Acton Institute Powerblog

Samuel Gregg: Obama’s Speech Misses It

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Over at National Review Online, a panel of experts reacts to last night’s jobs speech by President Obama. Acton’s director of research, Samuel Gregg, was not encouraged by what he heard: a jumble of disproven Keynesian theories and strong-man rhetoric. Gregg’s commentary in full:

Tonight’s speech was more of the same. President Obama’s hectoring lecture reflected the usual fare of Keynesianism mixed with mild nods to the private sector that we’re come to expect. It also embodied an abiding faith in government that would be touching if it weren’t so detached from economic reality. Granted, Paul Krugman will surely bewail that the president didn’t go far enough with this third stimulus plan. But that’s what it is.

There was much talk about fixing infrastructure. Public works is something even Adam Smith thought the state should do. But haven’t we been here before? Didn’t we hear something about “shovel-ready” jobs a while ago? Why should this time be different?

Likewise, on the president’s reference to mortgage relief: When will he understand that policies that slow down the market-clearing process merely prolong the pain?

Naturally, there was the now-monotonous call to increase taxes on those who, well, already pay most of the taxes. These are the same individuals and businesses whose capital fuels the creation of jobs—not the personifications ofAmerica’s economic problems who were sitting with the first lady: GE’s Jeff Immelt, the face of American corporate welfare, and the AFL-CIO’s Richard Trumka, the symbol of union obstructionism.

Over and over again, the president insisted: “You should pass this jobs plan—right away.” I thought the legislature’s job was to carefully assess legislation, not just roll over because the boss wants something. Such rhetoric—and the speech’s substance—suggests the president has never really left the mental horizons of Chicago politics. America is the poorer for it.

Kenneth Spence


  • Ouch!

  • td39

    Where are the measurables!? You talk of the high income earners as job creaters, but instead, they are money hoarders, demanding more from the employees they already have. Theory or reality.

    • Roger McKinney

      I assume you understand that hoarding money requires one to put the cash under a mattress or buy gold and let it set in a warehouse or safe deposit box. No wealthy person does that. Almost all of their wealth is tied up in job-sustaining businesses. Think of the wealthy as hoarders medieval economics.

      • td39

        That’s nice, but you are still not getting my point. Where are the measurables? For every dollar preserved for the wealthy, how many translate to new jobs? What is our return on investment, so to speak?

        • Roger McKinney

          That’s a good question and I don’t know the answer. But
          economics knows of one way and only one way to create sustainable jobs for the
          long run and that is through private investment in new and expanding
          businesses. My guess is that it takes around $200,000 in investment to create a
          single new job.

           Logically, you have to ask who has the money to invest?
          Corporations invest out of their profits and the wealthy invest their savings.
          The middle class and poor invest almost nothing because they save very little. Therefore,
          if you take the profits of corporations and the savings of the wealthy away
          from them, investment will fall by an equal amount.

          • td39

            So to follow your argument to its conclusion, the reason so many people are out of work is that the wealthy aren’t wealthy enough.

          • Roger McKinney

            Yes, you could say that. In the unsustainable boom that the
            government created, wealthy investors lost a lost of wealth in housing and car
            manufacturing. When the wealthy lose money, they have less to invest by simple

            At the same time, the wealth that the wealthy lost was tied
            up in capital goods, such as plants and equipment to build cars and supply the
            materials to build and furnish houses. When capital goods are lost, the jobs
            that depended upon those capital goods are lost as well.

            Take a silly example: suppose a company dug ditches with
            just shovels. It has 10 shovels, one for each of ten workers. A dump truck runs
            over and destroys 5 shovels. The five workers who depended on those shovels for
            a job will lose their jobs until the company can save enough to purchase 5 more
            shovels, or until a wealthy investor comes along and buys into the company.
            Of course, those of us raised on Marxist class warfare will find the interdependence of rich and poor a hard thing to grasp.

          • td39

            All those capital goods… Funny, though, U.S. based businesses are sitting on 2.8 trillion cash right now, some of which is bailout money, I might add. The tension between the haves and have-nots will always be there and has nothing to do with Karl Marx.

          • Roger McKinney

            What’s your point about the cash? And the bailout money went to banks, not everyone.
            There doesn’t have to be tension between the haves and have-nots. Envy causes that tension. Since the natural man is very envious of others and covets their goods, you’re right that envy will always be there. Socialism elevates envy to a virtue.
            Christianity has always considered envy and covetousness to be major sins.