Fantasies and Obamanomics

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This past summer has been a good one for Hollywood. Ticket sales surpassed last year’s May-August numbers by a healthy $100 million while Americans, as they did in the 1930’s to escape the harsh economic realities of the time, wandered into darkened theaters where, for a couple of hours, they could lose themselves in the Dream Factory’s ritzy, glitzy fantasies and jaw-dropping special effects-laden blockbusters.

But in a twist that is a metaphor for the “Summer of Recovery” that has been touted by President Obama, the number of actual movie goers fell by 2%. The gains at the box office occurred as a result of rising ticket prices and the explosion of 3-D pictures and Imax showings where moviegoers paid a premium to view the film. In fact, there were 11 million fewer tickets sold this year than in 2005.

If you think that sounds like Obamanomics, you win a cookie. The president barnstormed the country this summer touting rising jobs numbers despite the underlying weakness of the labor market that produced few private sector jobs, and employment numbers that included hundreds of thousands of temporary census workers. Unlike moviegoers, however, American workers are unable to lose their troubles in Obama’s fantasies about how much better things are getting.

In recent years, summer for Hollywood has also meant the regurgitation of hit movies from the past in the form of the sequel (many are sequels to sequels). And when you run out of sequels, you can always steal material from comic books or old TV shows. Hence, the biggest grossing movies this summer turned out to be the third incarnation of Toy Story, a sequel to a comic book knock off (Iron Man 2), the umpteenth Shrek sequel, and the third go-around for the teenage vampire love story The Twilight Saga: Eclipse.

Add the TV retread The A-Team, the updating of the Ralph Macchio franchise The Karate Kid, and the truly awful Sex in the City 2 and you begin to get the idea that there hasn’t been a lot of creativity in Hollywood since Howard Hughes found a way around the censors to show as much of Jane Russell in The Outlaw as could be squeezed out of her ill-fitting bodice.

Our president must be channeling his Hollywood friends because when it comes to originality and creativity in trying to get the economy moving again, Barack Obama has decided to produce a sequel to the gargantuan, $787 billion error he made in pushing through his pork-laden “stimulus” bill in February of 2009. His thinking is that if at first you don’t succeed, and you’ve run out of ideas anyway, simply repeat the mistake that made things catastrophically worse in the first place.

We’ve all heard the definition of a crazy man; someone who does the same thing over, and over expecting different results each time. Well, the president may not be certifiable, but one wonders what happened to that Ivy League brain of his when you hear that he is proposing tens of billions of dollars in additional “stimulus” to get the economy off the schneid. And as a kicker, Obama is going to offer a modest $100 billion in tax credits for business over the next decade by extending the expired research tax credit.

That latter idea is intriguing, but a $10 billion a year credit that will hardly affect the real engine of job growth — small businesses — seems a lot like using a garden hose on a three alarm fire. The research tax credit would, according to the Washington Post, “increase and permanently extend research and development tax credits for businesses, rewarding companies that develop new technologies domestically and preserve American jobs.” It’s not enough to make much of a difference to the 8 million Americans who are out of work, but at least it sounds as if the president is doing something.

No word on extending the Bush tax cuts for all despite economists from both sides telling us that raising taxes in 2011 would be suicidal. Also, not a peep on the idea of giving workers a payroll tax holiday which some Republicans have said might be a top priority next year if they take control of Congress.

The president swears that this new tax gambit will not add to the deficit because he is going to close other “loopholes” for business to pay for it. Not only will Congress have the final say on that idea, but do you trust Obama to know the difference between a “loophole” and something valuable? Considering that bunch of rabid Keynesians he has running around the White House with their hair on fire, we should doubt it. These folks view corporate profits as evil, and it shouldn’t surprise us if they take away legitimate deductions in order to pay for their “transformational” scheme.

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  • Chezwick_Mac

    Doesn't anyone in this Administration remember the example of Japan in the 90s?

    The Japanese consider the 90s to be the "lost decade" because while everyone else was riding high on the dot-com bubble, Japan was mired in a decade-long recession. In 1990, Japanese GDP had climbed to 60% of the USA's….by 2000, it had fallen back to close to 40%, so stark was the difference in growth for the two economies in the 90s.

    The Japanese tried stimulus package after stimulus package, most of it spending on infrastructure. Nothing worked because – like America today, the real problem was depressed real estate values and bad bank loans.

    The massive spending only succeeded in putting Japan in a league of its own vis-a-vis debt-to-GDP ratio. And now, Obama seems hell-bent on emulating the failed Japanese model.

    There's an old saying: "A wise man learns from the folly of others, but a fool will only learn from his own." Our President is given high marks by so many for his supposed intelligence. One wonders why?

    • Jim Johnson

      You got it right. Japan was good at selling cars. That brought them in a great deal of money. Japanese workers were paid ok. The problem was that the Japanese did not want other peoples non auto imports. Thus the worker paid a higher price than he should have for daily living. While the pay wasn't so bad it was thought that low pay would enable Japan to prevent lay offs in bad times. This worked in the 1990s as the unemployment rate in Japan was about 5%. However it slowed foreign business entry into Japan and slowed creation of Japanese business that could have made new markets created by the hypothetical higher paid worker. What was left was to invest in the US which scared Americans or Loan in Japan. The banks loaned for office buildings which would have no occupants eventually . The Bank repossessed but empty buildings yielded no in come. Pouring money into the banks wouldn't solve the problem as that was what caused the problem. Sharing the money with the worker and creating new markets might have worked. But the program of avoiding lay offs of workers was of some help as it provided liquidity for the lower and middle rung of
      society ;which kept the unemployment rate from rising as high as it would have in America. Of course we created a desperate bubble to save political face. The we created another bubble that hit the fan,

  • Barry Cooper

    The whole point of Keynesian economics is to eradicate private wealth–private capital–and to put everyone on the government payroll. They then own you.

    To the point on this particular iteration of the plan, it needs to be said that some $275 billion of the first Stimulus remains unspent. We are ALREADY going to spend far more than the $50 billion he is proposing, and that money is already allocated and fit into the budget.

    Our President is a liar, quite simply, for pretending he thinks this new "stimulus" is either necessary, or that it will create more than short term jobs.

    • MMcFM

      I think he keeps pumping money into areas where the only jobs funded by the stimulus money are union jobs. That is to force the work force into handing their livelihood over to union control. Eventually, if he does not get off the backs of American investment and entrepreneurship, he is hoping to change unemployed America's desperate need for a job into unionizing the nation. Unions exploit workers, skim their paychecks for personal gain and political favor, and treat them like their personal slaves. My experience in life: I detest unions.

  • Patrick Henry

    Keynesianism is the Progressives' (i.e., Fabian Socialist) preferred method of wealth redistribution. It doesn't work because its based on Marxist fallacies, specifically capitalism's alleged exploitation of labor, that public spending is more efficient than private investment, and that recessions are inherently bad (all of which have been debunked by von Mises. Keynes's key method of transforming the economy was counter-cyclical deficit spending to "prime the pump," whose effect was to displace private investment, inflate the currency and ultimately transfer wealth and power from the private sector to the public sector. Its Communism in slow motion, but it takes you to the same rat hole. Or as Hayek said: the road to serfdom.

  • QuantumSam

    Way to go bashing Hollywood creativity and then forgetting Avatar and Inception. Woo hoo! I love it when facts are omitted to make theories come true.

  • Marcus

    Avatar was a kids story marketed to adults, and while Inception was at least an original story, it is but one movie in a sea a sequels. The author's original point is still valid. Avatar and Inception hardly disproved the point.

  • bubba4

    You just show that it doesn't matter what Obama does….

    He's lowered taxes on almost all of you. He wants to make the middle class tax cuts permanent but not the ones for the rich. So all this tax scare stuff you just have to make up now…it's ridiculous.

    Who can trust FPM to write a real article?

  • Jim Johnson

    However the extent of unionization of employees goes it is a hollow victory when there are no people who have money to spend, Businesses are failing because there is no liquidity in the consumer level. Tax cuts ,depreciation schedules and other pro business benefits will have no effect until the customer shows up at the door.
    There is plenty of liquidity in company treasuries . But what are they do with it. No Matter what they do it can't bring customers to the door. The customer has no money, This is in fact a chronic situation that has existed for decades. The lack of customer buying power has been masked by ever easier access to credit. The customer was no richer than before but now he couldn't pay back the loans. To keep he facade of prosperity going loans were made to hopelessly unqualified applicants finally loans were made to the non existent. As no money came into the holders of the loan bonds the credit markets froze.
    The loan bonds were pushed on the the bigger fool. The there were no bigger fools and the greatest of all banks had to act as the biggest fool of all.
    Now the consumer has no money and no credit so the economy is frozen. All that is left is the bailed out ones is to play the market in a huge financial eddy that goes no where,

  • MARY