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Obama and Big Government

Should libertarians fear the Democratic nominee?

Steve Chapman
August 28, 2008

There are no disciples of small government in the Democratic Party, and Barack Obama fits right in. His economic program is based on the assumption that the economy is to the president what a marionette is to a puppeteer, requiring his direction and responding to his every wish.

Anyone partial to free markets, restrained government, fiscal discipline and light taxation approaches a Democratic nominee's economic platform with trepidation, expecting one fright after another. Obama does not disappoint.

He offers a long list of things the federal government should be doing to rearrange the nation's productive sector—paying U.S. automakers to build fuel-efficient vehicles, confiscating allegedly excessive oil profits, and spending hundreds of billions to create jobs in environmental and infrastructure industries. Democrats have not given up their basic faith that the market, while useful, is always in need of Washington's whip hand.

In his windfall profits tax plan, Obama puts aside the troublesome fact that the last time we tried it, at the behest of President Carter, the tax yielded far less revenue than projected while reducing domestic energy production. And if Detroit didn't bother to invest in fuel-efficient cars when Honda and Toyota did, why should it get a $4 billion reward for its failure?

But saying a Democrat believes in big government is like saying that Chicago winters are cold—true, but inadequate. Some winters are more bone-chilling than others, and some Democrats are worse than others. There are grounds for gloom with Obama, as there would be with anyone nominated by the party of FDR and LBJ. But there are some reasons to hope he will be less bad than most:

He's liberal, but not that liberal. Contrary to the famous National Journal ranking that put him most leftward in the entire Senate, another study found he is really the 11th-most liberal. In the primaries, when Democratic candidates are under the most pressure to veer left, he insisted on hewing closer to the economic center than Hillary Clinton or John Edwards—even when it exposed him to charges that he didn't support the holy grail of universal health care.

Obama did pander to the left's phobia about globalization by villainizing the North American Free Trade Agreement. But as soon as he had the nomination locked up, he confessed to Fortune magazine that his NAFTA rhetoric had been "overheated and amplified."

Organized labor howled about "corporate influence" when Obama hired Jason Furman as his chief economic adviser. Among Furman's sins is his longtime association with Clinton Treasury Secretary Robert Rubin, who pushed President Clinton to emphasize deficit reduction rather than big new spending programs.

He's open to evidence. The New York Times recently reported that Obama "likes experts, and his choice of advisers stems in part from his interest in empirical research." Nobel laureate economist James Heckman of the University of Chicago, who was asked for input on education policy by Obama's advisers, told the Times, "I've never worked with a campaign that was more interested in what the research shows."

That would be a change not only from more doctrinaire liberals but also from the Bush administration, which has never been exactly obsessed with real-world data. If Obama were a true believer, he wouldn't care so much about evidence.

Boston College political scientist Alan Wolfe says, "Ideologues don't need that information, or want it, because they know what they want to do." Ask yourself: Is there any conceivable evidence that would cause George W. Bush to question the wisdom of tax cuts?

He's not enchanted with the big-government model. On health care, Obama opposed Clinton's proposal to require every American to buy health insurance, preferring to offer subsidies and then let individuals decide. He balked when she said all adjustable mortgage rates should be frozen for five years—with Obama's campaign quoting an expert who said, accurately, that it would be "disastrous."

He's far less suspicious of the operations of markets than most people in his party. And when was the last time a Democratic nominee openly worried about corporate tax burdens? Furman has said that if some loopholes can be closed, Obama "would like to cut the corporate tax rate."

Those who favor a less expensive and less expansive federal government will find plenty to complain about should Obama become president. For consolation, they can try chanting this mantra: It could be worse.

COPYRIGHT 2008 CREATORS SYNDICATE, INC. This column previously appeared at Reason.com.



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