CONSERVATIVES MADE THE SAME MISTAKE WITH BILL CLINTON...:

An Overleveraged Presidency: Barack Obama's risky initiatives. (Fred Barnes, 06/01/2009, Weekly Standard)

The difficulty is that some of his policies are likely to hinder others. Tax hikes, increased energy costs, and new regulations work against the economic recovery that soaring spending and peacetime deficits at historic highs are supposed (by Obama at least) to spur. A more likely result: stagflation, a simultaneous surge in inflation and interest rates.

Obama is now trying to deleverage. The purpose of his speech last week was to take the risk--or at least the appearance of risk--out of his policy on Guantánamo and terrorists. He insisted the safety of Americans would never be put in jeopardy by the release of prisoners from Guantánamo or their transfer to prisons in this country.

In his appearance with Israeli prime minister Benjamin Netanyahu, Obama toughened his policy toward Iran. His position, a risky one, had been that friendly diplomacy is the best policy for persuading the Iranians to abandon their effort to build nuclear weapons. But Obama indicated he'd turn to stronger measures if the Iranians haven't responded favorably by the end of 2009.

Obama has set "energy independence" as a goal. But his policies make that goal harder to achieve. His administration has refused to open new areas in the United States and offshore for oil exploration and production. It favors lavish subsidies for renewable energy (wind, solar) that will do little in the foreseeble future to make up for the shortfall in domestic production of gasoline. As the demand for gasoline increases, as it almost certainly will, there will be only one place to turn: foreign oil.

His takeover of the Big 2 in Detroit, General Motors and Chrysler, poses another risk: downright failure. The auto companies are a money pit, requiring tens of billions in federal subsidies just to stay alive. The public opposes the continued bailout of the auto companies, but Obama is stuck with it. And the chance that either company will soon return to profitability is slim.

Taken together, Obama's policies on energy, health care, and financial institutions are risky for still another reason. They require more government control of the economy, which leads inevitably to a less dynamic and innovative economy and to less growth.

...failing to recognize that what seems radical to them is actually too minimal to have much effect on a pent up economy just waiting to grow again, especially with a peace dividend in the pipeline.

Posted by Orrin Judd at May 29, 2009 6:02 AM