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WOLF: Obamanomics is shovel-ready

The failure of Keynesian economics is no laughing matter, Mr. President

- - Tuesday, June 28, 2011

In 1932, President Hoover received a letter from a man in Illinois that read simply, "Vote for Roosevelt and make it unanimous." Based on its recent floundering, it seems even the White House recognizes that Obamanomics has been a disaster. It's nearly unanimous now.

When President Reagan entered office, America faced a deep recession with double-digit unemployment and inflation, plus dishearteningly long gas lines. Rather than wasting time blaming his predecessor, the Gipper went right to work unveiling Reaganomics - an embrace of the free market - which included four simple principles: (1) lower tax burden, (2) lower government spending, (3) lower regulatory burden, and (4) a strong dollar monetary policy.

The top income tax rate was reduced from a stifling 70 percent to a low of 28 percent. Total federal spending was reduced from 23.5 percent of gross domestic product to 21.2 percent. Deregulation ended disastrous price controls and curtailed the government's micromanaging of private businesses. Disciplined money supply strengthened the dollar.

As Peter Ferrara, policy adviser to Reagan, has described, the results were beyond spectacular. Reaganomics unleashed an explosive growth of wealth and prosperity, the largest in the history of humankind. Some 20 million jobs were created. Unemployment dropped to 5.3 percent. The gross domestic product growth rate hit a high of 6.8 percent, and the total economy grew by nearly a third. Inflation dropped to 3.2 percent. Even the oil shortage was solved almost overnight.

Barack Obama is no Ronald Reagan.

President Obama entered office peddling the false hope that government can "spread the wealth." This is as foolish as bucketing water from one end of a swimming pool to the other. At best you achieve nothing; in reality, the spilled water along the way leaves everybody worse off.

Obamanomics favors top-down compulsory cooperation over voluntary. It is the anti-Reaganomics. Mr. Obama has done the following: (1) raised taxes, (2) unleashed a wild orgy of spending, including his disastrous so-called "stimulus," (3) dramatically increased regulations and even nationalized industries and businesses, and (4) printed money out of "quantitative easing" thin air.

The results were predictable. Since the Obama stimulus - a collection of "shovel-ready" projects promised to save the economy - was signed into law, America has lost 1.9 million jobs and unemployment has surpassed 9 percent. GDP growth remains anemic. Consumer confidence has tumbled. Gas prices were at $1.81 per gallon before Mr. Obama put his "boot on the neck" of suppliers, and now it's more than doubled, to $3.81. We burn our food supply in our gas tanks, and grocery prices have skyrocketed - some staples by as much as 40 percent. Since the president signed his mortgage rescue plan, Americans have seen 3.82 million foreclosures. Most disturbingly, the majority of Americans are receiving some type of welfare.

Want to better understand Obamanomics? Look no further than "cash for clunkers," Mr. Obama's laughably misguided idea to use American's wealth to, quite literally, destroy American's wealth, to use taxpayers' money to destroy taxpayers' working automobiles. Despite the propaganda, these weren't "clunkers" at all. I continue proudly to drive one myself. Edmonds.com estimated the cost per new car sold at $24,000. Some estimates are much higher. A year later, auto sales were at their worst in 27 years and Americans - low-income Americans in particular - are suffering a government-created shortage of low-priced cars. Still the Democrats claim that the clunkers program "has been successful beyond our wildest dreams." The truth is, it was motivated by environmentalism, not economics. It reflects Mr. Obama's arrogant belief that he knows better than you what type of car you should drive. Controlling your behavior is one wild dream, indeed.

Mr. Obama, abandoning any pretense of economic literacy, has placed the blame for unemployment squarely on America's archenemy: the ATM. The jobless rate remains high, according to the president, because - it's hard to make this stuff up - "when you go to a bank you use the ATM, you don't go to a bank teller." Other Democrats share his ignorance. Recently, Rep. Jesse Jackson Jr. claimed that Apple's iPad was "probably responsible for eliminating thousands of American jobs." Mr. Jackson, an iPad owner himself, adds hypoc-risy to ignorance.

Mr. Obama, meet Ned Ludd. In the early 1800s, the Luddites - named for Ned Ludd, an alias used to conceal their leaders' true identities - sabotaged factories for fear of new technology. Their mistake was a belief that jobs themselves are prosperity when, in fact, it's the products and services of those jobs that create prosperity. The government could hire people to dig holes and other people to fill them back in, but America would be poorer for the wasted effort. In reality, new technologies, from the advent of the wheel to today's nanotechnology - including the ATM and the iPad - increase efficiency, which frees people for more important endeavors. This is the precise mechanism that improves mankind's standard of living.

And now, as Obamanomics continues to crumble, the president has made a stunning admission: " 'Shovel-ready' was not as shovel-ready as we expected." The line drew laughter from his friendly audience. This is not the first time his own supporters have been caught laughing at Obamanomics. Last week - before the Democratic National Committee, no less - the president made this wild claim: "Over the last 15 months, we've created over 2.1 million private-sector jobs." That despite the record showing America has 1.9 million fewer jobs today than before his "stimulus." According to the White House's own transcript, what followed next was "laughter" (until later, that is, when Orwellian Ministry of Truth officials in the administration scrubbed the record and changed the transcript to read "applause").

Americans are suffering, Mr. President, and it's no laughing matter. It's time to put Obamanomics where it belongs: on the trash heap of history. Got a shovel?

Dr. Milton R. Wolf, a Washington Times columnist, is a board-certified diagnostic radiologist and President Obama's cousin.