Understanding Obamanomics
If you have read or watched any news in the past week or so you have not only heard a ridiculous amount of information regarding AIG, but you have probably also heard a little bit about Obama’s new budget. Funny that our attention is on AIG while the president is putting together perhaps one of our nations most critical budgets – ever.
I was searching to find an article that would give some basics on what his motives are in the budget and how it will help us get out of the bottomless pit we seem to be free-falling in. I found this WSJ opinion article from Robert Reich.
Mr. Reich does an excellent job of describing the key elements of Obama’s budget as well as directly comparing this with Reagan’s budget which helped us come out from underneath a huge financial crisis in the early 80′s. Here are a few of the highlights from the article:
“The real distinction between Obamanomics and Reaganomics involves government’s role in achieving growth and broad-based prosperity. The animating idea of Reaganomics was that the economy grows best from the top down. Lower taxes on the wealthy prompts them to work harder and invest more.” (Robert Reich, WSJ)“Obamanomics, by contrast, holds that an economy grows best from the bottom up. The president proposes to increase taxes on the highest 2% of income earners starting in 2011. Those tax increases will fund more Pell grants allowing lower-income children to attend college, better pay for teachers that show they’re worth it, broader access to health care, improved infrastructure, and more basic research.” (Robert Reich, WSJ)
“The key is public investment. Reaganomics did not view any public spending as an investment in the future except when it came to spending on the military. Hence, since 1980, federal spending on education, job training, infrastructure and basic research and development (apart from defense-related R&D) have all shrunk as a proportion of GDP.” (Robert Reich, WSJ)
“Under Reaganomics, government was the problem. It can still be a problem. But a central tenet of Obamanomics is that there are even bigger problems out there which cannot be solved without government. By building the economy from the bottom up, enhancing public investment, and instituting reasonable regulation, Obamanomics marks a reversal of the economic philosophy that has dominated America since 1981.” (Robert Reich, WSJ)
I’m not going to try and say if I think this is the right way to approach our current situation or not because flat out, I don’t know and if I did, I wouldn’t be writing this blog 
The point here is that we’re going into a new era of government spending, a trickle-up approach and what I would call a return to big government. Will it work? I don’t know, but I sure hope so.
In case you did not read the entire article, Robert Reich is a professor of public policy at the University of California at Berkeley and a former U.S. Secretary of Labor under President Bill Clinton.
What do you think? Is this what you want your money going towards?
I’m totally comfortable with a percentage of my money funding a government that secures a basic level of well-being for all its citizens while laying the foundations for opportunities for increased prosperity. I think there are though still competing philosophies in Washington about what aspects are included in the basic level of well-being (to which all citizens are entitled – and I don’t use that word lightly), and what aspects are the responsibilities of citizens to strive to achieve.
I think you would find it hard to argue that your taxes shouldn’t fund the military that protects your country, but somehow there are policy makers who believe that the it’s not the governments place to guarantee access to a health care system that safeguards the very lives of its citizens.
Also, in my opinion there is something fundamentally wrong with candidates for positions in government holding the view that “government is the problem”. It’s very easy for those candidates, when in positions of leadership, to ignore and under-fund select agencies making it easier for them to make there case about an ineffective government
This is where I want OUR money spent. I think there has been such a disparity between classes in America, one that capitalism only reinforces, that larger public investment, involvement, and interest has to equalize the playing field. These juggernaut economies were created, it seems, for a few to exploit the rules and become exorbitantly wealthy. Economic growth is not sustainable under Reganomics, neither is believing that more production will equal more wealth. My recommendations if this were a book club: 1. Ishmael by Daniel Quinn, and 2. Cradle to Cradle by McDonough and Braungart. These books, one fiction the other non-fiction have great lessons for how our economies should look and they only way they will survive.