PrintMarch 10, 2009
Obama's War on Business
Kevin Hassett implies in a stunning commentary on Bloomberg today that Obama has declared a war on business.
President Johnson gave us the War on Poverty. Nixon started the War on Drugs. And, according to Hassett:
Now that we have seen President Barack Obama’s first-year legislative agenda, we know what kind of a war he intends to wage.
Namely: the War on Business.
Hassett compares Obama to a “Manchurian Candidate” especially prepared to wage war on America’s business economy:
What policies might that leader pursue?
He might discourage private capital from entering the financial sector by instructing his Treasury secretary to repeatedly promise a brilliant rescue plan, but never actually have one. Private firms, spooked by the thought of what government might do, would shy away from transactions altogether. If the secretary were smooth and played rope-a-dope long enough, the whole financial sector would be gone before voters could demand action.
Another diabolical idea would be to significantly increase taxes on whatever firms are still standing. That would require subterfuge, since increasing tax rates would be too obvious. Our Manchurian Candidate would have plenty of sophisticated ideas on changing the rules to get more revenue without increasing rates, such as auctioning off “permits.”
He might discourage private capital from entering the financial sector by instructing his Treasury secretary to repeatedly promise a brilliant rescue plan, but never actually have one. Private firms, spooked by the thought of what government might do, would shy away from transactions altogether. If the secretary were smooth and played rope-a-dope long enough, the whole financial sector would be gone before voters could demand action.
Another diabolical idea would be to significantly increase taxes on whatever firms are still standing. That would require subterfuge, since increasing tax rates would be too obvious. Our Manchurian Candidate would have plenty of sophisticated ideas on changing the rules to get more revenue without increasing rates, such as auctioning off “permits.”
After offering these hypothetical teasers, Hassett gets down to brass tacks:
If our Manchurian Candidate leader really wanted to knock the country down for good, he would have to provide insurance against any long-run recovery.
There are two steps to accomplish that.
Discourage Innovation
First, one way the economy might finally take off is for some entrepreneur to invent an amazing new product that launches something on the scale of the dot-com boom. If you want to destroy an economy, you have to persuade those innovators not even to try.
Second, you need to initiate entitlement programs that are difficult to change once enacted. These programs should transfer assets away from productive areas of the economy as efficiently as possible. Ideally, the government will have no choice but to increase taxes sharply in the future to pay for new entitlements.
A leader who pulled off all that might be able to finish off the country.
There are two steps to accomplish that.
Discourage Innovation
First, one way the economy might finally take off is for some entrepreneur to invent an amazing new product that launches something on the scale of the dot-com boom. If you want to destroy an economy, you have to persuade those innovators not even to try.
Second, you need to initiate entitlement programs that are difficult to change once enacted. These programs should transfer assets away from productive areas of the economy as efficiently as possible. Ideally, the government will have no choice but to increase taxes sharply in the future to pay for new entitlements.
A leader who pulled off all that might be able to finish off the country.
Hassett ends the piece with the usual “It’s clear that President Obama wants the best for our country” disclaimer. The piece is so hard hitting, it is difficult to know how seriously to take this demission from the main argument.
Read the entire article for yourself and see if you think Hassett really means Obama has declared war on the economy -- or if Obama is simply in over his head.
Hat tip: NYC Lauri
