Friday, September 7, 2012

Lost in the DolFrums

I ran into a CNN article entitled "Obama's Three Big Mistakes" by David Frum about a week after it was published - but I feel compelled to comment on it anyway. A former Bush speechwriter who helped coin the phrase "Axis of Evil," Frum responds to the claim that Obama might be flawed in some ways but not on issues regarding policy by specifically listing three perceived policy mistakes during President Obama's first year in office:
1. Deferring to Democrats in Congress on the writing of the fiscal stimulus.
2. Failing to get the Federal Reserve to support said fiscal stimulus.
3. Betting the presidency on a best-case scenario.
Naturally, CNN publishes works from David Frum: an approved dissenting voice against the current administration because he does not advocate a free market. David Frum's attacks on Obama are weak - and not for the reasons one might assume. Although identifying himself as a Republican, Frum's attacks come curiously (or not so curiously?) from the Left. Note that Frum does not disapprove of Obama's actual policies (which were, only more so, the same policies of Frum's old boss George W. Bush), he only disapproves of the fact that, in his mind, Obama did not go far enough with those policies.

Frum's first complaint is that Obama deferred his stimulus, under the cheeky title of "the American Recovery and Reinvestment Act," to the Democrats in Congress. Why should that matter, one might ask? Frum states, "Congress larded up the stimulus with ancient Democratic wish lists utterly irrelevant to the crisis at hand." No doubt this is true, as central planners lack the knowledge necessary to successfully plan an economy. However, not much disconnect exists between Obama and his Democrat Party; evidenced by the fact that Obama voted with his fellow Democrats 96% of the time during his term as Senator. Serious doubts can be cast over the idea that the 2009 stimulus would have looked significantly different had Obama written every word himself.

Frum's second complaint is that the Federal Reserve did not support Obama's stimulus enough; an apparent failure of Obama's leadership. Seeing as how the Federal Reserve more than tripled the monetary supply since the meltdown occurred in 2008, the idea that the Federal Reserve did not do enough is a bit hard to swallow. However, one could also point out that the meltdown occurred precisely because of the inflationary and distorted policies of the Federal Reserve that had been active within the market all along. The last thing the economy would need is the Fed to do more of what caused the problem in the first place.

Frum then releases his inner pundit as he airs his third complaint, stating that Obama over-sold his abilities to fix the recession. Obama's big mistake here, according to Frum, is that "Recovery from a crash like 2008 can take years. Yet even armed with this information, Obama did nothing to prepare the public or his administration for the worst. Instead, he allowed his vice president to tout 2010 as 'recovery summer.'" Wait a second: is this even a question of policy? It seems more like a question of PR - and Obama has a team of people that contribute to that aspect of his Presidency. But more importantly, if recessions actually do take years to correct, then why did the Depression of 1920 correct itself in about one year? The initial economic downturn of the Depression of 1920 was in some ways worse than that which sparked the much more well-known Great Depression - and yet, the response of the federal government at that time was essentially nothing and the economy bounced back very quickly. And yet Frum will have us believe that Obama's mistake was that he did not prepare the public for "the worst" of what comes out of his own policies? I would say that Obama's big mistake was not emulating the government's response to the 1920 Depression.

Despite what David Frum will admit, Obama has been a bad president not because his policies do not go far enough but because his policies are inherently flawed and dangerous. The idea that the government should reallocate wealth towards any kind of "stimulus" is fundamentally flawed since it was these interventionist policies of the federal government that created the problems in the first place. Likewise, the idea that the Federal Reserve did not go far enough in creating unwarranted credit and money out of thin air is absolutely flawed and was the direct cause of the '08 meltdown and currently is the cause of the devaluing US dollar. But I suppose Neocon Tweedle Frum, no friend of the free market in any way, will continue to roll endlessly in these doldrums, fooling conservatives into accepting big government solutions to big government-caused problems.

No comments: