Richard Ebeling on Obama's Economic Team

Obama Team Not "Free Market"

In spite of the impression in the media, that President-Elect Obama’s economic team reflects an underlying “pro-market” orientation, they in fact are advocates of manipulating markets to generate outcomes more to their interventionist and welfare redistributive liking. The French have long called this “indicative planning”: use the tax system and the regulatory mechanism to induce the private sector to do what politicians and ideological special interests want. That is not the free market. They will manipulate the markets to bring about the “green” and pro-labor union outcomes that will have nothing to do withthe outcomes we as consumers would have desired in a more competitive environment.

In addition, they are all on board to design and implement a vast deficit spending package that will end up doing far more harm than anygood, by creating politically influenced public works jobs that will only last for as long as the government keeps spending money in particular ways. Also, they seem to be completely oblivious to the simple but vital question: where is the money coming from to fund what will end up being a total $1.5 trillion bailout and stimulus budget buster? An answer would be nice.

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Obama's Economic Team: More of the Wrong People

President-elect Obama has announced that Paul Volker will head a new Economic Recovery Advisory Board that will propose interventionist policies to bring about economic recovery from the recession.

At the same time, Obama announced that University of Chicago economist, Austan Goolsbee, wil head the staff of this new advisory board.

Goolsbee believes that incentives matter, and because of this he believes that goverment can, therefore, manipulate tax rates and market prices (through various fiscal and regulatory tools) to get people to act more along the lines the policy-makers would like...

Well, we have now seen the future that Goolsbee was counting on, and it has turned out to be a disaster. Cheap, easy money policies supplied the Fed- created credit to feed the housing frenzy so many of those who Goolsbee want to get a house were able to become "home owners."So here we are. One of the economic "experts" who praised the misguided policies that generated the housing bubble now is to be a leading "player" is supposedly getting us out of the current economic crisis.

This another "footprint" telling us where Obama's "journey of discovery" is likely to be taking us.

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