16, 22, 20, and 8 in the Senate, both dating back to the early 1970s; and its 31 seat lead, bigger than the biggest GOP lead, in the House is by far its smallest margin during the same period). Still, the mere fact of holding a majority (in one case, 2002-3, a 50-50 split with Dick Cheney being the tie-breaker) meant that the GOP was to blame for all ills, even when the evidence overwhelmingly implicated Democrats.
In 2006, the revolt began, as a stunned GOP lost its slim control of Congress, creating a fairly solid Democrat lead in both houses. Conditions in Iraq continued to bode badly for Republicans. President Bush’s popularity continued to dwindle, mainly due to his handling of the war. Then, a financial crisis worsened what was probably a cyclical decline in the business cycle. This, too, was blamed on Republicans, even though Democratic governance put in place almost all of the factors that led to the crisis.
And tonight, we have a Democrat president with little experience and a thin resume. He has spent just part of one term in the US Senate, a handful of terms of a state senator, and years as a community organizer—not your typical presidential list of credentials. Add to that a series of past associations with radicals, communists, and other unsavory characters making Obama look like a quasi-socialist (his desire to equalize by fiat) and proto-fascist (based on his desire to have the government control certain private industries like health care).
Only a complete Republican meltdown could have allowed this particular man to ascend to the presidency. Absent, say, the Iraq War, and it’s hard to see such an inexperienced, hard leftist winning the house at 1600 Pennsylvania. In a nutshell, it’s all the Republicans’ fault that we are about to experience, probably, six years or so of extremely liberal rule because they failed to live up to their ideals and govern as they said they would.
Another condition that led to Obama’s rise to the presidency is, in fact, the collective economic ignorance of the electorate. I know when I was in high school, and even in college, my economic education was almost nil. I gained most of my knowledge through personal study, taking the time to read Adam Smith, F.A. Hayek, John Maynard Keynes, and Thomas Sowell in my spare time (yes, a geek, I know). Thus, the overwhelming majority of Americans have no understanding of the implications of President-elect Obama’s policies.
Here’s what is probably in store: President Obama will sign into law tax increases much more ambitious than those expressed (recall that Bill Clinton, too, ran on a similar tax platform as Barack Obama in 1992). This will have chilling results on the economy. People with money (that is, typically, older people who have worked for years to save their nest eggs) will move their cash out of investment and into tax-exempt and –advantaged vehicles to avoid increased capital gains and income taxes, removing money from the economy. Higher corporate taxes will cause de fact inflation, as businesses will be forced to pass on those taxes to the consumer. Likewise, those taxes will decrease employment as businesses will be forced to not hire or let workers go.
Obama has also vowed a cap-and-trade system to combat climate change. This sort of plan was chic when I was a freshman in college and seems to have caught on (even John McCain pledged this sort of plan). A cap-and-trade system would end up being a net business tax, which, of course, is passed on to the consumer. It would also stunt business growth by increasing the cost of starting and sustaining business operations.
Additionally, Barack Obama has pledged war on Big Oil and all but ruled out drilling for our own oil or even allowing for new clean coal plants (actually, on the latter he has very public and conflicting statements, though the bulk of his statements seem to be anti-clean coal). These policy stances will do nothing to curb energy costs, and as those costs inevitably rise again, there may be the temptation to fix prices. Such policies had horrible effects during the 1970s, as gas “shortages” and long lines at gas pumps were common.
Obama wants an extremely expanded role for government in health care. Other examples of socialist (or here, probably more fascist, as he at least claims the desire to leave a lot of private health care in place, only to control it more firmly) health care systems that are disasters are plenty, with rationed care, poor service, and little innovation. But that, too, appears to be on its way.
Likewise, the Department of Education will inevitably become even more liberal than it is today. No competition (school choice) will be injected into America’s struggling school systems, only more money and control over curricula. If you recall my earlier statement (of fact) that Americans are woefully ignorant in the subject of economics, think liberal control over what our children learn. And if this remains so, then they will continue to find foul policies appealing.
All of these policies amount to government tinkering of the kind that created the very financial crisis we now endure. Just a brief recap: the Community Reinvestment Act, signed by Jimmy Carter, pressured lenders to issue loans to borrowers with poor credit. The Clinton Administration used this act to increase that pressure in an attempt to increase home ownership. Then, Freddie Mac and Fannie Mae began packaging mortgages as securities to increase liquidity in the housing markets (i.e. a bank can issue a loan, sell it, and issue another, etc.), causing underwriters to give two damns whether a loan defaulted or not. Add unusually low interest rates and we had rising prices based on unnaturally high demand, followed by the inevitable defaults and foreclosures, the trashing of those mortgage-backed securities, and we now have a crisis.
In short, the Obama Administration will bring in a new era of declining economic freedom, which, according to Hayek, is synonymous with declining freedom in total. And very little of this will go unchecked if Democrats reach 60 seats in the Senate and expand their lead in the House. It will be at least two years before those majorities can be scaled back and probably six before a significant conservative presence can make its way back to power. By then, most of the damage will be done, because liberal programs, once in place, don’t go away.
President Obama will bring some silver linings to the United States of America. But in the meantime, conservatives must regroup and make another push in order to preserve what will remain of the nation we love.