I hate to be the messenger of bad news -- I'm always looking for the bright side. However, there are hard data now emerging to suggest the liberal agenda advanced by President Barack Obama for the past eighteen months is failing miserably. It isn't just your imagination. I have been stunned -- more honestly AMAZED -- that we have been revisiting socialist ideas as the way to heal America's economy. I thought we had grown up in our thinking.
But I digress. Here are the top four reasons I'm seeing:
1. The housing market is still in dire straits despite all the bailouts and the stimulus legislation that's been thrown at it. Instead of the government trying to solve this problem, letting foreclosures proceed and the market finding its own bottom, the administration has actually slowed the readjustment in pricing by artificially trying to prop it up. The first-time home buyer tax credit expired in July. The result from this artificial "prop" to housing pricing was predictable, reaffirming we haven't found the bottom yet. This week, the National Association of Realtors reported July sales of existing homes fell by 27 percent from June of this year and by 25.5 percent compared to July 2009. The annual sales rate of 3.83 million homes, they stated, was the lowest since NAR began keeping track of sales in 1999. Further, the Commerce Department reported July sales of new homes fell 12.4 percent from June and by 32.4 percent compared to July 2009. The annual rate of 276,000 new units sold is the lowest since 1963, when government records were first kept. The source of the plunge is no secret: July's numbers reflect the first month when existing home sales received no boost from the home buyer tax credit.
2. New automobile sales are drying up after the ill-fated "Cash for Clunkers" program ended. Again, it was an artificial "fix" that didn't fix anything. New automobile sales tanked when the program ended. General Motors' sales dropped 36 percent in September 2009 compared with August. Ford collapsed by 37 percent, and Chrysler sales dropped by a similar percentage, 33 percent. So who's benefiting in the car market? It's not the manufacturers of new vehicles. Used car sales have rocketed up this year, and your local mechanic is doing a land office business. Because everyone's credit has been dinged, people are hanging on to their used cars and getting them repaired or buying a lower-priced used car. It can be traced to the government's intrusion into the marketplace. When does the government finally wake up to the reality that you can't provide a "free lunch" to everyone? When you provide this grab bag of goodies with borrowed money from the Chinese, you don't create new wealth in the U.S. All that happens is the government moves money around from one "pocket" to another, but nothing of value is being created. It's Economics 101. Unfettered markets would find the right places to put the money without a government-mandated program.
3. Stimulus spending isn't stimulating much at all. Government spending does not stimulate economic growth. All it does is move resources away from one sector of the economy to another. Pick any "central government" in the world -- their track record for correctly and efficiently allocating resources is abysmal. The USSR, with a GNP 1/6 the size of the U.S. economy in the 80s was outspending us in military spending 3:1. We all know how Ronald Reagan exploited that disparity and convinced Mikail Gorbachev their priorities were going to bankrupt them. All Reagan had to do to end the cold war was to convince them we were not the least bit interested in their destruction. Remember "MAD?" It was the acronym for Mutually Assured Destruction, and it was flawed. When government attempts to allocate resources, jobs are lost, not created, in the shuffle and the transfer of the resources. Why liberals can't see this simple fact is hard to fathom. I was astounded back in February 2009, when I heard President Obama, say: "This is not something that we're just doing to grow government. We're doing this because this is what the best minds tell us needs to be done." That statement is either naive or intentionally misleading. Evidence from past history suggests exactly the opposite. The "best minds" in today's administration must be dead wrong in their assumptions. Forty-five years ago, when he was still Governor of California, Ronald Reagan asserted: "Anytime you and I question the schemes of the do-gooders, we're denounced as being against their humanitarian goals. They say we're always 'against' things — we're never 'for' anything. Well, the trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so." I told you he was the "common sense purveyor," remember? You could lift that line right out of today's headlines -- "The Republicans are the party of 'No.'" Things haven't changed much.
4. The Home Affordable Modification Progam has been a dismal failure. I was invited to participate in the program last year -- one year ago this month -- by making three months of reduced mortgage payments during a "trial period." So I made the first three trial payments, then the fourth, fifth, sixth, seventh, and eighth without so much as a word about what was happening to my loan. Finally, four months ago I was told I was approved for my modification, and to be sure to look for my new modified mortgage papers in the mail "within a matter of days." You guessed it -- nothing yet, and we're now in the second year of waiting patiently for President Obama's rescue package. Some stimulus. At a meeting last week with leading economic bloggers, attended by Obama's economic advisor, Treasury Secretary Timothy Geithner, the program designed to help homeowners avoid foreclosure was discussed. Not surprisingly, the "best minds" in government judged "HAMP to be a qualified success because it helped banks muddle through what might have been a fatal shock." Really? Because it "helped banks" it's a success? Really? And what about the little people? How's that been working out so far for all of you?
Shocked at the admission that HAMP was meant to bail out banks and not help owners, Media Matters fellow Duncan Black wrote: "When Liberalism Doesn't Work It Discredits Liberalism."
Liberalism is not working. Socialism is a failed experiment. Charles Krauthammer weighed in on this topic in the Washington Post. As usual, he nailed it on the head with even more ammunition than I've used here. The sooner we leave it in our rearview mirror, the sooner the American economy can get back on track unaided by its government's "best minds."
We'll find out in the coming months just how discredited it is in the eyes of the American people. The best gauge you can watch is what happens in the mid-term elections on November 2nd. And, yes, I AM wishing time away until then. . .