The further to the left or the right you move, the more your lens on life distorts.

Wednesday, November 07, 2012

Transformative Event

To paraphrase a well-worn aphorism—Fool us once, shame on you; fool us twice, shame on us.

Barack Obama is re-elected for another four years. Obama’s win is remarkable, given his four-year record of economic failure and foreign policy missteps. It demonstrates that a demagogic campaign strategy that pits one segment of the population against another while at the same time demonizing an opponent early and often is an effective lever that can overcome an atrocious record— historic levels of unemployment, staggering debt, growing levels of government dependency, and a chaotic, ineffective foreign policy. It also demonstrates that the demographics of the United States are changing, and that those who depend on government are becoming an increasing large voting block. So be it. Barack Obama continues on as President.

After he was first elected to the Presidency in 2008, I wrote the following in this blog:
I HOPE that Obama does well and that my reservations about him were overblown and incorrect. Nothing would please me more than to see him address the problems we face with intelligence and good judgment. The country needs that.

I HOPE that he’ll select advisors who are wise before they are ideological …

I HOPE that he’ll mature very quickly as he takes office, recognizing that government cannot and will not solve all of our problems …

I HOPE that he’ll recognize that wealth in America is NOT a zero sum game …

I HOPE he’ll recognize that just as force is not necessarily a strength, talk is not necessarily a solution …

I HOPE that he’ll come to understand that the United States of America is NOT the cause of … the hundreds of ills that pervade the planet …

I HOPE that he’ll learn that our country’s interests do not always align with those of our allies and trading partners …

I HOPE that he’ll avoid appeasement at all cost …

I did not vote for Barack Obama [in 2008], but I wish him well. As a person who believes that the center of politics offers the best road forward, I will hope that his promises of bipartisanship will be kept. That his claims of good judgment will be verified as the months and years pass. That his charisma will morph into effective leadership for all Americans. If those things happen, his election will have been a good thing, maybe even (as Colin Powell remarked) a “transformative” event.
After observing Barack Obama as President in the intervening four years, I’m saddened to say that every one of the HOPEs I wrote about the morning after the 2008 election have been dashed. Every. One.

I have no HOPE that Barack Obama will do anything different in his second term. He is far too hubristic, ideological, and politically combative for that. Our debt will continue its frightening upward spiral, our politics will become even more fractured, and our foreign policy will ping pong between meaningless talk and rudderless action. I also worry that his infamous side comment about “more flexibility” will lead to an ‘unplugged’ Obama that is even more extreme during the next four years.

In re-electing Barack Obama to a second term, the majority of American voters have demonstrated that style trumps substance, that words mean more than results, that excuses, finger-pointing, and blame assignment are now an acceptable characteristic of presidential leadership, and that incompetence is something to reward, not punish.

Ironically, by postponed the worst of his legislation until after the 2012 election, Barack Obama has set the stage for even more bad results over the next four years. In essence, he has made it harder on himself.

The re-elected President delayed most of the high cost, high impact Obamacare mandates until after this election, setting the stage for still another drag on business and erasing any hope of significant job growth. By insisting that "massive, job-killing tax increases" (Obama’s own words in 2010) become law on January 1st, he provides a disincentive for investment, penalizes seniors whose primary source of income is investments (capital gains increases occur both as a consequence of Obamacare and as part of Obama’s new tax rates), and further removes the potential for a strong recovery.

On the international front, the seeds that Obama sowed in the Middle East have yielded poisonous fruit throughout the region. In addition to explaining the major scandal that is “Benghazigate,” he’ll have to deal with newly empowered Islamists (including al Qaida) throughout the region, and in theory (my bet is he will not) confront Iran as it closes in on developing nuclear weapons.

Barack Obama was quick to blame George W. Bush when the myriad failures and broken promises of his first term became apparent. I wonder if he’ll blame the President who was in office from 2009 – 2012 when he struggles to correct the damage he has already caused. Then again, I suspect that Barack Obama doesn’t see the economic damage, or the profligate spending, or the hyper-partisan legislative failures, or the foreign policy missteps his policies have caused. And at the end of the day of his re-election, that might be the most worrisome aspect of all.

In the end, this election is a "transformative" event. As the years pass, government dependency will grow and with it, a voting block that will increasingly demand more spending on its every need. There will be little concern about financially unstable programs and entitlements, we'll just continue to borrow and tax—and despite the fantasy currently in vogue, new taxes won't be levied only on "millionairies and billionaires." Politicians like Barack Obama are at the leading edge of those who will happily feed the ravenous demands of a growing dependency class, and as a consequence, our debt will grow until it begins to crush our initiative. The nation has chosen this path. It will be interesting to watch the results.

Update (11/8/12):

John Hinderaker provides commentary:
I can see only one good outcome from yesterday’s election: the fact that Barack Obama will be the president who inherits the mess left by Barack Obama. The economy is in awful shape; it won’t get much better given Obama’s policies, and may get worse. Many billions of dollars in capital that have been sitting on the sidelines, awaiting the outcome of this year’s election, will now give up on the United States and go elsewhere. Plants will be built in Korea and Brazil that would have been built here if the election had gone differently. The chronically unemployed–a group that is larger now than at any time since the Great Depression–aren’t going back to work. Nor are the millions who have signed up for permanent disability. Incomes will continue to stagnate. I don’t understand why anyone would vote for four more years of unemployment and poverty, but that is what the American people voted for, and that is what they are going to get.

But I digress: back to the silver lining. Obama will now have to reveal his agenda for a second term, heretofore a closely-guarded secret. In particular, what is he going to do about the nation’s $16 trillion debt? Obama’s answer during his first term was “nothing.” His budget, incorporating any number of optimistic assumptions, called for the debt to rise to $20 trillion. I don’t see how Obama can get through his second term without articulating some plan, however half-baked, for dealing with the debt. Ben Bernanke can’t keep interest rates at zero for another four years; at least, I don’t think he can. As soon as interest rates start to rise, the budget–no, wait, we don’t have a budget, but you know what I mean–is blown. It will be difficult for the press to conceal from the American people the fact that we are broke.
And this gloomy little tidbit from Tyler Durden:
The first day of the "next 4 years" is starting in a very auspicious fashion. First, the market crashes. Then, a major blue chip company, Boeing, just announced it would cut 30% of management jobs from 2010 levels. And finally, the US Treasury just added $24 billion in debt, or enough to fund Greece for over one year, sending the total debt load (the US is now at 103% debt/GDP) ever closer to the debt ceiling breaching $16.4 trillion. But don't worry: over the next 4 years, the US government will add another $6-8 trillion in debt, so those who didn't get their allocation in this auction will have more than enough opportunity.
Just speakin' truth to power, folks.