Barack's failed policies of the past

Change that means more of the same

The centerpiece of Barack Obama’s presidential campaign is “change.” The motto of his campaign is “Change You Can Believe In.” Does it really make sense, however, for a believer in more government spending and new government programs also to be a proponent for change?

Although Sen. Obama hasn’t described himself as a liberal, he has the most liberal voting record in the U.S. Senate (according to the non-partisan National Journal). Perhaps the most basic philosophical difference between liberals and conservatives is in terms of the effectiveness of government in achieving our economic and societal objectives. There seems to be no clear, agreed-upon definition of liberalism, but confidence in government solutions would seem to be one of its primary tenets.

It’s unlikely, for example, that Obama would subscribe to President Reagan’s famous statement, “Government is not the solution, it is the problem.” In fact, he would probably not even agree with what Bill Clinton said in one of his State of the Union addresses, “The era of big government is over.”

Basically, we have two broad routes for achieving our economic and societal objectives — the private sector and the public sector. When the government sector grows, the private sector shrinks. Sen. Obama advocates several variations of higher taxes. Higher taxes leave fewer resources in private hands.

Which would you judge to be more conducive to change, the private sector or the public sector? There is a never-ending survival-of-the-fittest in a competitive environment, and no company is guaranteed survival or certain size. Two of today’s largest companies, Google and Yahoo!, for example, are in industries that didn’t even exist only 20 years ago. In the private sector, no company is guaranteed survival or a niche. Automobile companies and airlines that once had seemingly secure positions in the economy are now struggling to stay afloat. Private companies either adapt to changing conditions, or they perish. They must be responsive to evolving technology and consumer preferences or suffer the consequences.

Compare those realities to the typical course of events in the government sector. For example, Congress recently passed overwhelmingly an extension of a farm bill with massive price-support subsidies to grain, dairy products, sugar, and peanut farmers. The price tag for the new farm bill is $307 billion.

Federal agricultural policies were born in the midst of the Great Depression, an era profoundly different from today. The first farm bill in 1933 was meant to address a precipitous decline in commodity prices in the early years of the Depression. At that time, about 20 percent of the population lived on farms and most farms were family-owned. Now only two percent of our population lives on farms.

Although economists often disagree about many issues, you would be hard-pressed to find one who thinks our governmental agricultural policies make any economic sense, especially when commodity prices are at record levels. Market conditions today are almost exactly opposite to what motivated the first federal farm legislation.

Nevertheless, these policies have been in effect for over 75 years in basically their original form. They are a perfect case study of the virtual impossibility of governmental change once a policy is enacted and vested interests establish a beachhead. Once a government program is in place, it essentially has life everlasting.

If change is a good thing now, it should be a good thing in the future. For change to be a future possibility there needs to be flexibility. Flexibility, however, is not characteristic of government activity. Once a policy is passed into law it essentially gets set in concrete.

Government policies are implemented and enforced by bureaucracies. Most of us have experienced dealing with bureaucracies. Would you say that flexibility was an aspect of the experience you had?

If Sen. Obama becomes president he may well make changes in the form of new and additional government programs; however, once those new programs are in place, we can expect very little change after that.

We’re still having to cope with the innovations FDR blessed us with 75 years ago. Do we actually believe we know what policies our great-grandchildren will need and want?

- Ron Ross, Ph.D. is an investment advisor at Premier Financial Group in Eureka and former professor of economics at Humboldt State University. He lives in Arcata.

(eurekareporter.com)