Obama's hyperbole reveals antimarket intentions

Barack Obama, the would-be central planner, unwittingly signaled Thursday that he intends to impose government controls on the American economy totally foreign to the blueprint of the founders.

He is, of course, doing it for us. He wants to get rid of those troubling ups and downs that have, time and again, caused upheavals in households, businesses and government bodies.

It is through those hiccups that the economy works out imbalances that inevitably result from millions of decisions made by families and businesses, each in pursuit of its own objectives. People decide what to buy. Businesses take account of what's selling and produce more of some goods and less of others. Then tastes change, and businesses wind up with unsold products.

In the late 1990s, the huge promise of computer technology resulted in a red-hot market for computer-related stocks, which rocketed to levels that could not be sustained by the actual performance of technology businesses. The bubble burst, and many investors lost money.

It was nothing more than free markets adjusting expectations to reality. It was the small price we paid for a free consumer-driven economy.

To Obama, however, such hiccups are dire and must be overcome. On Thursday, addressing a gathering of chief executives, Obama bemoaned the "endless cycle of bubble and bust," and said he would attempt to build a new foundation for future growth.

Translation: the Obama administration intends to wrest control of the economy from the hands of individuals, families and businesses. The current recession, Obama said, can't serve "as an excuse to keep ignoring the long-term threats to our prosperity."

That prosperity, of course, was brought about by the energizing potential of an economy that allows people from the most humble beginnings to prosper. Obama apparently believes we'd be better off with a government-run economy along the lines of Cuba or Zimbabwe.

This would be startling even in the absence of the obvious fact that the most dangerous recent threats to American prosperity have come from government. It was Democrats, during the Carter administration, who embarked on a decades-long social engineering campaign to expand home ownership, resulting in an erosion of lending standards that previously had required borrowers to have a record of credit-worthiness to obtain a mortgage.

It was government-sponsored entities, Fannie Mae and Freddie Mac, that facilitated this erosion by camouflaging risk and and elevating home mortgages to the level of big-time investments that flourished in world financial markets. The result was a huge bubble in the U.S.housing market.

The Bush administration not only went along with the boom, but pumped it up. During the Bush years, use of the Carter-era Community Reinvestment Act actually increased. Meanwhile, the Federal Reserve system kept interest rates too low for too long, further inflating the housing market, while the Securities and Exchange Commission somehow failed to detect danger in the high-flying mortgage-based securities.

Alan Greenspan, who was chairman of the Federal Reserve at the time, recently admitted as much, saying he had over-estimated the ability of private corporations to look after their vital interests, including survival. He forgot to mention that elected officials and bureaucrats, along with pressure groups such as ACORN, had been pummeling the mortgage market for decades in service of their social engineering project.

We no longer had a free market in mortgages. We had a government-driven market through which Democrat politicians obtained favorable mortgages for themselves, and in some cases became millionaires.

Now we have a government-made recession, which Obama is falsely attributing to free market excesses and is using to justify new government intrusions in the economy. This is in keeping with his "stimulus" package, whose premise is that government, rather than rank and file taxpayers, will spend newfound money to the best effect.

Less than half of the stimulus is allocated to tax cuts, which leave spending decisiions in the hands of individuals and families. Most of the money will be spent by government. Will bridges to nowhere become a common feature of the American landscape? Will we have more Big Digs of the sort pioneered in Boston?

How long will it take for the American economy to rise to the inspiring level manifested by Cuba and Zimbabwe?