A report put out by the IEA and endorsed by Nobel laureate James Buchanan says that President Barack Obama’s “depression era” mistakes will impede economic growth. Two men from the Institute of Economic Affairs say that Obama’ interventionist policies are akin to FDR’s mistaken policies in the 1930’s.

Is History Repeating Itself?

Franklin Delano Roosevelt is seen in the eyes of liberals as a great president; to some he is the greatest ever. That is until now, they have Obama. Time magazine likened Obama to Roosevelt when he was inaugurated. They made the comparison of the current financial “crisis” to the great depression, of course going on the assumption that Roosevelt made all of the right moves in getting America out of the depression.

Let’s compare Obama to Roosevelt in another way; Obama is making the same types of mistakes that FDR made during the depression that delayed recovery by a matter of years. Charles Rowley and Nathanial Smith argue that Obama’s policies will hamper America’s long term growth potential as well as delay recovery by a matter of years, same as Roosevelt. Rowley and Smith contend:

“FDR’s interventionist policies and draconian tax increases delayed full economic recovery by several years by exacerbating a climate of pessimistic expectations that drove down private capital formation and household consumption to unprecedented lows.”

While they do concede that the current economic recession is nowhere near depression proportions, they say that current Obama policies will crowd out investment and eventually lead to “much higher taxes and interest rates”. The IEA report goes on to say:

“Now is a particularly bad time to enact socialistic reforms to the market for healthcare, pursue wealth-destructive cap and trade environmental programs, or force additional federal tax dollars into state and local education markets. Such policies imply higher government spending and, eventually, either higher taxes or runaway inflation, thus depleting taxpayer and business confidence in the economy…”

Barack Obama is a bright guy, no doubt about it. But an economist he is not. Current Obama policies while being enacted for the “greater good”, will lead to a nightmarish recovery period. Most conservatives agree with Rowley and Smith that Obama’s depression era mistakes will slow our recovery by a number of years. The tough part is getting liberals to buy it.