Most political analysts do well to remember this axiom: avoid assigning to malice what can be explained by incompetence. Kevin Hassett of Bloomberg News wonders whether that applies to Barack Obama and his performance on the economy. Hassett makes the argument that Obama has declared war on business, and that the stumbles of his administration appear calculated for maximum damage:
It is no wonder that markets are imploding around us. Obama is giving us the War on Business.
Imagine that some hypothetical enemy state spent years preparing a “Manchurian Candidate” to destroy the U.S. economy once elected. 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.”
These steps would create near-term distress. 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.
Obama spent plenty of time on the campaign assuring people that he had no hostility towards business and Wall Street, but at best one can say that he had no particular affinity for them, either. Obama came out of an environment of Leftist political and economic thought. It should come as no surprise to anyone who paid attention that he acts on economic policy as someone from that environment would. We’re seeing the Leftist playbook on economics, to the extent we have one at all.
Does that make Obama a “Manchurian candidate”? No. It does make him an elitist who thinks that he and his big-brained buddies can run the economy better than the markets can do themselves, in such a way as to guarantee equality of outcomes. Like others on the American Left, Obama sees the business world as hopelessly warped as long as it produces winners and losers. When he told Joe Wurzelbacher that he wanted to “spread the wealth”, he meant it — and sees that as the role of government, perhaps the primary role of government.
Just as Hassett makes the claim that Obama has crashed the markets on purpose, one can make the case that he’s incompetent — completely out of his league and clinging to his ideology rather than financial acumen. That case is much easier to make, since it doesn’t involve divining intent. We already see the results of Deadbeatonomics, as well as the thoroughly unprepared and outclassed staff of advisers that seem stuck in first gear at Treasury and the White House.
Which interpretation is correct? We’ll find out soon enough, but in the end, it may not matter all that much. Both will take us to the same place, and we have a long time before we can replace Obama. That’s what makes 2010 more important for Republicans.