Obama Is Leading Us Down the Road to Economic Hell

A conservative economist named Woody Brock has written a long, persuasive analysis that the Obama administration is taking us down a dangerous path on the economy. Brock's primary thesis is this:

The fact that the U.S. is temporarily taking on truckloads of debt to fight this crisis is actually not as big a concern as many people think. The debt is fine if we put policies in place to reduce it going forward. Unfortunately, in Brock's opinion, we're not doing that.

What would the right policies be?

1. Policies that encourage growth, including less regulation, more immigration, and more infrastructure spending to drive future productivity gains;

2. Reduced government spending as the economy improves.

Brock observes that Obama's current agenda is almost the opposite -- slow growth, more regulation, permanent spending increases, and the wrong kind of spending (on entitlements and social programs, not infrastructure). He thinks this could eventually lead to disaster.

I voted for Obama, and I think he's mostly doing a great job. I also don't agree with everything Brock says (obviously, we need to tighten some regulation). I must admit, however, that I find the hear of his argument persuasive.

I've posted Brock's whole argument on The Business Insider.

Comments

[PhilipTaylor]

Principled and Principal-ed OUTRAGE!

Executives=300 to 500 times income of Average Worker

Executives Income 30,000% to 50,000% the Income of the Average Worker

# ! Greediest Nation = # 1 Debtor Nation = America = BANK Owned Federal Reserve Debt System

[Carolab]

RE: taxes.

The ever-widening gap between the upper 2% and the rest is growing. This is what it means when over 50% of the population is below average. A 10% differential between the proper norm and the real numbers is a serious social problem. Having more and more rich people does not automatically translate into a bigger middle class. Quite the opposite. High taxes on the rich coupled with strong labor laws protecting workers from exploitation leads to a growing middle class.

People in the US, growing up on anti-social propaganda, can’t understand this simple fact. Again and again, history patiently tells us, this is what works. All social systems based on not taxing the rich and powerful end up in slavery and poverty for the masses. A no tax system means the rich simply run up debts in the name of all the people. Then, they turn around and say, ‘You all better pay up or you will die. See this splendid army you made for us? They will protect us during our secret meetings where we discuss how to enslave you further. Now, kneel before your masters or die!’

All our tax cutting and flatting of the tax tables has turned the tables on the US middle class which is shrinking, not growing. There is the appearance of growth but only because debts grew. Not CAPITAL.

http://emsnews.wordpress.com/2009/05/22/inflation-cannot-cure-depression/#more-3754

[blueken]

He lost me on "growth". Addiction to growth is what got us here. Every year has to top the last. Every inflated sales figure must be higher in the next quarter. Anyone ever heard of the "Law of dimenishing returns"? How about the "Malthuseion theory"? Eventually you have to burn down the last tree to plant one more row of corn. Sooner or later you have to ship product to the spacestation to get one more customer. Addiction to growth leads to risk takeing. Hello, anybody...­..does this ring any bells.....­.anybody..­...does it make sense? Why is it a good idea to buy a faltering company with borrowed money? You end up with a faltering company and a mountain of debt, but this is what addiction to growth leads to. When you can't find anymore people to lend money to, that have the ability to pay the loan back, you start lending money to people who can't pay it back. Make sense? Anything for growth, especialy when it comes to executive compensation. Let's hire someone who can't get by on less than 45 million dollars a year in income, to manage our assets. Make sense? The first thing that CEO does is take risks so he can make 50 million. Why?

[Carolab]

He is referring to REAL growth -- growth of the real economy, not of the FIRE industries.

[dsws]

Obama wants to deal with the deficit by tackling entitlements, particularly by changing the health care system to control costs. Brock wants to cut earmarks. I think it's clear who's serious about it and who isn't.

[ron ray]

By Blodget's standards, Obama seems to be on the right course. we do need more regulation in some areas, as he -- but not the Bushian economist he cites -- says. Obama also plans to ease the deficit as the economy improves.

so why he's convinced doom is imminent I can't quite fathom.

[Carolab]

Because the proposed "regulation" isn't regulation; it's more self-regulation. It's a hoax.

[dsws]

Calling for more deregulation, even now? What would it take to get over right-wing ideology, mass starvation? Growth doesn't come from fraud and bubbles. Sound regulation is necessary for growth, not harmful to it.

[Carolab]

Excellent essay and I find little to disagree with in it, even his points on regulation -- he mainly focuses on steering clear of regulating markets that require more innovation (venture capital) and pose little systemic risk.

I also believe that this is not a problem of "competence". I believe the parties in power know exactly what they are doing. The question is whether or not Obama understands the end game and agrees with it or not and whether or not he actually has any control over it.

[BumpyKnight]

In your last sentence you questioned Obama's understanding of, agreement with, and control over some "end game". I must confess that I have never even heard of it. So please, Carolab, for the sake of the ignorant, describe just what this is. Does it have any relation to "End Times" philosophy?

[Carolab]

Nice try at discrediting me but it won't work.

The author refers to the "end-game", not me.

[munki]

OUR PROBLEM is POLITICS! and HUMAN GREED+ABUSE!

[William1950]

I have come to believe the problem is not economic..­. the problem is with our very human tendencies­... ..."I have met the enemy, and the enemy is us." ...
nothing will change because we are not changing.
Greed, Intolerance, Guilt, Fear, Judgment, Blame, Ignorance, Hubris, Religion..­. all the strife across this planet from the economy to war to famine are the result of human nature.
Look, listen, and read the so called explanations and so-called solutions the many self proclaimed experts tout... they all involve finger pointing, blaming, fear mongering, guilt, and pride....
it's all bs.

[munki]

First of all... nothing is perfect but... something can be said...

YOU HAVE A GREAT POINT!

[BBackSoon]

The idea that Greed it Good and ‘He who dies with the most toys wins.’ Is what our major problem is. We are constantly sold on the lifestyles of the rich and famous. Show me some more pictures of the 80ft yacht.

Is it such a bad thing to simply want to have a decent life? I don’t need a Bentley, or 5 houses. But I would like to pay all my bills, keep my health insurance and still have enough to take the wife out once in a while and maybe even go on vacation from time to time. But the greedy people want to take that extra money out of my pocket all the time.

The drive for ever increasing profits by business is killing the customers.

[DedicatedDiva]

There is no problem that cannot be solved if basic rules of humanity are followed.
It's not the computer folks, its the operators :-)

[Carolab]

Did you read the article? He argues quite cogently that the problem is NOT greed, that you cannot blame the crisis on ordinary people for being greedy but rather on the extreme leveraging within the financial industry.

[William1950]

they are mere people running the financial industry and they got greedy, there should be a new word for it.. beyond greedy. the problem IS greed. manufacturing sacrificed quality, and productivi­ty.... not to mention their workers and consumers.­.. to the almighty profit.. lower costs and more bottom line. Wall street invented matrices so enable them to virtually create dollars from nothing.. if that is not greed, ignorance, hubris... tell me what it is.
greed unchecked.­. no amount of regulation will work because they/we will play another proverbial card from our sleeve.
he argues a false premise.

[MilwaukeeDan]

Mr. Blodget, I don't know who Woody Brock is(and don't care), but I respect Peter Schiff(a man who predicted much of this mess) even though I don't agree with some things he preaches. Schiff is also one of those anti regulation guys, he doesn't believe the government should save any company that screwed up, no matter what the consequences and I agree, no bailouts. We are in uncharted waters here and no one knows where we are headed, but at least I'll buy a little of what the guys who predicted this mess are selling and Schiff is also talking "economic hell".

[MaximMaximus]

Dr Brock's bio says "Dr. Brock founded SED in 1985, and in doing so was sponsored by Fidelity, GE Capital, IBM Pension Fund, and twenty other institutions looking for a much deeper level of analysis of interest rates and the economy." And are you surprised he's advocating what he's advocating. He needs to serve his paymasters! So who cares what Brock has to say?

[watchTVgetSTUPID]

New Jersey has dropped aggregate payroll'ed employees back to the same level as in 2000. That means no net creation of jobs since 2000. And to make it worse, government jobs increased by 100,000 and non government jobs decreased by 100,000.

Its a hollow economy folks with no way to sustain itself.

[drymartini1]

i thought private companies were evil and govt was great.

its a great day when most people will work for the govt. *grin*

[DiogenesOfAlaska]

The dichotomies of evil and good (or great, for that matter) have not helped. We've tried this. Not just for 8 years, but for 3000 years now.

Grow up. Buy a color TV.

[frankstallone]

This is sort of the point I've been making; it's not that I don't understand the Keynesian economic approach - it's that it doesn't apply to us because we don't normally run balanced budgets and we'll never pay it back.

[LittleSanityLeft]

After all that's happened any "expert" who touts "less regulation" as a fix for a bad economy instantly gets the bums rush.

Here's another bit of expert advice. If every American owned a gun there would be less violent crime. I could easily argue this point and you'd "find the hear of (my) argument persuasive", but in truth it would really be self serving drivel, just like Woody Brocks piece.

[JBS]

The problem with owning a gun is "THEY" won't let you shoot the idiots who need shooting. Waste of money. Waste of time.

[economics101]

Deregulation started it...Both deregulation,and regulation are usually bad.Our government should be small enough to fit in a garage.I'm very sure that I can spend my better way more efficiently than Obama can.

[DiogenesOfAlaska]

When was the last time you calculated your personal optimum defense budget? And how do you provide monetary stability for yourself? Do you buy billions of dollars in currency reserves to make sure you're on the right track?

And if you manage your retirement all by yourself, how do you enforce that the people or firms who received your funds will pay anything back when you retire? Do you buy a really big gun for that purpose?

[Fremon]

Say's the man who touted a stock (Exodus) which he knew was not one to tout. For you info Henry, the stock is still in court and I haven't received a dime yet after several years. I purchased additional shares based on your and other's stock guru touting a loser. Why should we listen to you on this?