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Is He Reagan? Or Is He Gorbachev?

Just like Gorbachev, Obama, equally obsessed with statist control of our lives, has thought of everything, except the one Big Thing: central planning does not work.

by
Benjamin Zycher

Bio

February 2, 2011 - 12:03 am

Time magazine informs us that Barack Obama is head over heels in love with Ronald Reagan. And it’s far more than mere love: “Obama ♥ Reagan.” And why not? Reagan, after all, supported all the things that Obama supports: reduced tax rates, reduced regulatory burdens, free trade, military modernization, disinflation, resource allocation by market competition, and limited government. In short: individual freedom and responsibility.

Oops. Mr. Obama in reality has a vision far loftier: He stands foursquare in favor of the things that any Beltway Nostradamus knows are the keys to continued American leadership: greater internet access, one million electric vehicles, wind and solar energy, and more information technology. And the crowning glory: high-speed rail.

And so notwithstanding Time’s silliness, the fundamental difference between Reagan and Obama is obvious: liberty and individual initiative versus top-down coercion. What also is clear is that for Obama, high-speed rail and other such nostrums represent far more than mere sops for the unions, bureaucrats, lawyers, corporate fat cats, and the other interests for whom happiness is a snout deeply embedded in the federal trough. Such central planning is the path toward faster economic and employment growth over the immediate term, and a stronger, more productive U.S. economy in the long run.

And so Obama is no Reagan. Obviously without realizing it, he is instead the American version of Mikhail Gorbachev instituting the Soviet 12th Five-Year Plan (1986-1990).

Let us take a stroll down memory lane. Having assumed the leadership of the Communist Party of the Soviet Union in 1985, Gorbachev understood clearly that the economy was poor in some respects and a shambles in most others. The basic problem simply couldn’t be the system itself; after all, the White House GosPlan (the Soviet central planning agency) was populated with the best and the brightest. And so perestroika was the new buzz word, and the key to long-term improvement in Soviet economic performance was … machine tools. Machine tools were the key to the future. That was obvious, anyone could see it: The strong world economies had invested vast sums in modern machine tools, and if only the Soviet Union did the same, its economy too would be world class. Presto! The system could be reinvigorated!

Obama, oops, Gorbachev was very clear: The key to long-term growth was the continuing introduction of increasingly fast high-speed rail productive machinery and equipment. Modernization, accordingly, depended heavily upon improved productivity in the machine building and metalworking sectors. For the 12th Five Year Plan, such output generally was to increase by precisely 43 percent. For numerically controlled machine tools: 125 percent. Robots: 225 percent. Processing centers: 330 percent.

And don’t think for a minute that this plan was poorly thought through. By 1990, 85-90 percent of this output was to be up to “world technical levels.” (The figure for 1986, supposedly, was about 15 percent.) And the new machine tools were to be twice as productive and reliable than earlier models, with 60 percent of the machine tools employed in the machine-tools sector itself to be less than five years old by 1990.

Can anyone be surprised that the Soviet system collapsed? Just like Obama, Gorbachev had thought of everything, with the crucial exception of electric cars, expensive energy, and high-speed rail. Or the one big simple reality that central planning does not work. Just like Gorbachev, Obama has thought of everything, except the one Big Thing: Central planning does not work.  Picking winners might be great for specific interest groups, but the trough noted above is one at which only white elephants will feed. Barack Obama — a creature of college campuses, left-wing fever swamps, and the politics of arrogance — is honest in his belief that central planning can yield greater wealth to be spread around. He is in for a rude awakening.

Benjamin Zycher is a senior fellow at the Pacific Research Institute.
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