The Wall Street Journal reports that economists give the Obama administration failing grades for economic policy. (Hat tip: Hot Air.) The criticisms include not delivering on campaign and Presidential promises, a lack of specifics for implementation of policies, and the lack of investor confidence (the Dow is down almost 20% since Geither’s announcement of the Obama recovery plan).
The most interesting part of this – and of many of the Treasury’s excuses – is that there are not simply enough people in the federal government to carry out the tasks of bailing out private banks, nationalising industries, and implementing the bailout. On a superficial level, such rationalisation is ridiculous: the Treasury is short-staffed because a Democrat President cannot get a Democrat-run Congress to appoint his people. That party’s failure is hardly some divinely-created apocalyptic crisis. More importantly, it reveals an underlying, fundamental problem with the policies of the last few months (and, to some extent, since the New Deal): the federal government is not equipped to deal with these radical expansions in power because it is operating so far outside of its jurisdiction. The economic failure we are seeing now is a direct consequence of the fact that the federal government overstepped its constitutional limits and ability to govern.
When Gov. Patrick extols the wonders of the stimulus bill and talks about all the glorious funding we will receive, just remember: $22 million of the $125 million slated to go to this state will be for the John F. Kennedy Museum, and another $5.2 million will go to a memorial for Teddy Kennedy. (Hat tip: Michelle Malkin.) While these may be noble projects that will improve Boston’s cultural life, they are not appropriate expenditures during the worst economy in several decades, especially when financed with debt. Furthermore, they are not remotely issues of national importance that would justify federal (as opposed to state) spending; in fact, they are the types of projects usually financed with privately, perhaps with a minimum amount of state funds. As such, they should not be named for or after anyone except for the charitable donor or the honouree of that benefactor’s choosing. Even assuming that these funds should be spent, by the federal government, for these projects, those projects should be named after the donors: the American taxpayer.
Thomas Sowell elucidates the inanity of pay caps for CEOs. My one addition to this is that the wrong people are targeted by these proposed pay caps. If one CEO were to run a company into bankruptcy, his pay should be, in theory, absolutely nothing: he did not add anything to the corporation. If his successor, a turnaround specialist, were to take over and make the formerly insolvent, struggling company into a profitable enterprise, then the value placed upon his work should be limited only by market rates and the amount of wealth he has added to the company. The theory behind the pay caps (i.e. that there is no injustice in shortchanging one executive because his predecessor was overpaid) is vindictive and counterproductive: it does not target the individuals who harmed their companies, but rather limits the salaries of those who clean up the mess.
Despite Obama’s countless campaign missives about fiscal conservatism and the excesses of George W. Bush, his administration is set to match Bush’s 8-year expenditures in less than two years. (Hat tip: RedMassGroup.) Some of this is because, despite his campaign promises to the contrary, Obama has signed a budget into law that includes over 8,000 earmarks. Obama’s response to angered voters is that the bill needs to be signed, and that he will tackle the earmark problem later. Poppets: listen to what he does, not what he says; he’s just not that into you.