The Obama Stimulus Plan Part 2: An Example of Pervasive Socialist Blindness to Economic History

Feb, 2009

By

P. Gardner Goldsmith

            In his February 9, 2009 “evening news conference” that left reporters swooning for more, President Barack Obama offered a large number of economic fallacies, but none was more glaring than his belief that Franklin Roosevelt, and his “New Deal” lifted the United States economy out of the Great Depression.

            To quote: 

“There have been criticisms, from a bunch of different directions, about this bill, so let me just address a few of them. Some of the criticisms really are with the basic idea that government should intervene at all in this moment of crisis. You have some people – very sincere – who, philosophically, just think the government has no business interfering in the marketplace. And, in fact, there are several who’ve suggested that FDR was wrong to intervene back in the new deal. They’re fighting battles that, I thought, were resolved a long time ago.”

            To be charitable, let’s take Mr. Obama’s statement apart with as much dispassionate analysis as possible, rather than toss invective his way for what is clearly one of the most ignorant statements made since, well, since George Bush tried to say the word “nuclear”.

            First, he offers his observation that there are people who, philosophically, think that the government has no business interfering in the marketplace. There is an air of disbelief in this statement, as if President Obama, a man who swore an oath to uphold the US Constitution and who stands before a press corpse ready to “study” his ideas, is astonished that anyone could possibly harbor the misguided belief that government cannot do anything to help the market. He seems to be comfortable among kindred spirits there in the room, among reporters who also believe what he does, and are stunned by the anti-government, pro-individual heresy he mentions.

            It just so happens that most of the Founding Fathers who helped gain independence from Great Britain, and most of those who helped craft the US Constitution, were of precisely that opinion. They understood the strict definitions of words, and, as a result, they understood that there was a difference between government and society. “Government,” as George Washington (who made his own share of mistakes, most notable among them attacking the Whiskey Rebels in Pennsylvania) said, “is force”. John Locke, the British philosopher upon whose work the Founders based most of the Constitution, was famous for explaining that the only proper function of government was to protect lives and property from aggression by others, not to interfere in the private market. In fact, such an action would work in complete opposition to the philosophical principles of “Natural Rights” upon which the US Constitution was based. Mr. Obama swore an oath to uphold the Constitution, but refuses to acknowledge these facts. He also chooses to ignore the reality that freedom requires an understanding that there is no proper role for government interfering in the market, for if it does, it contradicts the principles upon which it was founded; it attacks freedom.[i]

            But what about economics? It might surprise people like President Obama, but economics and liberty cannot be disconnected. Only through total freedom can one properly employ his labor and skills, and only through total freedom can one receive the price information from the marketplace that facilitates him making good decisions with his labor, skills, and property. Any impediment, any interference in the free use of one’s labor, skills, time and capital – as people have suffered more and more since the creation of the US government – is a drag on the economy. When Barack Obama says there are some people who believe that government has no place interfering in the private market, he is precisely right. That strange belief was prevalent in the Founding Era -- hence the attempt by the Founders to restrict the powers of the federal government to only those functions actually specified in the Constitution, and to stop government from interfering in private contract – and it is still embraced today.

            What Barack Obama expresses in such politically charged rhetoric is a widespread acceptance of ideas that stand in complete contravention to those upon which the US government was founded. It is a socialist mindset, promoted by ignorance and by an agenda to raise government up as the savior of lives, rather than the most powerful drag on productivity ever created.[ii] It is derived from a lineage that goes back to the deadly ideas of Plato, the infamous philosophy of Rousseau, and the destructive concepts of Marx, Engles, Mao, Stalin, Lenin, Hitler, Hamilton, Clay, Lincoln, both Roosevelts, Hoover, Nixon, Johnson, Carter, Bush, Ford, Bush, and Clinton, among many, many others. It is also a political position that has been repeated ad infinitum in government schools.
            For decades, ignorant history teachers have told kids that “Roosevelt’s New Deal” lifted the US out of a depression inspired by the reckless free market, that “government intervention” saved people from poverty and turned the economy around.

            Nothing could be further from the truth. As indicated, logical analysis of how productivity grows, and how standards of living are bettered, reveals that lives can only be bettered through freedom to engage in private contract free from interference by others, especially government.

            But to address the specific Obama talking point of whether FDR “saved” the economy, and whether that is a debate that has been dead for years, please refer to my book, “Live Free or Die”, or one of the best pieces on the subject, “Great Myths of the Great Depression”, by Lawrence R. Reed, now President of the Foundation for Economic Education.

            Listen to our audios for Obama’s statement, and a portable, aural, version of this piece, plus segments of Lawrence Reed’s great essay.

http://www.mackinac.org/archives/1998/sp1998-01.pdf

            Be Seeing You!