Reno Hayek Symposium

When during his campaign Obama was critical of the liberal Warren Court for not going far enough in “redistributing wealth,” you wondered how far he would have wanted the Court to go. Some may have thought it strange of him who had come so far in outdistancing his background that he would not have been more appreciative of the legal, economic and political system that provided the environment for his success. Others wondered how much “change” was in store for us.

He executed a masterful campaign mouthing some centrist themes and a few viewpoints that even conservatives found reassuring: no earmarks, balanced budgets, cross party lines and consensus governing, no more politics as usual. He was a brilliant communicator who overcame long odds in stopping the Clinton machine. The brilliance of that communication was its lofty generality. The press did not question the lack of specifics; he was their boy. Yes, he got us to believe in “hope.” A few, though, wondered, “hope” for what? And what “change” to expect?

It didn’t take long to find out. With an unstoppable majority in Congress there was little need of “advice and consent” and no need of debate. He rammed the $787 billion stimulus package through Congress and into law by February 17th. He submitted a $3.6 trillion 2010 budget to Congress on February 26, covering his health care, environmental, educational, and tax reduction goals and paid for with his cap and trade carbon tax and higher taxes on high bracket taxpayers making over $250,000 per year. He followed these feats with a $410 omnibus budget act including 8000 earmarks on March 11^th. While all this was going on his Treasury and his Fed were in the process of buying banks like Citi and BofA, insurance companies like AIG, and automobile companies like GM and Chrysler.

What do you call a government that taxes the earners to redistribute to the non-earners? What do you call a government that wants to eliminate union elections in favor of unregulated cards signed by individuals under unbeknownst pressure? What do you call a government that tells businesses what to invest in and when to lend? What do you call a government that limits incentives to private charity in favor of government-directed charity? What do you call a government that controls major implements of production of a nation?

Obama has promised not to increase taxes on those earning less than $250,000. But leaving aside the price-increase tax that the government will force industry to levy on consumers of anything requiring energy to produce, in other words, everything, Obama’s rate increases on that high-bracket segment will not generate enough taxes to cover the debt service on the massive debt generated by his programs. So where will the money to pay for his extravagance come from?

The simple answer is that the $250,000 limit will decrease in real increments until all taxpayers are paying for his programs. When the financial center of the world moves from New York and the technical center of the world moves from Silicon Valley, capital and profits will follow. Businesses that can will move to freer, less oppressive, and better-educated environments. Those high-bracket taxpayers remaining will legally lower their taxable income to whatever the latest magic number Obama spouts. In short, we will all be earning about the same. We will all be taxed about the same. There will be no incentives, only penalties for those greedy enough to want to strive for excellence.

Unions that have flourished only in the public sector, will now—since they don’t need to stand for election—flourish in what remains of the productive sector. All union workers will earn the same. This is the basis of unionism, equality. There will be no incentive to do more, to work harder, to get richer.

The logical end is the elimination of an environment in which people can excel. We will all be equal. We will be educated to the then current standards of the teachers unions. We will all pay the same tax. We will all be happy conformists with no discordant jealousy or vile greed.

Squealer, the pig in Orwell’s Animal Farm said it best, “No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?”
 Again later, the only commandment remaining on the wall, “ALL ANIMALS ARE EQUAL, BUT SOME ARE MORE EQUAL THAN OTHERS.”


Obama’s ilk is certainly in the “more equal” category. We are beginning to see how far candidate Obama thought the Warren Court had fallen short in failing to redistribute wealth. If we are not yet on Hayek’s road to serfdom, we surely seem to be on Obama’s path to socialism. 

Tom Motherway, tom@renohayek.com