08 November 2012

Election 2012: Obama

I don’t think Obama’s second term will be as bad as conservatives expect, but it will be much worse than progressives expect. In all reality, the president isn’t all that powerful. Most of the power in this country is concentrated in the hands of the banksters, who control the central bank and, to a somewhat limited extent, the economy. Furthermore, the central bank implicitly controls the bureaucracy since it pays for it (by monetizing a significant portion of the federal deficit year after year), and the bureaucracy has more power than the president. Basically, the president is a figurehead whose main power is controlling the troops and pardoning people. As such, the president is very limited in what he can do.

That said, the popular practice of treating the president as a scapegoat, no matter how factually wrong it may be, is still an enjoyable pastime for many. However, for conservatives, they won’t be able to use Obama as a scapegoat as often as they expect to. In the first place, Obama will likely govern as a lame duck president. He already passed Obamacare, so his big legislative accomplishment is out of the way. Additionally, his trend of the last two years is to do as little as possible. Case in point: look at what he hasn’t done. He hasn’t created much in the way of race controversies in the last eighteen months; he hasn’t significantly raised taxes; he hasn’t started a whole bunch of long-term wars; he hasn’t committed any major gaffes or pissed of allies. He really hasn’t done much of anything over the last eighteen months except play golf. I don’t see why he would change.

For liberals, however, it is a different story. The honeymoon period of ObamaCare is over. Now the taxes must begin. Soon, the rationing will as well. The economy is not going to get better at all. Unemployment will rise, especially for young folk. Everyone’s standard of living will decline. The accumulated consequences of easy money, moderate inflation, deficit spending, free trade, high taxes, and petty regulations will all come crashing down. This is unavoidable; the only question is of timing. There are rumors of (God help us) QE4, in the event that the inflation levels of QE3 are not high enough to spur consumer spending. Of course, even if consumer spending does pick up dramatically, all it will do is cause a bubble while depleting or preventing the accumulation of long-term capital stock, making the recovery more difficult and more prolonged. Plus, the current monetary inflation supply coupled with the recent decrease in the food supply will guarantee that either short term food prices will rise or employment related to food production and distribution will decrease. In short, it’s not going to be pretty. If Obama continues his support for the Keynesian central banking policies that contributed to this mess, he will only be making the problem worse, and its consequences more severe and immediate.

This is not to say that the current mess is entirely of his making. Rather, it is the result of progressive policies that can, in many cases, trace their root to John Adams’ appointment of John Marshall to the Supreme Court. Since that day, the federal government has grown increasingly and unconstitutionally powerful. And it has been progressives from Wilson onward that have increased the rapidity of the pace by which this country marches towards socialism. All presidents from FDR onward, with the possible exception of Eisenhower, have contributed to progressive bent of federal policy, and so all Obama has done has been to continue in the same self-destructive policies that were practiced by Bush before him, and Clinton before him, and Bush before him, and Reagan before him, and Carter before, and so on and so on, etc., etc. Nonetheless, there is a strong chance that the inevitable self-destruction of progressive policies will occur on Obama’s watch, and this mess will get hung around his neck. This will be fortunate, in a symbolic sense, insofar as people are willing and able to learn the lessons that history will harshly teach them.

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