What Caused the Train Wreck of “President Obama”

As millions ponder their regret over voting into office “President Obama,” it’s important to think of why he got there. Think back to the fall of 2008, when he was elected. A majority of Independents, who just as often vote Republican as Democrat, and who probably vote Republican for President more than Democrat, reached the conclusion, “The rich have too much money. They took from everyone and that’s what caused the financial disaster.”

The hapless McCain and Palin fed this attitude no less than Obama, and of course they lost because why settle for socialist lite when you can get the real thing? As reality settles in, more people are starting to realize, or at least sense, that it’s not a matter of the rich having “too much” money which now must be “spread” to the middle and poorer classes. When the economy suffers, everyone has less. The rich have less, the middle class have less, and the poor have less. In a thriving economy, everyone gets richer.

The question is, why did the economy tank so badly in 2008? There are many reasons, but the most significant one was the bursting of the real estate bubble. This affected nearly every sector of the economy, and still does to this day. What most people don’t yet understand is that this happened because of government intervention in the economy.

First during the Clinton Administration, and later during the Bush Administration, the government created incentives and requirements for private lenders to lend to millions of people who could not possibly afford to pay their mortgages. This was a government-created bubble, not a bubble created by business people acting rationally in a marketplace where they knew they’d be held accountable for their actions. The government later made matters even worse by bailing out the private sector — which in one odd sense was justified, since the government had created the mess in the first place, although they’d never acknowledge it. We’re now left with a government that intervenes more than ever, and has now carved into stone requirements for the government to bail out politically favored companies in future crises which, in turn, justifies unprecedented government control over the entire financial sector and monetary system. Put plainly: Before 2008 and 2009, we had a mixed economy, a combination of free market capitalism and socialist controls. Today, in 2010 and beyond, we face an economy that is still, technically speaking, a mixed economy, but one much more heavily relying on socialist controls than ever before in the United States.

It’s fair to say, in my judgment, that America has reached and passed the tipping point, and is now a socialist-leaning mixed economy. Liberals and Democrats will not rest until the government totally controls everything. If they don’t lose, and lose badly, in 2010 and 2012, they’re going to seek to advance and possibly even complete their agenda of total socialism. Republicans talk a good game about the superiority of capitalism or free markets over socialism, but they have never once yet delivered this in action when they get power. Capitalism will continue to get the blame for all the evils and consequences of government intervention in the economy. I talk with Republicans who don’t even get this. Republicans insist that we need government intervention in the economy, only somewhat less than the Democrats propose. They let the Democrats set the terms or the standard, and suggest fighting for maybe 20 percent less intervention, or maybe 30 percent less. These are not principled positions, and they come from either moral cowardice or fuzzy thinking. You have to know what you’re FOR in order to be against something, and you’re not against something if you support only a lesser amount of it than your opponent.

The only good thing I can say is that as things get more precarious, the issues of principle will become more stark and more clear. I can’t predict what will become of America. But I am sure that 20/20 vision is on its way. America will soon have to put on its glasses. And then we’ll have a real, principled debate on our hands, at long last.