Fear Itself

When Franklin Roosevelt took office, his words “The only thing we have to fear is fear itself” had poignant meaning. Unemployment was at 25%, and the stock market was in the tank. The new president had his hands full when he stepped into the White House.

President Obama was sworn in with unemployment on the rise, the financial establishment in turmoil, a sick stock market, and a housing market implosion. There were plenty of things to fear at that moment, including world wide economic weakness. Obama faced similar if not as serious problems as did Roosevelt.

FDR fought the difficulties of his time with massive government programs and spending that had little positive result, but enormously expanded the national debt. The Great Depression slogged on with only minor relief until the outbreak of WW II ended it. President Obama is following the same path, fully expecting different results from repeating the same policies. In the process, he is only feeding the fear that is crippling what should be a strong resurgence.

The TARP bailout was not created to provide a piggybank for picking winners and losers in industry. It was put in place to prevent collapse of the large financial houses and banks that were teetering on catastrophe. Once in office, Obama dragooned TARP funds to bail out Chrysler and GM – acts that were never permitted in the original legislation. The banks are repaying the funds with interest, but the auto companies are not. A trip through bankruptcy court would have been the best cure, but that would have required the companies and the UAW to severely adjust their bankrupt practices. Obama cushioned his union backers at the expense of taxpayers. The Hugo Chavez act of basically nationalizing the car makers struck fear into large corporations and small firms since it begged the question of who might be next.

Next up was the so-called stimulus bill to the tune of about $800 Billion. Hysterically rammed into law in the first weeks of the new administration, it was a commitment to borrow money from abroad and blow it on pork and make-work projects. Obama promised that unemployment would not go above 8% if it passed. Now it has topped 10%. The only jobs the bill “saved” were those of federal, state, and municipal workers. In the meantime, evidence has surfaced that the bill’s extension of unemployment benefits has enabled folks to postpone actively seeking employment. The mere fact the results were the reverse of what was promised, after committing such a huge mountain of money creates more fear of government action.

President Obama declared that under his cap & trade legislation “electricity costs will necessarily skyrocket.” If this scheme becomes law, it will chase manufacturing jobs overseas and destroy the housing market. Since the bill has stalled in Congress, the EPA has stepped in. They seized the power to regulate carbon outputs by issuing an “endangerment finding” declaring CO2 a “harmful pollutant.” Every business person in the country knows what that will dramatically increase the cost of doing business, which will lead to higher prices and less demand for products. Less demand means less commerce and fewer jobs. They stand in fear of the fact that such rulemaking and regulation could well destroy their livelihoods.

Let us not forget the Damocles Sword of health care reform. It hangs over the heads of every firm and individual that currently has a health care plan. Will it pass? Will it fail? Will some middle ground be agreed upon? Until one of those questions is answered in a definite manner, the 85% of Americans who currently have health live in fear that the plan they have today may well be history soon. Who can make any rational decisions to grow a business, change jobs, or even plan for the future with such uncertainty?

How about the threats and near certainty of higher taxes to help pay for all this largesse, regulation, and additional entitlement spending? How could the rational man or woman be tempted to risk starting or investing in a business, or hiring more workers, knowing that even more of their hard-earned money will be taken from them at virtual gunpoint? Most businesses and individuals refuse to invest under such circumstances. Obama’s statement to Joe the Plumber that he wanted to “spread the wealth around” basically means that he intends to take from those who earn and give to those who don’t. Job creators are fearful, and many will keep their money in their mattresses.

The biggest and most frightening monster under the bed is national debt and the huge unfunded obligations of entitlement programs. These liabilities being transferred onto future generations add up to well over $100 Trillion and climbing. Americans are becoming acutely aware of this impending catastrophe and are very concerned that instead of doing anything about it, this administration is making the situation vastly worse. Millions are buying gold instead of products out of the fear of future inflation.

The shaky situation among some EU countries of course adds somewhat to the fear that most Americans feel at the present time, but it is nothing but a minor concern. The US economy has rebounded strongly from most past recessions and there is no reason it should not be doing so right now – except for the real fears outlined above – all products of this administration and its policies.

We Americans do not fear fear itself; we fear our futures are being squandered in front of our eyes by the misguided and damaging policies of this administration. We do fear risking our capital on promising, job generating opportunities and then seeing the overreaching laws destroy the business. We do fear working our selves to the bone and being taxed to the point we retain only chump change. We fear the spending, the debt, the regulation, and unprecedented government control of our lives and businesses.

Sending the President and Congress on a 3-year non working vacation would do more to bring this economy back than any and all of the destructive, loopy, expensive and foolish actions they are presently promoting. Being completely absorbed in their own self importance, they will ignore this suggestion, but the American people have the opportunity to broom scores of them from office this fall. Be sure to vote in November and then plug your ears. When the polls close, there will be power shift that may well reinvigorate the nation and its people.


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