Obamanomics: The economics of fear

posted at 7:51 am on February 29, 2008 by Ed Morrissey

The Economist takes a look at Obamanomics, and it sees William Jennings Bryan and class warfare. Instead of offering hope, Barack Obama offers the same fear- and envy-based tactics on which populism has always thrived. While Democrats have often used these tactics in primaries, the Economist worries that Obama might try to govern based on these promises:

FOR a man who has placed “hope” at the centre of his campaign, Barack Obama can sound pretty darned depressing. As the battle for the Democratic nomination reaches a climax in Texas and Ohio, the front-runner’s speeches have begun to paint a world in which laid-off parents compete with their children for minimum-wage jobs while corporate fat-cats mis-sell dodgy mortgages and ship jobs off to Mexico. The man who claims to be a “post-partisan” centrist seems to be channelling the spirit of William Jennings Bryan, the original American populist, who thunderously demanded to know “Upon which side shall the Democratic Party fight—upon the side of ‘the idle holders of idle capital’ or upon the side of ‘the struggling masses’?”There is no denying that for some middle-class Americans, the past few years have indeed been a struggle. What is missing from Mr Obama’s speeches is any hint that this is not the whole story: that globalisation brings down prices and increases consumer choice; that unemployment is low by historical standards; that American companies are still the world’s most dynamic and creative; and that Americans still, on the whole, live lives of astonishing affluence. …

If he were elected president, backed by a Democratic Congress with enhanced majorities, Mr Obama might well feel obliged to deliver on some of his promises. At the very least, the prospects for freer trade would then be dim.

The sad thing is that one might reasonably have expected better from Mr Obama. He wants to improve America’s international reputation yet campaigns against NAFTA. He trumpets “the audacity of hope” yet proposes more government intervention. He might have chosen to use his silver tongue to address America’s problems in imaginative ways—for example, by making the case for reforming the distorting tax code. Instead, he wants to throw money at social problems and slap more taxes on the rich, and he is using his oratorical powers to prey on people’s fears.

Many people have compared Obama to Ronald Reagan in his ability to promise “morning in America,” but they have focused only on the most superficial part of the Reagan revolution. Reagan didn’t cast himself as the agent of hope, but appealed to the hope within Americans that they could lift up the country, and not the other way around. He focused on the hope of the individual as the true agent of change, and not the despair of the collective that required government intervention.

The rhetoric has given us nothing really new. It has the same populist ring to it that we have heard since before collectivism got entirely discredited in the latter 20th century. It’s simplistic calls to soak the rich and redistribute the wealth, to impose economic isolationism, and to prey on the fears of the working class by casting globalization as an unmitigated evil.

The Economist acknowledges that Democrats usually drop the populism when it comes to general elections. That was certainly true of Bill Clinton, who made the NAFTA deal that his wife routinely disparages on the stump now. It would most likely be true with Hillary, but Obama has no track record on which to gauge this. Given that the only basis for analysis is Obama’s rhetoric, it’s hard to judge him as anything other than the fear-mongering populist he has become on the campaign trail.


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Recession: An extended decline in general business activity, typically two consecutive quarters of falling real gross national product. (Houghton Mifflin Dictionary)
I haven’t seen that we have even one month OR quarter of falling real GDP /GNP much less two consecutive quarters. PURE ECONOMIC FEARMONGERING BY LIBERAL DEMOCRATS.

jimbo2008 on February 29, 2008 at 8:01 AM

There are a lot of simularities between Obama and William Jennings Bryan

bnelson44 on February 29, 2008 at 8:04 AM

I can’t see Obama moving toward the centre when he gets the nomination – I think he truly believes the tripe he’s peddling.

Given the intellectual vacuity of the Left, when (assuming he wins the general) Obama’s policies kill the economy, all he’ll have to do is blame on Bush leaving American with the worst economy in history.

landshark on February 29, 2008 at 8:06 AM

What is missing from Mr Obama’s speeches is any hint that this is not the whole story: that globalisation brings down prices and increases consumer choice; that unemployment is low by historical standards; that American companies are still the world’s most dynamic and creative; and that Americans still, on the whole, live lives of astonishing affluence. …

Rinse and repeat. Are you listening Senator McCain or do you believe that Captain Ed’s words are insulting BO’s integrity and are racist?

Angry Dumbo on February 29, 2008 at 8:22 AM

The man who claims to be a “post-partisan” centrist…

Really? He is a centrist? The man is officially the most liberal Senator in DC. How is that centrist? He has shown no signs of budging from his liberal agenda and if elected, his ‘reaching across the aisle’ is as probable as ‘global warming’ is real.

carbon_footprint on February 29, 2008 at 8:22 AM

Many people have compared Obama to Ronald Reagan

Bite your tongue! Hard!!!

I admired Ronald Reagan, Ronald Reagan was a friend to the people, Obama is no Ronald Reagan! As you posted, Reagan didn’t peddle hope but he brought out the hope within.

There’s no limit to what a man can do or where he can go if he doesn’t mind who gets the credit- RWR

highhopes on February 29, 2008 at 8:23 AM

P.S. strong first week Ed.

carbon_footprint on February 29, 2008 at 8:23 AM

If the economy is tanking, why the hell do we want to elect someone who is going to tax us to death?

E L Frederick (Sniper One) on February 29, 2008 at 8:23 AM

When the Economist endorsed John Kerry, I understood it was just a high-brow TIME magazine. Like the NYT or other MSM, it’s just become too difficult and time-consuming and tedious to separate the wheat from the chaff. I think they call that a loss of credibility. So while my opinion about Obama mirrors theirs in this case, their opinion means little if anything to me.

JiangxiDad on February 29, 2008 at 8:31 AM

Recession: An extended decline in general business activity, typically two consecutive quarters of falling real gross national product. (Houghton Mifflin Dictionary)
I haven’t seen that we have even one month OR quarter of falling real GDP /GNP much less two consecutive quarters. PURE ECONOMIC FEARMONGERING BY LIBERAL DEMOCRATS.

jimbo2008 on February 29, 2008 at 8:01 AM

agreed, but it’s not just the liberal democrats touting this. Sure it works in their favor right now. The anti war set has essentially lost their war, Clinton and Obama realize now that you can’t cut and run (They always did, but now it’s not fashionable)So preying on people OTHER most basic fears is what the non incumbent party will do.

Now that America feels reasonably safe from having their homes and malls attacked by Islamic Fundamentalists, we need to find fear elsewhere. Well, what’s scarier, for MOST Americans, than not being able to feed, clothe, or provide shelter for those you love and care for?

As the election draws near, we’ll see them touting a prescription drug plan, but there’s no use pandering to the geriatric set just yet…they don’t have the attention span and, well lets just say they don’t buy green bananas, and November is a long ways away.

beefytee on February 29, 2008 at 8:37 AM

Reagan didn’t cast himself as the agent of hope, but appealed to the hope within Americans that they could lift up the country, and not the other way around. He focused on the hope of the individual as the true agent of change, and not the despair of the collective that required government intervention.

How true. As I read this, I thought that JFK must be rolling over in his grave. Instead of “Ask not what your country can do for you, ask what you can do for your country” the current Democratic party, with Obama as the poster-boy of this kind of thinking, is saying “Ask not what you can do for your country, ask what your country can do for you.”

Depressing.

crazy_legs on February 29, 2008 at 8:39 AM

“Ask not what your country can do for you, ask what you can do for your country” the current Democratic party, with Obama as the poster-boy of this kind of thinking, is saying “Ask not what you can do for your country, ask what your country can do for you.”

Depressing.

crazy_legs on February 29, 2008 at 8:39 AM

Like a used car salesman. “What do I have to do to put me in office today?” Clumsy, but you get the point.

beefytee on February 29, 2008 at 8:43 AM

Obama wants to nationalize the same tired, failed, protectionist schemes and heavy taxation/unionization that has made Michigan a basket case.

It’s an “economy” heavy on resentment and entitlement and light on a work ethic and initiative. It’s an “economy” based on hostility to productive people and counterproductive social programs for indolent idlers.

Since Obama seemingly is seeking to emulate Michigan, how about he select the Mayor of Detroit, Kwame Kilpatrick as his VP: http://www.kwamekilpatrick.com/

Mayor Kilpatrick is another slick, young, smooth talker whose message of hope (hype), hypnotized people. They elected him despite his lack of experience and qualifications.

And – he’s been a complete and utter failure.

Let’s not make the same mistake when it comes to electing a President.

NoDonkey on February 29, 2008 at 8:43 AM

I admired Ronald Reagan, Ronald Reagan was a friend to the people, Obama is no Ronald Reagan!

highhopes on February 29, 2008 at 8:23 AM

If there’s a similarity between Reagan and Obama, it obviously has nothing to do with their political views, but instead has to do with their personalities. Both seem to be likeable, even to people who disagree with them on the issues.

That said, when it comes to substance, you are 100% correct.

crazy_legs on February 29, 2008 at 8:39 AM

The interesting thing about Reagan and Kennedy is how similar their policies were. Both stood up to the Soviets during their respective presidencies. Both correctly called communism evil, Reagan with his “evil empire” remark, and Kennedy in his Ich Bin Ein Berliner Speech. Both cut tax rates. And while the left faults Reagan for “putting civil rights on the back burner”, as I’ve heard it stated, no real civil rights legislation came out of Kennedy’s term (although I must concede that he had less time). Yet, while their policies are similar, the left regards JFK as a quasi-saint, and Reagan as the devil himself.

Bigfoot on February 29, 2008 at 8:51 AM

Bigfoot, I think you’re making too many generalizations. While I agree, and your logic is sound, most people who post on this blog would consider me a liberal, and I agreed with much of what Reagan did. I think he is one of America’s greatest presidents.

I’m not even sure how much the President should involve themself with things like civil rights. They should champion the words written in the constitution and the bill of rights, but beyond that, the states and the people (that’s right we have obligations) are ultimately responsible for their liberty.

beefytee on February 29, 2008 at 9:00 AM

Um…. excuse me.

As a GRADUATE of William Jennings Bryan College, I have to say:

What the heck are ya’ll smokin?!

Ok, so they both appeal to the masses or whatever, so they both used fear to stir the populas. The was genuine reason for the masses to fear during the turn of “that” century. Barrack is simply spouting cliche’s and jousting with paper dragons.

Do NOT compare Don’t even put Obamomma in the same paragraph with “The Great Orator.”

Puhlease!

y2church on February 29, 2008 at 9:06 AM

At the Ft. Worth rally last night, Obama repeated the “CEO making more in ten minutes than the employee makes in one year” spiel. McCain needs to expose him on this fallacy. I read somewhere recently where someone did the math and this just doesn’t add up. Shouldn’t he be calling out Oprah on her earnings???

carbon_footprint on February 29, 2008 at 9:06 AM

I guess you have to say this… when the fear from the other side isn’t working.

Monkey see monkey do politics

TOPV on February 29, 2008 at 9:10 AM

The Economist acknowledges that Democrats usually drop the populism when it comes to general elections. That was certainly true of Bill Clinton

But wasn’t that part of what made Clinton unique, that he moved to the middle to remain popular? I think other Democratic presidents governed more as populists.

Populism is obviously popular this year. Mike Huckabee is a populist, too, although he is more conservative than Obama.

TX Mom on February 29, 2008 at 9:15 AM

carbon_footprint on February 29, 2008 at 9:06 AM

The Obama campaign is hitting them out of the ballpark with his ‘rallies’. I’m in FW and the local news kept showing news-chopper overhead footage of the ‘masses’ trying to get in to see him. They advertise these events as first come, first served, and to show up very early. Then they make em stand in a single file line. The line yesterday went on for blocks.

That said…..Early voting turnout in Texas is record setting. Dems have out numbered Reps 4-1. I know they normally have a higher turn-out then Republicans, but 4-1?
In Texas? And a record turn out? Doesn’t look too promising too me.

Limerick on February 29, 2008 at 9:15 AM

B.O. is really good at issuing Maximum Bloviation when it comes to what he SAYS he is going to do.

The problem is that he clams up when anyone bothers to ask him HOW he plans to invoke all this wonderfulness on everyone.

And this is the exact same thing he has been doing as a junior senator here in Illinois. So don’t expect him to change his spots anytime soon.

You know, in computer terms, we refer to things like this as VAPORWARE. Essentially, nice sounding ideas that never come into actual being.

Think of anything B.O. emits as VAPORWARE. That is, until he can actual come up with something of a plan to back up all these great things he says he is going to do.

pilamaye on February 29, 2008 at 9:16 AM

I have concluded that in the same way that “NeoCon” is codewording for “JEW”, that in Liberal circles, the word “fearmongering” is codewording for the phrase “I wish you’d just SHUT the F**K UP!!!”

Shirotayama on February 29, 2008 at 9:28 AM

Remember during his first campaign W. mentioned that the economy was showing signs of weakness, and the dems lined up to castigate him for “talking down the economy,” and tried to blame the stock downturn etc on him? Remember that?

Akzed on February 29, 2008 at 9:29 AM

Oops…forgot to finish that phrase:

“Fearmongering” is codewording for:

“I wish you’d just shut the F**K up because I have no good logical argument to refute your challenge, so I have no recourse left but to try and shut you up by seeing if I can shame you into shutting up.”

Shirotayama on February 29, 2008 at 9:29 AM

So, a raging populist with true-blue talking points is running against someone that “doesn’t know much about economics.” That’s good. Keep in mind that the latter ran a successful campaign against a highly successful and thoroughly competent businessman to become the presumptive nominee.

So what does it matter that Obama is a socialist? Republicans don’t care enough about economics to nominate someone that even understands it. What makes you think the country will either?

spmat on February 29, 2008 at 9:40 AM

Who is the real Obama? The more I read, the more it’s starting to worry me. This ‘post-partisan centrist’ candidate could emerge as a radical class warrior and throw this country into historic turmoil.

petefrt on February 29, 2008 at 10:25 AM

So, a raging populist with true-blue talking points is running against someone that “doesn’t know much about economics.” That’s good. Keep in mind that the latter ran a successful campaign against a highly successful and thoroughly competent businessman to become the presumptive nominee.

So what does it matter that Obama is a socialist? Republicans don’t care enough about economics to nominate someone that even understands it. What makes you think the country will either?

spmat on February 29, 2008 at 9:40 AM

I have more confidence in the guy that McCain appoints than I do in either Obama or Clinton…unless he appoints Obama or Clinton.

beefytee on February 29, 2008 at 10:27 AM

Fear-mongering populist indeed.

Plus, Bush Derangement Syndrome will permanently infantilize the Left – they need never be held responsible for their failed policies or destructive ideas because they’ll just blame Bush (Rove, Cheney) and their followers will nod robotically.

I for one do not welcome our new temper-tantrum toddler overlords.

Gilda on February 29, 2008 at 10:48 AM

Excerpted and revised from another thread:

Obamanomics? Hillanomics? Either way, it will mean that things don’t look good from where I’m sitting.

I work for US Treasury Department Headquarters. RIGHT next to the White House. Flip over your $10 bill. I am sitting in the building you see on the back of that bill right now.
One commenter in a different thread (and lots of liberals) are wrong in thinking it’s the war that’s got us broke. It ain’t the war. When you look at the details of the federal budget and see how much the war effort is taking up, it needs to be put into perspective.

Most folks don’t know that the US government budget really needs to be thought of in two huge different chunks, one much larger than the other: The DISCRETIONARY chunk, and the NON-DISCRETIONARY chunk.

Stuff like the war, like defense and intelligence, like all sorts of social programs (excluding the entitlement programs – - this will become important in a minute), like the cost of operating the federal government’s agencies and their bureaus, etc., is part of the discretionary budget.

That’s the part that gets submitted to OMB and to Congress for review, edit, and approval every year.

The discretionary piece is a SMALL slice of the entire federal budget pie…maybe 30% to 40%…the HUGE piece is the Non-discretionary piece. And what makes up this piece?

The ENTITLEMENT programs: Social Security (huge), Medicare (Even HUGER and dwarfs Social Security), and Medicaid (not that big, actually, by comparison to the other two).

They’re called “non-discretionary” funds for just that reason: OMB and Congress have NO discretion to change the non-discretionary portion of the federal budget. They’re ENTITLEMENTS. We HAVE TO PAY them. We have no choice but to pay the social security, medicare, and medicaid payees. And if we don’t take in enough revenue (that’s right, your tax dollar and mine) to cover what we have to pay for both the discretionary and non-discretionary portions, there are only a couple of options:

1. BORROW it (Bureau of the Public Debt) and drive up the national debt and our interest owed on that debt

or

2. PRINT lots of money (Bureau of Engraving & Printing, who make the paper bills, and the US Mint, who stamp the metal coins), beyond the amounts demanded for normal economic commerce in the economy. This is often a BAD idea because it tends to send inflation skyrocketing and is one of several reasons why Germany collapsed economically after WWI. Which resulted in the Third Reich. Which resulted in an even huger World War later. Lots of dead and maimed people and lots of money lost, whole economies destroyed. Like I said, BAD idea.

Both Barry O and Shrillary want to mandate universal health insurance coverage. In other words, add MORE ENTITLEMENT to the non-discretionary budget, when we can’t borry money FAST ENOUGH to cover what we currently have, let alone once the baby boom generation starts retiring in droves. SOON.
The original commenter was right. We’re broke. But for entirely the wrong reasons. Barry O. could stop the war on a dime tomorrow, and the change in how broke we are really wouldn’t make much of an impact. SERIOUSLY.

Even IF the libs don’t take POTUS, and don’t keep both houses of congress, we’re broke. If they sweep POTUS and both houses, we’re gonna be one hell of a lot MORE broke.

Shirotayama on February 29, 2008 at 11:11 AM

The middle section of the article is pretty interesting too. It points out that the policies proposed on Obama’s website (as opposed to in his speeches) are actually much more reasonable, and that his economic advisers are good economists who support sound ideas. So there hope (!) that this really is just primary season talk.

On the other hand, it also points out that Hillary may be even worse in this respect, which is surprising given Bill’s history. Maybe she’s just trying to match Obama, but nevertheless all this rhetoric on the part of both of them is worrying.

tneloms on February 29, 2008 at 11:34 AM

Limerick on February 29, 2008 at 9:15 AM

Could the dirty-little-secret of the record turnout be the fact that half of the racist/sexist dems are voting against a female and the other half are voting against a black?

sleepy-beans on February 29, 2008 at 12:19 PM

If only more people understood this: Obamanomics is an Obamanation!

Greg Mankiw has been pointing his awful policies for a long time now.

iamse7en on February 29, 2008 at 12:27 PM

One problem, IMHO, is that the right has a less than coherent economic philosophy which is currently downplaying the harmful effects of globalization and ignoring the horrible monetary policies of Greenspan/Bernanke.

…and to prey on the fears of the working class by casting globalization as an unmitigated evil.

Globalization has uneven effects benefitting some more than others. The right needs to acknowledge the problem and keep pushing our solution which is not to intervene in the markets to benefit one group over another but to educate those who have been displaced.

Bill C on February 29, 2008 at 1:36 PM

Many people have compared Obama to Ronald Reagan in his ability to promise “morning in America,” but they have focused only on the most superficial part of the Reagan revolution.

That is a bit of an overstatement, but not to quibble as it is largely irrelevant as most swing voters don’t get down enough to see if something is an inch deep or a foot deep.

Reagan didn’t cast himself as the agent of hope,

Yes he did. That is why he won. Call him “Facilitator of hope” rather than “Agent of hope”, if you want. It doesn’t make much difference to most people who are going to decide the election.

but appealed to the hope within Americans that they could lift up the country, and not the other way around.

Yes, with his help as the agent facilitator of hope. Reagan did advocate getting the government “out of the way” that is true, and that gave a lot of people hope as a lot of people back then saw government as a big part of “the problem”, although as it turned out the size of the government didn’t go down under Reagan. Even the Dept of Education remained.

He focused on the hope of the individual as the true agent of change, and not the despair of the collective that required government intervention.

I don’t think that it is Obama’s supporters who are in despair right now. It is conservatives who are in despair and rightly so. In so much despair that few can think of anything good to say about McCain and what he will do for the country. The other guy will be worse just ain’t going to cut it.

MB4 on February 29, 2008 at 1:37 PM

2. PRINT lots of money (Bureau of Engraving & Printing, who make the paper bills, and the US Mint, who stamp the metal coins), beyond the amounts demanded for normal economic commerce in the economy. This is often a BAD idea because it tends to send inflation skyrocketing and is one of several reasons why Germany collapsed economically after WWI. Which resulted in the Third Reich. Which resulted in an even huger World War later. Lots of dead and maimed people and lots of money lost, whole economies destroyed. Like I said, BAD idea.

Shirotayama on February 29, 2008 at 11:11 AM

That’s what’s going on right now.

MB4 on February 29, 2008 at 1:48 PM

S&P down 2.08%

10 year T-note down 4.74%

MB4 on February 29, 2008 at 1:53 PM

U.S. stocks tumbled, capping the market’s fourth-straight monthly drop, after a report showed business activity fell to the lowest level since 2001 and UBS AG said losses in credit markets may top $600 billion.

Consumer spending in the U.S. rose more than forecast in January, reflecting a jump in prices that is eroding Americans’ buying power.

After adjusting for higher prices, spending stalled for a second month, increasing concern that the biggest part of the economy is faltering. Confidence among consumers is waning as fuel costs jump, property values decline and banks restrict lending.

“There is no growth in consumption except to keep up with price increases,” said Chris Low, chief economist at FTN Financial in New York. “Consumers are clearly hard-pressed to maintain their standard of living and are cutting back.”

A separate report from the National Association of Purchasing Management-Chicago showed American business activity contracted this month. The group’s business barometer declined to 44.5, the lowest since December 2001, from 51.5 in January.

MB4 on February 29, 2008 at 1:57 PM

“It’s the economy, stupid.”

MB4 on February 29, 2008 at 1:59 PM

Consumer spending in the U.S. rose more than forecast in January, reflecting a jump in prices that is eroding Americans’ buying power.
MB4 on February 29, 2008 at 1:57 PM

Yes. The increased consumer spending was due mostly to higher prices rather than more purchases.

The economy is ugly right now. McCain better keep the “economy, stupid” post-it on his desktop because if he can’t convince people that he’s got better answers than Obama, he’ll lose.

It’s not enough to believe that Obama’s prescriptions are harmful, since they are appealing on the surface and harmful down the road.

dedalus on February 29, 2008 at 6:44 PM

First Post at this site.

It is entirely possible that Obama is simply saying what he truly believes, and we should take his words at face value.

Obama’s links to former 60’s radicals (a couple of domestic bombers: William Ayers and Bernardine Dohrn), his community organizing in Chicago, and his early influence from “Frank” (apparently Frank Marshall Davis identified as a member of the Communist Party USA), suggest that Obama has a certain, politically-controlled, view of economics. We’ve seen these ideas, and they failed, long ago.

Then there’s Obama’s absence of accomplishments. Other than to get elected (and in Chicago, a town known for political machines and the debts incurred), there seems to be nothing. Even his supporters on TV come up with nothing. To some degree, Obama has never run against real opposition and had to justify his ideas; his opponents were Democratic candidates with essentially the approved views.

Obama may be unable to see that his ideas are naïve, unworkable, or failed. The influence of “Frank”, Ayres & Dohm, the Hyde Park intelligensia, etc., not withstanding, Socialism, Communism and “Class warfare” objectively failed about the same time the Berlin Wall fell.

It’s time for serious intellectual scrutiny of values and ideas, and the party machine cannot provide protection. There’s some evidence that Obama expects to be able to say what he wants, yet not be questioned or held to account.

This is not the stuff of which real leaders are made, and it’s time to say so.

Arbalest on March 1, 2008 at 1:44 AM