Obama Invokes Keynes and FDR, and Promises a Return to Central Planning

(Cross-posted at Heritage)

While he spoke about moving forward, and promised change as we look toward the future, in fact President Obama’s inaugural address was firmly entrenched in discredited policies of the past; policies that never worked.

For example:

Now, there are some who question the scale of our ambitions — who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

His words here are very reminiscent of Roosevelt’s words at the start of the Great Depression. But, our memories are indeed short, if we forget that Roosevelt’s plans were actually huge failures.

Next, Obama invokes J. M. Keynes to support his call to planning, once again invoking a discredited idea from the past:

What the cynics fail to understand is that the ground has shifted beneath them — that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.

Keynes argued that the inefficiency of government spending compared with private spending did not apply during periods of recession. He reasoned that when the economy was not at full-employment (i.e. during a recession) government was “better than nothing.” Government could inject the economy with money, by borrowing and spending it, and put the unemployed to work.

Of course, even if borrowing is helpful during these periods, it could still be spent privately (with tax cuts). So, Keynes had to argue that tax cuts are too slow, and that people saving the money, as they might do when given a tax cut, is not as good as government spending the money. However, Keynesian theories have not been supported by reality, and his proofs have long ago been abandoned by economists. Yet, Obama is embracing this new trend toward the past.

Finally, Obama promises that the programs that work will remain and those that fail will be discontinued: “Where the answer is yes, we intend to move forward. Where the answer is no, programs will end.”

Supposedly, this is a major difference from the past – when, apparently, government cared less about whether the programs were working. Of course, it is rare that a government program is ever ended. As Reagan put it, “There is nothing more permanent than a temporary government program.” It is also impossible to know whether a program is “stimulating the economy.” Those that benefit from them can make this known to all, but those that suffer cannot know or prove that it is the program that makes them suffer: the damage is indirect because it caused by high taxes, the crowd-out of private business, and so on. So, a true cost-benefit analysis of any given program is impossible.

Obama has promised nothing more than a return to the 1930s; to the old discredited economic theories and the old discredited policies of central planning.

The Future of Mandatory Service

(Cross-posted at Heritage)

Time magazine ran a story back in 2007 on “The Case for National Service.” The story described the positions of the candidates for president on expanding “public service” programs. Two of the Democrat candidates favored mandatory community service by all high school students. And two others — Hillary Clinton and Joe Biden — favored creation of a U.S. Public Service Academy for training civil servants.

Barack Obama has centered speeches around this idea of public service. He waxes sentimental about what we can each do for our country. All in one speech, he said that we must “answer a new call to service to meet the challenges of our new century” and that he “won’t just ask for your vote as a candidate” but “will ask for your service.” And he said that, in fact, this is the cause of his presidency.

Obama, though, is not listed as favoring this proposed academy. Instead, he proposes expanding AmeriCorps and the Peace Corps along with several other programs, and offering funding to students in exchange for community service. We can only hope that he isn’t convinced by his supporters and colleagues to change his mind on this.

Proponents of the academy argue that we’re facing a shortage of public servants, and such an academy could help. Of course, they do not mention that we could reduce the size of government instead of training our youth like soldiers to work for an ever expanding public sector.

It isn’t mere rhetoric to say they would be trained like soldiers. Supporters of the bill have called the proposed academy the “civilian counterpart to the uniformed service academies.” But we should not need a civilian counterpart to the military service academies beyond the police academies that already exist — because the civilian counterpart to the military is just the police officer corps.

Another scary thought is that the belief in mandatory community service for high school students, or mandatory military service as Rep. Charlie Rangel (D-NY) has proposed, could combine with this call for a Public Service Academy. In fact, Rangel himself suggested that under his proposal, “Recruits not needed by the military in any given year would be required to perform some national civilian service.” He argued that mandatory service would close the economic gap, in which the poor are forced to serve disproportionately. However, this gap is actually a myth.

The idea that America’s youths should train like soldiers to serve government on the domestic front is contrary to the freedom and independent spirit this country was founded on. Furthermore, such programs are reminiscent of Soviet youth programs and Soviet job programs, and would similarly incorporate propaganda beneficial to the government in power. A free economy founded on small government has no need for such things — and they set a dangerous precedent.

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Ask what you can do for your country? What happened to your civil servants serving you - the government as a service to us, to protect us, so long as we vote for it to do so, and no longer? How did this mutate into the ideal of citizens showing their love for government through potentially mandated terms of service?