{"id":1166,"date":"2011-05-02T22:47:53","date_gmt":"2011-05-03T04:47:53","guid":{"rendered":"http:\/\/www.orderofephors.com\/?p=1166"},"modified":"2011-05-02T22:47:53","modified_gmt":"2011-05-03T04:47:53","slug":"straightjacket-economics","status":"publish","type":"post","link":"https:\/\/www.orderofephors.com\/?p=1166","title":{"rendered":"Straightjacket Economics"},"content":{"rendered":"

The post-industrial era in the United States has been dominated by two vastly different economic philosophies \u2013 the Keynesian model and the Supply Side model.\u00a0 Keynesian theory, generally associated with economic policies of Democratic presidents\u2026 and to a lesser degree Republican presidents\u2026 from Roosevelt through Obama, is a macroeconomic<\/a> theory based on the ideas of 20th century British economist John Maynard Keynes<\/a>, first published in 1936.\u00a0 \u00a0<\/p>\n

Keynesian economists contend that private sector<\/a> decisions sometimes lead to \u201cinefficient<\/a>\u201d economic outcomes, necessitating some form of government intervention\u2026 including fiscal policy measures by the executive and legislative branches and monetary policy<\/a> actions by the Federal Reserve.\u00a0 Keynesian economists advocate a mixed economy<\/a> \u2013 mostly private sector, but with major involvement of government and the public sector.\u00a0 The stimulus spending programs of the Bush (43) and Obama administrations were uniquely Keynesian in nature.<\/p>\n

The Supply Side model, most often associated with the economic policies of Ronald Reagan, brought an era of economic expansion that began in the late 1980s and lasted throughout the 1990s.\u00a0 It provided the Bush (41) and Clinton administrations with twelve years of low taxes, low price inflation, full employment, ever-increasing tax receipts, and revenue surpluses.\u00a0<\/p>\n

Also known as \u201ctrickle down\u201d economics, Supply Side theory insists that high marginal tax rates and overly-aggressive government regulation discourage private investment that fuels economic activity, and that more capital in the hands of the private sector, as opposed to government bureaucrats, will produce jobs and wealth that \u201ctrickle down\u201d to the rest of the population.\u00a0 The truth of it is self-evident.\u00a0 \u00a0\u00a0\u00a0<\/p>\n

Although liberals and Democrats attempt to credit the Clinton administration with the economic boom of the 1990s, any objective analysis will show that it was the \u201clag effect\u201d of the Reagan tax cuts and the regulatory reforms of the 1980s that were responsible for the decade’s economic boom.\u00a0 It was not until the tax increases of the Bush (41) administration, the politicization of the Community Reinvestment Act (CRA) during the Clinton years, the artificially-created real estate \u201cbubble\u201d of the 1990s, and the devastating economic impact of the 9\/11 attacks that the positive impact of supply side economics was temporarily stifled.<\/p>\n

Now comes \u201cObamanomics,\u201d a make-it-up-as-you-go economic philosophy heretofore unknown to mankind \u2013 an economic model that might also be called \u201cstraightjacket\u201d economics because the underlying policies are intended to restrain<\/em>, not unleash<\/em>, the economic vitality of the nation.<\/p>\n

For example, the United States is a country that runs on oil.\u00a0 And while liberals and Democrats spend an inordinate amount of time extolling the virtues of \u201calternate\u201d and \u201crenewable\u201d sources of energy\u2026 wind, solar, geo-thermal, biofuels, etc\u2026 when asked for a timetable when those magical sources of energy will be available, and economically viable, they simply ignore the question or change the subject.\u00a0<\/p>\n

Instead of junketing around the country on Air Force One, teleprompter in hand, an entourage of hundreds trailing along behind, touting so-called \u201cclean energy\u201d projects, Obama could solve most of our energy problems with a single stroke of the pen.\u00a0 He could open the outer continental shelf, the wilderness areas, and the Arctic National Wildlife Reserve to oil and gas exploration; he could reverse the negative impact of Bill Clinton\u2019s decision to lock up additional low sulfur coal reserves; and he could eliminate the roadblocks to development of nuclear power plants.\u00a0 But he doesn\u2019t do that.\u00a0 Instead, he promotes policies that increase our dependence on foreign oil while selling the liberal pipedream of \u201cclean,\u201d \u201cgreen,\u201d and \u201calternative\u201d energy sources.\u00a0 \u00a0\u00a0<\/p>\n

As matters now stand, approximately 85% of U.S. energy supplies come in the form of coal, oil, and natural gas and it is unlikely that we will see that percentage change appreciably during our lifetime.\u00a0 The United States imports approximately 60% of its 20 million barrel per day crude oil requirements (4.4 billion barrels per year) from regions of the world\u2026 the Middle East, Africa, and South and Central America\u2026 that have become increasingly hostile to U.S. interests.\u00a0 And while those countries control some 913 billion barrels of proven reserves\u2026 enough to supply U.S. needs for more than 200 years\u2026 the cost of that oil grows and grows as China, India, and Japan challenge the U.S. for economic supremacy.\u00a0<\/p>\n

Any reasonable person would conclude that it is long past time for the United States to produce as much of its own energy requirements as possible, but that\u2019s not part of the \u201cStraightjacket\u201d economic plan.\u00a0 Instead, at a time when jobs are scarce and American families are struggling to buy enough fuel to power their cars and heat their homes, Obama continues his search for more and more creative ways to prevent low cost energy from reaching the U.S. market.\u00a0<\/p>\n

In the aftermath of the BP oil spill in the Gulf of Mexico, Obama and his White House czars falsified a report by a team of his own offshore drilling experts, making it appear as if the panel had recommended a six month moratorium on all new drilling in the Gulf.\u00a0 And when a federal district judge set aside the moratorium, Obama and his outlaw Interior Secretary, Kenneth Salazar, simply ignored the court order.\u00a0 \u00a0\u00a0<\/p>\n

Between the time of the first offshore well, drilled in sixteen feet of Louisiana waters in 1947, and the completion of a well in 10,011 feet of water, in 2004, 200 miles offshore, some 42,000 wells have been drilled in the Gulf with little or no environmental impact.\u00a0 Today, some 72% of Gulf oil is produced from wells drilled in 1,000 ft. or more of water.<\/p>\n

In a Dover, NH speech during his 2008 campaign, Obama said, \u201cI can make a firm pledge.\u00a0 Under my plan, no family making less than $250,000 a year will see any form of tax increase. \u00a0Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.\u201d However, as a result of his Gulf drilling moratorium, the Louisiana Midcontinent Oil & Gas Association estimates that the idling of 33 offshore drilling platforms will result in the loss of 46,200 jobs and some $330 million per month in lost income.\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n

But that represents only the direct<\/em> impact of Obama\u2019s economic policies.\u00a0 Just imagine for a minute the indirect impact on American workers and their families.\u00a0 If, as has been suggested, the price of gasoline goes to $5 per gallon as a result of Obama\u2019s energy-killing policies and his challenge to Middle Eastern populations to fight for more democratic government, the economic impact on American workers will be profound.\u00a0 A worker who earns $50,000 a year and who drives fifty miles to and from work, will see his\/her monthly gasoline bill increase from $250 to $500 (from $3,000 to $6,000 per year)\u2026 an Obama-imposed\u00a0 \u201ctax\u201d of $3,000 per year.<\/p>\n

Assuming that electric power costs would keep pace with fuel costs, that same worker will find his\/her electric power costs increasing from $2,100 per year to $4,200, an Obama energy \u201ctax\u201d increase of $2,100.\u00a0 Together, they represent a 10.2% energy \u201ctax\u201d increase on that worker\u2019s gross income.\u00a0 Recently we learned that the Obama administration has voided the clean water permit of a West Virginia coal producer, reversing a 2007 decision by the Bush administration.\u00a0 The New York Times<\/em> reports that the EPA has revoked a permit for Arch Coal\u2019s mountaintop-removal coal mining project, one of the nation\u2019s largest.\u00a0 It was the first time the EPA has rescinded an existing clean water permit for a new development mine.<\/p>\n

Inasmuch as Obama has called on corporate chief executives to unleash hundreds of billions of dollars in cash reserves to stimulate economic expansion and job creation, the EPA action is seen by business groups as \u201cadding to a difficult economic climate because of excessive regulation.\u201d The US Chamber of Commerce issued a statement saying that the EPA\u2019s decision sent a \u201cvery unsettling message to American business\u201d and threatened the fragile economic recovery.\u00a0 The Chamber said, \u201cEPA\u2019s unprecedented action to retroactively deny a permit changes the rules not just in the middle<\/em> of the game, but at the end<\/em> of it.\u00a0 This is exactly the kind of practice that will keep capital on the sidelines.\u201d<\/p>\n

Perhaps the most telling example of the end result of Obama\u2019s \u201cStraightjacket\u201d economics can be found in the City of Detroit where people and businesses have fled the city and the school district faces a $327 million shortfall.\u00a0 The Wall Street Journal<\/em> reports that the district has already closed 59 public schools, proposes to close 70 of the remaining 142 schools, and expects to increase high school class sizes to 62 students.\u00a0 A Journal<\/em> spokesperson has said, \u201cThe budget gap is partly due to the property tax revenue collapse as the Motor City crumbles, as well as financial mismanagement and a surge in pay and benefits for public employees\u2026 It’s hard to think of a sadder commentary on a government so fiscally desperate and so captured by its workers that it may be forced to abandon property to thieves. \u00a0But are they the scavengers or (is it) the union?\u201d<\/p>\n

The economic decisions and policies of the Obama administration are unlike any ever imposed on a functioning society.\u00a0 They are not intended to enhance<\/em> the lives, the liberties, and the happiness of the people.\u00a0 They are intended to destroy<\/em> liberty and property.\u00a0 What better way to accomplish that than to saddle the people with unworkable economic policies\u2026 policies that will feel like an economic \u201cstraightjacket\u201d to workers and employers alike.<\/p>\n","protected":false},"excerpt":{"rendered":"

The post-industrial era in the United States has been dominated by two vastly different economic philosophies \u2013 the Keynesian model and the Supply Side model.\u00a0 Keynesian theory, generally associated with economic policies of Democratic presidents\u2026 and to a lesser degree … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/posts\/1166"}],"collection":[{"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1166"}],"version-history":[{"count":1,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/posts\/1166\/revisions"}],"predecessor-version":[{"id":1167,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/posts\/1166\/revisions\/1167"}],"wp:attachment":[{"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}