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Source link: http://archive.mises.org/9390/what-the-stimulus-debate-teaches-us/

What The “Stimulus” Debate Teaches Us

February 6, 2009 by

Barack Obama is stupid. This isn’t a case of name-calling. The man has demonstrated a frightening lack of intelligence during his first days holding the honorary title “president of the United States”. He thinks redistribution of consumption – in the amount of nearly one trillion fiat dollars – will “stimulate” the economy, and that failure to do this will unleash “catastrophe.” It’s one thing not to understand the basic tenets of economics, but to publicly stomp your feet when others refuse to ignore reality and embrace your false beliefs can only be interpreted as a lack of basic intellectual capacity.Having said that, Obama is largely blameless for the current situation. The Government of the United States is composed of a large revolving cast of characters, and the president’s role is largely symbolic. Obama is a spokesman for the state, not its leader. While the political oligarchy – which includes the establishment press – stages elections every few years to create the illusion of “change,” in truth each new presidency is a continuation and assimilation of the prior reigns. Bill Clinton gave way to George W. Bush. Coming into office, both men were portrayed as pragmatic southern governors who would “change the tone” in Washington; Bush was an improvement simply because he didn’t fornicate in the Oval Office. Similarly, Obama’s presence addresses the key criticism of Bush, his lack of polished speaking skills in staged settings. But all three presidencies are indistinguishable on the merits.

While the oligarchy presented Obama as the candidate of “hope” – incidentally, they used the same word for Bill Clinton, who was literally born in a “place called Hope” – a more accurate descriptor is “desperation”. Starting with the coronation 17 days ago, there has been panic throughout Washington; many in the oligarchy recognize that there is no play after Obama. After Clinton and Bush, the public won’t be duped again into placing their economic destiny in the hands of a man with no obvious qualifications or talents. Playing upon Obama’s skin color was the last trump card, but the effect is temporary and already dissipating. After this, what can the oligarchy try? Maybe Sarah Palin, but that could provoke civil war within the oligarchy. The terrifying truth is that after the orgy of political consumption that was the Obama presidential campaign, the bubble has burst, and elections will cease to be relevant going forward. Without the power to manufacture consent, the entire fabric of the United States – as a political entity, not a society – will swiftly crumble.


TC February 6, 2009 at 6:47 pm

Excellent post, but I disagree with the premise that the game is up for the political class. We as a society have a very short collective memory, and as long as we are not deprived of our 2-day weekend full of NFL and NASCAR, we are entirely content to spend our entire lives in economic serfdom. After all, that is what we are programmed to do.

Timothy February 6, 2009 at 6:58 pm

Isn’t it possible that Obama is smart enough to know exactly what he’s doing? The stimulus bill is rotten economics, but may yet be brilliant politics. Obama is still consolidating his power, and my guess is he’s heeding Bob Higgs’ insight, and the advice of his factotum Rahm: never let a crisis go to waste.

After all, if the fiat gravy train is about to go off the rails, the most sensible thing for politicians is to grab everything possible right now, before the opportunity for trillion dollar larceny vanishes permanently.

Kevin February 6, 2009 at 7:20 pm

To say Obama (or any other politician for that matter) is stupid is far too generous. I am convinced more with each passing day that if we could invade the space between each politicians ears we would not find brain matter…we would find a cartoon mouse playing Mexican folk tunes. These people are incapable of rational thinking and I shutter to think what the next 4 years have in store.

Mike February 6, 2009 at 8:22 pm

How do we get Americans to see that we can’t afford to have our cake and eat it too. Someone is going to have to suffer for real change. I see tax cuts for ALL and a serious political will to totally overhaul social security and medicare, and not to mention, drastic cuts in gov’t spending as the only way to economic growth. “True” capitalism and “true” free trade require certain sacrifices. This is AMERICA and only here can we, or anyone have a real chance at true freedom. Lets not be sheep.

NB February 6, 2009 at 8:32 pm

I am also perplexed at the situation. Is he economically illiterate or using a crisis to pass an agenda? Either one is frightening….

Franklin Harris February 6, 2009 at 8:45 pm

Obama is certainly not stupid. He is doing exactly what he’s set out to do: enact the parts of the Democratic Party’s agenda that didn’t pass in the past eight years. This is just like how the Republicans and the hawkish Democrats enacted everything they’d wanted for years with the Patriot Act. Both were agendas sitting around waiting for a crisis the politicians could use as a pretext to pass them.

And that third paragraph is, at best, wishful thinking.

Silas Barta February 6, 2009 at 8:53 pm

S.M._Oliva: Barack Obama can hardly be blamed for believing what he does about “economic stimulus”, given that the respected “experts” who advise him are teaching him exactly that.

I think we need to turn our attention to how much libertarians are giving in to this. I’ve seen too many libertarians recently accept the premise that “economic activity needs to increase” or “d…don’t worry, saved money will still get spent, it’s okay”.

We we should be saying is:

“If no stimulus happens, and so Americans produce less, buy less, pay down debt, and have more leisure … *that’s okay!* Really!”

JB February 6, 2009 at 9:18 pm

I agree with Silas,

Maybe what the downturn is really telling us is that we truly don’t have to work that hard! People seem to be convinced that one HAS TO work a bajillion hours a week to get ahead in life. Where if more people work less and get paid less, prices would adjust.

Just a thought.

Jeremy February 6, 2009 at 9:42 pm

Ad hominems aren’t going to do much to advance the cause of freedom, especially when they’re directed at the President.

Most people are sensitive about that kind of stuff.

And Obama is obviously a very intelligent guy by most standards – that he lacks knowledge of real economics and an ability to reason in a crystal clear manner is without doubt, but he’s not stupid.

Of course, his policies are incredibly stupid, and that is what should be called out instead of this name calling.

Ohhh Henry February 6, 2009 at 9:43 pm

All that bright, shining promise he showed during his time in the Office of the President Elect, frittered away in only 17 days.

And worse, it’s all downhill from here.

S.M. Oliva February 6, 2009 at 9:56 pm

Jeremy –

“Most people are sensitive about that kind of stuff.”

Those people need to get over themselves.

Silas — excellent point. I wholeheartedly concur.

Michael Green February 7, 2009 at 12:55 am

When it comes to the question of intelligence, I feel Bush and Obama are mirror opposites. Bush was seen as stupid, yet he was probably well aware of what he was doing; Obama is seen as smart and reasoned, but I think he really does have a simplistic and dangerous view of economics.

You have to wonder why people are so afraid of freedom. How bad could things really be if we were allowed to spend our money as each of us saw fit?

EP Heidner February 7, 2009 at 4:33 am

Did anyone who comment read the constraints on commenting? “Post an intelligent and civil comment.” Just a lot of opinion here….I found no documented facts, nor civility, nor intelligence.

Natasha February 7, 2009 at 5:53 am

Obama is really very stupid , he as all politicos is going to do exactly what he didnt say in his very very professional and practiced speech . Consider he couldnt take the oath properly without stumbling and mumbling the words . but his speeches were flawless . Practiced delievery or some tech trick . like microphone nyways …
Just for starts he said he would eliminate corruption and what does he do ?? put people who didnt pay tax in postions of decision making .
Keynesian economics is the biggest laugh , in all these years not a single case of that working has been proven . The state shoudl be a mere facilitator of business and create infrastructure for smooth running of business and trade .NOT BE IN BUSINESS BY Nationalising everything .
THE CANCEROUS hands should be chopped off from spreading the cancer .THIS ANy kintergarten kid knows ..

..Obama he is stupid . USA is gone . If the trillions go into a black hole which is imploding anyway what is the use of throwing it there ..

John Hawk February 7, 2009 at 6:01 am

E P Heidner: Kudos to you on ‘Collateral Damage’…!!!
On Sept 12, 2001, I conversed with a prominent Senior Presiding Federal Judge in an East Coast city and told him I had been informed that massive amounts of evidence regarding future high-level prosecutions was destroyed in the T-T bombing…He called me a ‘conspiracy theorist’. I said to him, ‘make some calls…’. A week later he called me to say what I told him was accurate, and hung up.

Your work connects the dots of many true Patriots who
knew from the beginning that the fascist cabal of the elite is behind the demise of our Republic.

I hope we hear more from you, sir! I have forwarded ‘C D’ to many, many people.


Anne Cleveland February 7, 2009 at 7:42 am

We are getting precisely what was expected from the recent campaign. Millions flocked to the polls and voted for Obama. More than a hundred elected nut-heads voted approval of this insane package.
This is , “schock and Awe” tactics. The result of destruction of the free market, which political government did., resulting in this current crisis. A crisis created by government, for government. deliberately to accomplish this approval of a trillion for government.
thanks Anne Cleveland

Dennis February 7, 2009 at 8:45 am

The most frightening aspect of the Obama “stimulus” plan is not his ardent support of it, but the strong support given to it by the large majority of the economics profession, who should know better. But this is not surprising, since most economists are not objective truth seeking scientists, but prostitutes, propagandists, and apologists for the political class hiding behind a pseudo-scientific positivist methodology.

As others involved in this post have pointed out, Obama’s stimulus plan makes excellent political sense, a fact that I am sure he is acutely aware of. A top level advisor to FDR once said, and I paraphrase, we are going to spend, spend, spend and elect, elect, elect.

Virtually all politicians and their handlers should be placed on a large boat, without any means of navigation, in the middle of the Pacific Ocean, far away from land and without food or fishing equipment. Then they can do to themselves what they have done to us for far, far too long. This treatment of the political class would amount to nothing but self-defense by the truly ethical and net producers of society.

Unfortunately, we have the politicians that we do because the large majority of individuals generally support the ideology that underlies their actions. Ethically, when government is concerned, most individuals have little respect for the property rights and economic and civil liberties of others. And regarding economic policy, most individuals do not think past the irrational something-for-nothing mentality.

Hopefully, the Nockian “remnant” and reason will eventually assert themselves.

fundamentalist February 7, 2009 at 8:45 am

President Obama isn’t stupid. You can’t become president of the US and be stupid. He’s merely arrogant in the way Hayek describes their arrogance in “Fatal Conceit.” Of course, that arrogance caused them to believe stupid things and do stupid things. As Orwell wrote, some ideas are so stupid only an intellectual can believe them.

Justin February 7, 2009 at 9:11 am

I’m not sure if the man’s stupid. I just think throughout his election campaign he promised every political group connected to the democractic party of all the things they were going to get once he became president. Now with a generational spending bill coming down the pipe and the perfect “crisis” used as cover, this guy has got to deliver for them. He just ran a $1billion election campaign. This money came from somewhere and these people expect results.

But good analysis either way: the man is not a leader, just a spokesman.

fundamentalist February 7, 2009 at 9:39 am

President Obama isn’t stupid. You can’t become president of the US and be stupid. He’s merely arrogant in the way Hayek describes their arrogance in “Fatal Conceit.” Of course, that arrogance caused them to believe stupid things and do stupid things. As Orwell wrote, some ideas are so stupid only an intellectual can believe them. President Obama is a very intelligent man, but as Hayek wrote, intelligence is highly overrated. Wisdom requires humility.

Walt D. February 7, 2009 at 10:12 am

fundamentalist said
“President Obama isn’t stupid. You can’t become president of the US and be stupid.”
Close your eyes and keep repeating the following mantra:
Jimmy Carter

Bill Jones February 7, 2009 at 10:45 am

I agree that the third paragraph seems to be wishful thinking; most people in America still get their “information” from the corporate media. The web provides a glimmer of hope but the kleptocracy is working on ways to control the flow of information there.

CleanthesBrule February 7, 2009 at 10:57 am

The word stupid is sometimes distinguished from the word ignorant.
Ignorant means “don’t know”. Stupid means, “willing to do things that are wrong or don’t work”. Stupid people can be intelligent, if also very unwise.

W Bush often didn’t care to know. He was ignorant. Obama is stupid to the extent he intentionally does wrong things even though he should know better. High intelligence coupled with a great deal of incorrect “facts” is worse than ignorance.
As the saying goes, “It ain’t what you don’t know, it’s what you know that ain’t so.”

Domesh February 7, 2009 at 11:46 am

It is of no surprise to me that Obama would want a massive government “fix” here. It is his way given his worldview. I should be as surprised that a sparrow takes flight. As we all know, such measures do not solve economic problems, they merely prolong and often exacerbate them. This is the inherent quagmire we fall into when politicians seek to apply a political solution to an economic problem. Few consider the fact that their “solutions” are mere trade-offs.

It remains a curious thing about Socialism in general that Keynesian approaches almost always produce a short-term benefit. And since elections occur in the short-term this is politically advantageous. But the long-term effects of such policies are markedly detrimental. Because we often get the benefits now while the costs are both dispersed over a long period and/or materialize far into the future, politicians and demagogues generally lack the will to examine the merits logically beforehand or empirically afterwards.

prettyskin February 7, 2009 at 3:08 pm

“Barack Obama is stupid. This isn’t a case of name-calling.” Why clarify? Did you thought it was name calling? Moreover, you could have do without these two sentences.

“Obama’s skin color was the last trump card…”
Really, here are some more trump cards:
-First Asian-American President
-First Hispanic-American President
-First Female-American President
-First Openly Gay-American President
-First Transgender-American President
-First Dwarf-American President
And this list can grow…on and on.

Lee February 7, 2009 at 3:24 pm

I liked this line:

“…but to publicly stomp your feet when others refuse to ignore reality and embrace your false beliefs…”

Indeed, Obamanomics is the golden calf of our times.

Ted February 7, 2009 at 8:46 pm

No to “stimulus” bill. Here’s why:
Since Obama’s earnest drive to convince the nation to weaken its economic strength through redistribution as well as weaken its national defense, has confirmed the very threats to our Republic’s survival that the Constitution was designed to avert, it no longer is sustainable for the United States Supreme Court and Military Joint Chiefs to refrain from exercising WHAT IS THEIR ABSOLUTE CONSTITUTIONAL DUTY TO DEFEND THE NATION FROM UNLAWFUL USURPATION. The questions of Obama’s Kenyan birth and his father’s Kenyan/British citizenship (admitted on his own website) have been conflated by his sustained unwillingnes to supply his long form birth certificate now under seal, and compounded by his internet posting of a discredited ‘after-the-fact’ short form ‘certificate’. In the absence of these issues being acknowledged and addressed, IT IS MANIFEST THAT OBAMA REMAINS INELIGIBLE TO BE PRESIDENT UNDER ARTICLE 2 OF THE UNITED STATES CONSTITUTION. Being a 14th Amendment ‘citizen’ is not sufficient. A ‘President’ MUST BE an Article 2 ‘natural born citizen’ AS DEFINED BY THE FRAMERS’ INTENT.

gmathol February 8, 2009 at 2:51 am

The yes we can, should be translated in yes we can’t think.

Poor Americans.

Daimon February 8, 2009 at 4:55 am

I do not agree with Obama’s simulus plan but at least the man is trying to do something. If Obama is showing a lack of intelligence, what did Bush show us in bringing us to this point?
Please lay the blame where it belongs. Obama is trying to fix the fuck-ups created by George W. Bush. Do you think you could do better if you were president?
People are so quick to criticize but chances are you would not know what to do if you were in the same position.
How can you say that Obama’s presidency is indistinguishable from Bush’s when Obama just stepped into office?
Judge the man 3 years from now but not a month after he took office.

Ed February 8, 2009 at 9:05 am

Obama is neither stupid nor ignorant. What he is, is EVIL.

Horst Muhlmann February 9, 2009 at 9:23 am

Ed said:

“Obama is neither stupid nor ignorant. What he is, is EVIL.”

That is a false dichotomy (trichotomy in this case?). Why can’t he be all of the above?

Ron February 9, 2009 at 11:02 am

What amazes me are the people who think Obama is intelligent just because he doesn’t look goofy when he’s listening. They seem to actually think that his appearance indicates his intelligence. Listening is a good thing, but it can also be the indication of not having a clue.

The man is an empty suit.

Chris February 25, 2009 at 5:01 pm

It is disturbing to see that as a nation we have moved so far from the discussion of wealth creation. Perhaps the vast majority of us no longer have any notion of what wealth is or how it is created and destroyed. Or perhaps we simply don’t realize its importance.
We have based all our recovery plans on consumption, and on ways to lure or stimulate people to spend and accrue debt. We plan to consume trillions of the wealth we have today hoping that we will then be better off tomorrow and crisis will be averted—seemingly without considering how much less wealthy we will be when all that “seed” has been eaten.
In terms of government spending, wealth creation takes the form of a highway, a power grid, a rail line, power plants, schools, new fuel cell infrastructure, etc—things that make it possible to create yet more wealth—things that cost a dollar today and enable the production of two dollars tomorrow—things that might be called investments.
Any spending that does not add to wealth of the nation is a destruction of wealth. Defense spending is wealth destruction. All social safety net programs are wealth destruction. All redistribution is wealth destruction. Some of these are necessary things to have, but they leave us poorer and we need to realize that. The question we should be asking about any item in the stimulus is: “What return are we getting on this money the government is investing and when will we see that return.” If there is no return, then that money is wealth destroyed. The debate we should be holding is not how to stimulate the economy but how to create wealth—not on where to spend money but on where to invest it.

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