Honey, They Shrunk the Private Sector
Chalk all of this up as yet another “accomplishment” of what I have identified and have been calling the POR (Pelosi-Obama-Reid) economy since (imagine that) mid-2008.
Others, including editorialists at the Wall Street Journal and Investor’s Business Daily, have more recently named what we are living through “the uncertainty economy.” But the key to understanding what has transpired is accepting the truth about when it really began. Its origins go back to June 2008, when Nancy Pelosi, Barack Obama, and Harry Reid injected enough of the aforementioned uncertainty to cause deep concerns about the future among the people who matter most when it comes to creating and sustaining economic growth: entrepreneurs, businesspeople, and investors.
June 2008 is when the terrible triumvirate went visibly wacko on energy. In the name of “protecting” humanity from the horrible consequences of supposedly settled assertions that have since been exposed as utterly without credible support -- namely that global warming is occurring and that human activity is causing it -- they promised to starve the nation of the conventional energy it needs to function, in the likely vain hope that acceptable, affordable alternatives will just, like, well, y’know … show up. The fact that they and their party intend to pursue their radical cap-and-tax plan in spite of the comprehensive scientific debunking that the colossal Climategate scandal represents merely proves that the business community’s fear-based mid-2008 reaction was more than justified. Their accurate advance perception was that the “climate change” discussion isn’t really about the environment; it’s about control.
At the same time, Pelosi, Obama, and Reid -- but especially Obama -- promised to punitively tax the five percent of the nation’s most productive so they could redistribute money to everyone else. These promises were routinely accompanied by heavy doses of business-bashing, pseudo-populist rhetoric. Again, those who saw big trouble on the horizon in mid-2008 from a potentially hostile government have been more than vindicated. Few of us ever thought that a president of the United States would be telling bankers who had money forced onto them at figurative gunpoint but who fully repaid their loans that he still “wants our money back” -- and that he would then mobilize/mob-ilize his minions in an attempt to create the pressure to make it happen.
In mid-2008, perceptive entrepreneurs, businesspeople, and investors reacted defensively -- as anyone who has decided that they are under attack would -- by abandoning expansion plans, trimming employment, and cutting their spending to the bone. Thus, the second-quarter-of-2008 recovery from the previous quarter’s difficulties abruptly ended. In the third quarter, the recession as normal people define it began.
Matters only worsened in ensuing months. The decades-in-the-making Fannie Mae- and Freddie Mac-driven housing and mortgage lending debacles, the “stimulus” that has only stimulated bogus claims of jobs “created and saved,” and the “Chicago way” conduct of the Chrysler and GM bankruptcies have only reinforced the business community’s justifiable siege mentality.
In this POR “rebound? what rebound?” economy, it should not surprise anyone that the government has become bigger, bolder, and more intrusive, while a worried private sector has contracted. Is there any good reason to believe that this has not been part of the plan all along?