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Thursday, February 28, 2013

 

Obama's Alternative Universe



Daniel Henninger thinks that Washington may finally be coming  to grips with he fact that Obama really does live in an alternative universe, where everything revolves around the government.

The sense is growing around Washington, and this increasingly includes Democrats, of living in an alternative universe. Barack Obama gives his State of the Union speech, the sequester looms, and the president flies around the country giving speeches. He's had virtually no contact on the sequester with the legislative branch. Now he's going to meet with them after the sequester happens. This is unusual. We need to look outside normal politics for explanations.

Mr. Obama likes to convey the impression that he doesn't think or do business like other presidents. It's time to take him at his word. If Washington is starting to look like an alternative universe, that's because the president is creating an alternative universe, the Obamaian Universe. ...

The Obama administration is trying to pull us back into what astronomers would call the pre-Copernican world. Copernicus' heliocentric system overthrew what was known as geocentrism—the belief that everything in the universe revolved around the earth. Beautiful maps exist depicting geocentrism.

Economic thinkers since at least the time of, well Copernicus, have understood that national well-being derived from private individuals going out into the private world to produce goods and trade goods, an activity that for centuries has created wealth for many nations. No longer. Mr. Obama and his circle divide the economy into separate parts. In the Obamaian universe, the units of the private economy—companies large or small—are satellites orbiting the great fixed planet of public spending. All material and economic life in the Obamaian model radiates outward from a central source of public spending. This is why spending in the Obama presidency abruptly jumped as high as 25% of GDP from a 40-year average of 20% of GDP.

Of course if you gather enough crony capitalists, you can get these satellites to revolve around you. Examples abound like Jeff Immelt at GE and uber-rich billionaires like Warren Buffett who profits handsomely from the Federal Reserve's zero interest rate policy. The big banks and Wall Street get rich while retirees on fixed income and savers get shafted. Keeping people poor makes them easier to control.

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