Why I have never been in love with President Obama

It is easy to be attracted to Mr. Obama. He is knowledgeable, thoughtful, articulate and stoic. That is a welcome change from his predecessor’s ignorance, tribalism, gut-emotion and linguistic incoherence. His sensitivity and diplomacy in foreign affairs are also refreshing after eight years of Bush obtuseness and gung-ho unilateralism.

But Mr. Obama’s debits far outweigh his credits. At home he has governed from the Left, far away from the centre President Clinton occupied and with which the majority of Americans feel comfortable. Building on the reckless fiscal policies of the Bush administration, and taking advantage of the global economic crisis, he has vastly expanded federal-government intervention. He has outsourced policy-making to the most egregious left-liberal warhorses in the Congress – Democrats addicted to Big Government and with a visceral hostility to free markets. Public-sector trades unions – the most Neanderthalic constituency in American politics – hold sway over chunks of public policy. On the international stage, Mr. Obama has allowed US trade policy to drift in a protectionist direction; and on national-security policy, he gives the impression of US weakness in his zeal to “engage” with enemies.

These were all potentialities from what we knew of Mr. Obama’s pre-presidential political outlook and his campaign positions, though clouded in a feel-good, thought-suspending rhetorical fog of “Hope’n-Change’n-Yes-We-Can”.

These features have been on unseemly display in the substance of policy over the past year. It started with the USD 787 billion fiscal-stimulus package, which the Congress stuffed with goodies for politically well-connected lobbies. This is a monumental waste of taxpayers’ money and does little to stimulate overall economic recovery. Then there were bailouts for the Big Three Detroit carmakers. And “Work Choices” legislation, a gift to the unions to boost membership and official recognition without secret ballots. On financial regulation, Mr. Obama first treated Wall Street with kid gloves and then, after Massachusetts, took the gloves off. But his common thread for regulatory reform is massive discretion for the Federal Reserve and the Treasury Department to micro-manage financial markets.

The President and his environmental-policy team also believe in radical solutions to combat global warming. They gave the green light to terrible Congressional cap-and-trade legislation, especially the Waxman-Markey bill in the House of Representatives. This is full of arbitrary targets and exemptions – i.e. subsidies – to politically influential energy lobbies. Possibly worse, the Environmental Protection Agency will have wide discretion to micro-regulate carbon emissions – as flagrant a case of on-the-hoof, behind-closed-doors policy-making by an unelected regulatory agency as one can imagine.

Finally, there is healthcare reform, the centrepiece of Mr. Obama’s agenda. His concern to make coverage universal is laudable; but, again, he has given Congress a free pass to write incredibly complicated legislation that will introduce all sorts of market distortions and raise costs for taxpayers and consumers.

Overall, Americans will pay the price for Mr. Obama’s leftist folly in two ways. First, the fiscal-stimulus package and other cost-raising measures are ruining public finances, which were bad enough under President Bush. Trillion-dollar deficits and escalating public debt stretch out as far as the eye can see. A significant increase in taxes on the middle classes will be one of the consequences. And second, mind-bogglingly complex legislation will require more public bureaucracy and increase arbitrary transfers to special interests. These distortions will make the American economy more sclerotic. Combined, these measures threaten to undo the Reagan revolution of the 1980s – supply-side reforms that made America more competitive and productive – and Clintonite fiscal prudence in the 1990s.

Now turn to international affairs. US trade policy has deteriorated. It has not returned to 1930s-style protectionism, but it has crept in the wrong direction. The Administration has not launched open-market initiatives in the WTO or other forums, which is an abrogation of the US’s traditional leadership role in international trade. Domestically, Mr. Obama has allowed the unions and protectionist business lobbies to make the running. The result is more trade conflict, especially in relations with China.

On national-security policy, Mr. Obama is fast creating the impression of American naivety and weakness. This is reminiscent of the supine Carter presidency. The Administration has a rosy-eyed view of a dysfunctional United Nations; it has neglected its allies, notably in eastern Europe; it has gone out of its way to appease a belligerent Kremlin; and, initially, it mollycoddled an atrocious Iranian regime. Such policies have been coated in sweet-sounding multilateralist rhetoric, so far with no results except a Norwegian Peace Prize. It is mere soft-serve ice-cream multilateralism.

Barack Obama is a social engineer by instinct. His White House is full of social engineers, mostly fellow lawyers, including fellow Harvard Law School graduates. They believe that superior technocratic minds can solve complex social and economic problems with targeted interventions. That, according to David Brooks, my favourite New York Times columnist, is the world-view of Jeremy Bentham. It is not that of David Hume, who believed that governments cannot possibly have enough knowledge to “fine-tune” outcomes with detailed, prescriptive regulations; that they “fail” through human fallibility, political pressure and corruption; and, consequently, that regulation should err on the side of caution to allow markets to operate effectively. Mr. Bentham is much more popular than Mr. Hume in the Obama White House; and that is why I have never been in love with Mr. Obama.