Miraculous March to the White House

By Steve Forbes November 10, 2008

Only the inauguration remains to formally complete Barack Obama's astonishing ascension to the U.S. presidency. Never before in modern American history has a man we really know so little about and whose political record provides few clues about how he might actually govern attained the highest office in the land. Neither the triumph of outsider Jimmy Carter in 1976 nor Harry Truman's stunning victory in 1948 matches what Obama has wrought. We all fervently hope this man will rapidly learn the job - assertions to the contrary, no one comes into the Oval Office ready on day one. Given the credit crisis and resultant recession, as well as the determination of Iran's terrorist-supporting mullahs to develop nuclear weapons, he must pursue prudent approaches that will foster a quick economic recovery and should be determinedly decisive with Iran instead of dithering, as this Administration has been.

One area in which the President-elect can do immediate, immeasurable good is to vigorously declare for a strong and stable dollar. The ricocheting greenback has been devastating, both in enabling the housing bubble to reach its obscene size and in inhibiting business investment. If, as expected, Obama convenes an economic summit of notables such as Paul Volcker and an array of business and labor leaders and academicians to discuss what should be done, he also could announce a few other things: that he will suspend mark-to-market rules, which have gratuitously and so severely damaged bank balance sheets; reinstate the uptick rule on short-selling; and consistently enforce the rule against naked short-selling. Taxes? Declare he will revisit that subject late in 2009, after the economy is growing again.

A number of entrepreneurs and business executives who supported the Illinois senator tried to reassure doubters not to pay too much heed to his redistribute-the-wealth rhetoric, that at heart Obama is a success-oriented centrist. One test of this to-be-hoped-for moderation will be his handling of the issue of solely using card check for union-organizing. This would do away with the secret ballot when workers are deciding if they want to be unionized. Workers would merely sign a card saying they are in favor of being unionized. This is an open invitation to intimidation and coercion from workplace and outside activists. People will often sign a pro-labor petition because they've been pressured to do so but will vote against the proposition in the subsequent secret ballot. Another part to this initiative is mandatory arbitration: If management does not agree to a labor contract with a newly unionized unit after 120 days, an outside arbitrator can dictate the terms of the contract. Naturally these arbitrators know on which side their bread is buttered - they won't get the job unless they've been approved by the unions.

All this would be disastrous, particularly for small and startup businesses.

Labor and Democratic Party leaders are salivating at the prospect of using card check to force the biggest expansion of unionized workers since the 1930s. They believe this would generate hundreds of millions of dollars in new dues that could be diverted for political agitation, thus making liberal Democrats - who are pro-labor - the majority party for the foreseeable future. While paying lip service to the idea, will President-elect Obama use his political skills to sidetrack or, more likely, water down this un-American proposal, made easier by Democrats not gaining a filibuster-proof Senate?

Health care is another worrisome area. During the campaign Senator Obama repeatedly spoke about the need for more government involvement. His idea of government-sponsored insurance policies for people not on Medicaid or Medicare and who can't afford private insurance would eventually drive the private sector out of health care because of the government-sponsored companies' low, subsidized rates.

Another nationalization subterfuge is the massively expanding State Children's Health Insurance Program (SCHIP). This program was originally designed by the Clintons in the 1990s to help make sure that children from low-income families had some health insurance. During this session of Congress, however, Democrats passed legislation exponentially widening the scope of SCHIP to include children and adults from some middle-income families. President Bush vetoed it. Democrats never hid their real agenda: utilizing SCHIP as a major stpe in having government take over the health care system.

Such slow-motion nationalization would eventually kill innovation in new medicines and procedures, just as it has done in Europe and elsewhere. It would also lead to long waiting lines for surgeries and to shortages in and rationing of treatment and equipment.

Some Surprises 

What will President-elect Obama do regarding energy? During the campaign he spoke of "investing" $150 billion of government money in alternative energy sources. But he was maddeningly vague as to what exactly he has in mind. At various times he spoke favorably about virtually every idea out there, including both bankrupting coal companies and encouraging technologies for "clean" coal.

Obama's big initiative will be some sort of cap-and-trade scheme for carbon dioxide emissions. The cost to companies for carbon permits wills make this thing one of the biggest tax-raising machines of modern times. One particular attraction is that businesses supposedly pay the money and thus will roll the costs into the prices they charge for their goods and services, a sort of energy version of the value-added tax. Since the rich can't possibly pay for all of President-elect Obama's promises, a carbon tax has the attraction of hitting everyone. It would be justified in the name of saving us environmentally.

One bane for those investing in alternative energy sources is that tax credits aren't set for long enough periods of time to make longterm planning possible. In this fall's bank bailout bill a provision was added to renew many of these tax credits for eight years - but tax credits for wind-produced energy were extended only through 2009. Why? Given T. Boone Pickens' national campaign to promote wind energy, this oversight will possibly be quickly corrected. (And given Pickens' credibility, you can also expect Obama to push the idea of using more and more natural gas for autos and trucks.)

Given all the problems Obama will be facing, don't expect him to do too much to cut back on the massive subsidies for corn-based ethanol. Even with the evidence against this fuel - its energy inefficiency and environmental harm - Obama probably won't feel he can stir up a political hornet's nest and cut back various ehtanol subsidies, particularly the 54-cent-per-gallon tariff on competing Brazilian-produced sugar-based ethanol.

Though and Obama Adminstration won't try to lift the ban on drilling for oil and gas in the Arctic National Wildlife Refuge, the next President will allow the removal of more and more barriers to offshore drilling. Even more amazing will be his support of new nuclear power plant constuction. Obama will let congressional Democrats and Republicans take the legistlative lead, but he will quietly make it clear that he'll sign virtually any pro-nuclear legislation they can pass - while publicly pretending to be mighty reluctant to do so.

Copyright 2008

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