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The Obama presidency: Here comes socialism. By
Dick Morris
He will create a
permanent electoral majority that does not pay taxes, but counts on
ever-expanding welfare checks from the government.
2009-2010 will rank with 1913-14, 1933-36, 1964-65 and 1981-82 as years that
will permanently change our government, politics and lives. Just as the
stars were aligned for Wilson, Roosevelt, Johnson and Reagan, they are
aligned for Obama. Simply put, we enter his administration as
free-enterprise, market-dominated, laissez-faire America. We will shortly
become like Germany, France, the United Kingdom, or Sweden — a socialist
democracy in which the government dominates the economy, determines
private-sector priorities and offers a vastly expanded range of services to
many more people at much higher taxes.
Obama will accomplish his agenda of “reform” under the rubric of “recovery.”
Using the electoral mandate bestowed on a Democratic Congress by restless
voters and the economic power given his administration by terrified
Americans, he will change our country fundamentally in the name of lifting
the depression. His stimulus packages won’t do much to shorten the downturn
— although they will make it less painful — but they will do a great deal to
change our nation.
In implementing his agenda, Barack Obama will emulate the example of
Franklin D. Roosevelt. (Not the liberal mythology of the New Deal, but
the actuality of what it accomplished.) When FDR took office, he was
enormously successful in averting a total collapse of the banking system and
the economy. But his New Deal measures only succeeded in lowering the
unemployment rate from 23 percent in 1933, when he took office, to 13
percent in the summer of 1937. It never went lower. And his policies of
over-regulation generated such business uncertainty that they triggered a
second-term recession. Unemployment in 1938 rose to 17 percent and, in 1940,
on the verge of the war-driven recovery, stood at 15 percent. (These data
and the real story of Hoover’s and Roosevelt’s missteps, uncolored by
ideology, are available in The Forgotten Man by Amity Shlaes, copyright
2007.)
But in the name of a largely unsuccessful effort to end the Depression,
Roosevelt passed crucial and permanent reforms that have dominated our lives
ever since, including Social Security, the creation of the Securities and
Exchange Commission, unionization under the Wagner Act, the federal minimum
wage and a host of other fundamental changes.
Obama’s record will be similar, although less wise and more destructive. He
will begin by passing every program for which liberals have lusted for
decades, from alternative-energy sources to school renovations,
infrastructure repairs and technology enhancements. These are all good
programs, but they normally would be stretched out for years. But freed of
any constraint on the deficit — indeed, empowered by a mandate to raise it
as high as possible — Obama will do them all rather quickly.
But it is not his spending that will transform our political system, it is
his tax and welfare policies. In the name of short-term stimulus, he will
give every American family (who makes less than $200,000) a welfare check of
$1,000 euphemistically called a refundable tax credit. And he will so
sharply cut taxes on the middle class and the poor that the number of
Americans who pay no federal income tax will rise from the current one-third
of all households to more than half. In the process, he will create a
permanent electoral majority that does not pay taxes, but counts on
ever-expanding welfare checks from the government. The dependency on the
dole, formerly limited in pre-Clinton days to 14 million women and children
on Aid to Families with Dependent Children, will now grow to a clear
majority of the American population.
Will he raise taxes? Why should he? With a congressional mandate to run the
deficit up as high as need be, there is no reason to raise taxes now and
risk aggravating the depression. Instead, Obama will follow the opposite of
the Reagan strategy. Reagan cut taxes and increased the deficit so that
liberals could not increase spending. Obama will raise spending and increase
the deficit so that conservatives cannot cut taxes. And, when the economy is
restored, he will raise taxes with impunity, since the only people who will
have to pay them would be rich Republicans.
In the name of stabilizing the banking system, Obama will nationalize it.
Using Troubled Asset Relief Program funds to write generous checks to needy
financial institutions, his administration will demand preferred stock in
exchange. Preferred stock gets dividends before common stockholders do. With
the massive debt these companies will owe to the government, they will only
be able to afford dividends for preferred stockholders — the government, not
private investors. So who will buy common stock? And the government will
demand that its bills be paid before any profits that might materialize are
reinvested in the financial institution, so how will the value of the stocks
ever grow? Devoid of private investors, these institutions will fall ever
more under government control.
Obama will begin the process by limiting executive compensation. Then he
will urge restructuring and lowering of home mortgages in danger of default
(as the feds have already done with Citibank).
Then will come guidance on the loans to make and government instructions on
the types of enterprises to favor. God grant that some Blagojevich type is
not in charge of the program, using his power to line his pockets. The
United States will find itself with an economic system comparable to that of
Japan, where the all-powerful bureaucracy at MITI (Ministry of International
Trade and Industry) manages the economy, often making mistakes like giving
mainframe computers priority over the development of laptops.
But it is the healthcare system that will experience the most dramatic and
traumatic of changes. The current debate between erecting a Medicare-like
governmental single payer or channeling coverage through private insurance
misses the essential point. Without a lot more doctors, nurses, clinics,
equipment and hospital beds, health resources will be strained to the
breaking point. The people and equipment that now serve 250 million
Americans and largely neglect all but the emergency needs of the other 50
million will now have to serve everyone. And, as government imposes ever
more Draconian price controls and income limits on doctors, the supply of
practitioners and equipment will decline as the demand escalates. Price
increases will be out of the question, so the government will impose
healthcare rationing, denying the older and sicker among us the care they
need and even barring them from paying for it themselves. (Rationing based
on income and price will be seen as immoral.)
And Obama will move to change permanently the partisan balance in America.
He will move quickly to legalize all those who have been in America for five
years, albeit illegally, and to smooth their paths to citizenship and
voting. He will weaken border controls in an attempt to hike the Latino vote
as high as he can in order to make red states like Texas into blue states
like California. By the time he is finished, Latinos and African-Americans
will cast a combined 30 percent of the vote. If they go by top-heavy margins
for the Democrats, as they did in 2008, it will assure Democratic domination
(until they move up the economic ladder and become good Republicans).
And he will enact the check-off card system for determining labor union
representation, repealing the secret ballot in union elections. The result
will be to raise the proportion of the labor force in unions up to the high
teens from the current level of about 12 percent.
Finally, he will use the expansive powers of the Federal Communications
Commission to impose “local” control and ownership of radio stations and to
impose the “fairness doctrine” on talk radio. The effect will be to
drive talk radio to the Internet, fundamentally change its economics, and
retard its growth for years hence.
But none of these changes will cure the depression. It will end when the
private sector works through the high debt levels that triggered the
collapse in the first place. And, then, the large stimulus package deficits
will likely lead to rapid inflation, probably necessitating a second
recession to cure it.
So Obama’s name will be mud by 2012 and probably by 2010 as well. And the
Republican Party will make big gains and regain much of its lost power.
But it will be too late to reverse the socialism of much of the economy, the
demographic change in the electorate, the rationing of healthcare by the
government, the surge of unionization and the crippling of talk radio.
Morris, a former adviser to President Bill
Clinton, is the author of Outrage. To get all of Dick Morris’s and Eileen McGann’s columns for free by email, go to www.dickmorris.com. To order a
signed copy of their new best-selling book, Fleeced, go to
dickmorris.com Posted: 01/20/09
Michigan Republican Dave Camp presses the Joint
Committee on Taxation about job creation in the Democrats' proposed stimulus
bill. He could not confirm that this bill could produce one job.
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