American Elephants


A History Lesson for Obama. by The Elephant's Child

I didn’t expect to use the same image again so soon, but it fits this story even better.  Obama believes in government spending (Boy, do we have evidence of that!) so much so that he refers to it as “investment.” Last Thursday, here in Seattle, reported the Wall Street Journal, he once again displayed his unfamiliarity with history — at least the parts that he has not inserted himself into.

“When I hear people talk about the free enterprise system and entrepreneurship, I try to remind them, you know, all of us made that investment in Darpa [the Department of Defense Advanced Research Projects Agency] that helped to get the Internet started,” said Mr. Obama. “So there’s no Facebook, there’s no Microsoft, there’s no Google if we hadn’t made this common investment in our future.”

Microsoft—a product of the Internet? That may surprise Bill Gates and Paul Allen, who founded the software company in 1975. The company didn’t introduce its first Internet browser for another 20 years, and in the meantime it became the dominant computer software company long before the Internet became economically important. The irony of Mr. Obama’s error is that for much of Microsoft’s history the Internet was seen as a threat to its desktop dominance.

Darpa is engaged in funding research. This can be a proper role for government. But Darpa does not attempt to commercialize products. Facebook and Google, like Apple and Microsoft, were founded by private investors. In his State of the Union speech in January, Mr. Obama suggested that federal research spending “led to the computer chip.” Credit for the first integrated circuit has generally been awarded to Jack Kilby at a company called Texas Instruments back in 1958.  Other innovations came from Bell Labs, Fairchild Semiconductor and Intel.

Mr. Obama’s error in his assumption that all prosperity flows from government, demonstrates why he keeps trying to solve problems by throwing money at them. Notably, he is putting pressure on Congress to approve another economic stimulus plan. “Each of the ideas on this list will help create jobs and build a stronger economy right now,” Mr. Obama said.  Well, no they won’t.

He wants to give small businesses tax breaks for hiring more workers, but that’s not how it works. He wants to help homeowners to refinance their mortgages, he wants to help veterans find jobs. And he wants to spend up to $34.7 billion for those proposals — but that’s just a part of a more comprehensive $447 billion jobs program that Congress has mostly resisted, for good reason. And he really doesn’t want to cut spending at all— because he believes that spending is how you fix things. Calling spending “investment” leads you into strange pathways.

You would think that at this point one would learn from experience, but the One doesn’t. And that’s the real problem.




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