Saturday, September 12, 2009

Thomas Sowell Calls President Ocheeseball A "Charlatan"

Netty Wisbaum just forwarded Thomas Sowell's excellent Investor's Business Daily article in which he calls President Ocheeseball "a charlatan". Sowell writes:

"To tell us, with a straight face, that he can insure millions more people without adding to the already skyrocketing deficit, is world-class chutzpah and an insult to anyone's intelligence.

"To do so after an analysis by the Congressional Budget Office has already shown this to be impossible reveals the depths of moral bankruptcy behind the glittering words."

A reader of my blog just made the point that in the mid twentieth century Friedrich von Hayek, the famous Austrian economist and advocate of free markets, said that social insurance is compatible with a free market and that there is nothing wrong with providing for the poor. In fact, throughout the development of the barbarian economy, i.e., from the fall of Rome until the time of Henry VIII and the Protestant reformation, the Catholic Church provided for the poor. When Henry VIII confiscated the church lands and sold them to raise money to wage war, the responsibility for welfare was centralized.

By 1950 the American economy had been through many gyrations but government spending represented less than 15% of the total economy. Some of this was for welfare programs such as social security (which has always been in part a welfare program, although government has lied about it from day one). The economy was still 85% free. This began to change in the 1960s. Massive programs, most of which produce absolutely nothing of value, exploded. Today, government spending as a percentage of the economy has more than tripled. Economists do not keep good track of this because the spending is broken up into local, state and federal sources, but overall government now controls about 50% of the national income. The middle class is being strangled.

Hayek, of course, would turn in his grave at the bail out and the effects that Federal Reserve policy has had on our economy. This would have been problematic to von Mises and Hayek because monetary expansion creates mal investment in their view. Like most Democrats, the writer to my blog doesn't bring up Hayek in the context of complaining about the massive dislocation that the Bush-Obama bailout will cause; the future food shortages that will occur as farmland is turned into real estate development; the future inflation that will leave families poorer. Rather, he or she selectively points out that the health plan was something that Hayek said might be consistent with a free market.

At 15% of the economy, yes. At 50%, doubtful.

The United States is dangerously close to being, if not already, a fascist economy. The government controls so much of the national wealth, and so much is squandered, that development has been curtailed, and the average worker is much poorer now than he could have been. He is no better off than in 1970. Thus, the period of greatest growth in government has been paralleled by the slowest wage growth and the absence of improvement of welfare of those working for a living. Rather, government employees, Wall Street and the special interests whom President Ocheeseball represents have made out like the bandits that they are. (And Obama's saying that the opponents of his plan represent special interests is again a bald lie. Rather, it is Obama who represents special interests and the wealthy. As though college professors, the Economist magazine, Goldman Sachs, Morgan Stanely, George Soros, Warren Buffett, the Ochs Sulzbergers, and most of Wall Street are the poor, and the blue collar plumbers and carpenters who voted Republican in the last election are the wealthy. The plumbers and carpenters understand their own economic interests, as do the government-supported professionals who supported Obama. The fools are the working poor and young people who voted for Obama, the candidate of the wealthy. Obama will guarantee bad future job opportunities for the vast majority of young people. America has raised a cohort of suicidal fools.)

Sowell offers an insight as to how President Ocheeseball has gotten away with his perennial lying:

"One of the secrets of being a glib talker is not getting hung up on whether what you are saying is true, and instead giving your full attention to what is required by the audience and the circumstances of the moment, without letting facts get in your way and cramp your style. Obama has mastered that art."

Sowell also points out the potential unforeseen effects of the Obama plan:

"President Obama tells us that he will impose various mandates on insurance companies but will not interfere with our free choice between being insured by these companies or by the government.

"But if he can drive up the cost of private insurance with mandates and subsidize government insurance with the taxpayers' money, how long do you think it will be before we have the "single payer" system that he has advocated in the past?"

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