Why 'socialist' Obama is more of a free marketeer than Trump
A clear-eyed view of Obama shows not some power-mad redistributionist, but a leader who's pushing the sort of pro-market economic reforms that the GOP's own presumptive presidential nominee should be suggesting
Barack Obama's presidency had an action-packed beginning. Stimulus plans! Bailouts! ObamaCare! Wall Street reform!
All of that — well more than $1 trillion of government spending and a sprawling thicket of new regulations — was enacted within Obama's first year and a half. Republicans skewered this agenda as "big government." Plenty of them branded it "socialist."
But in this, the final year of Obama's presidency, and a year in which a self-declared "democratic socialist" came surprisingly close to winning the Democratic presidential nomination, the "Obama is a socialist" chatter is a lot quieter. And rightly so. Because a clear-eyed view of Obama shows not some power-mad redistributionist, but a leader pushing the sort of pro-market economic reforms that the GOP's own presumptive presidential nominee should be suggesting.
Now, to be clear, Obama is not a libertarian or conservative. But he and his economic policy team seem to have a better grasp of market economics than billionaire (maybe) businessman Donald Trump.
The Republican Party calls itself "the party of maximum economic freedom." Or at least it did in its 2012 party platform. But the GOP's presumptive presidential nominee this time around doesn't talk much about economic freedom or free markets or entrepreneurial capitalism. Instead, according to Trump, the key to raising living standards and shared prosperity is having tough leaders with good brains who cut smart trade deals and ban offshoring. Oh, and mandating American steel be used to build "skyscrapers soaring into the sky." That — along with a single sentence on his fanciful $10 trillion tax cut plan — was more or less the gist of Trump's recent jobs speech near Pittsburgh.
Free marketeers everywhere, I implore you: Compare that populist policy agenda to what's been coming from the left-wing, pro-trade Obama White House in recent months.
First, Obama is calling on states to pass reforms that would reduce unnecessary and overly broad occupational licensing. Nearly one-quarter of all U.S. workers need a government license to do their jobs, up from fewer than five percent in the 1950s. These costly rules reduce job opportunity, wages, and geographic mobility. For instance, according to the Institute for Justice, the average cosmetologist spends 372 days in training vs. 33 for the average EMT.
Second, the Obama administration is developing a set of "best practices" that will help state legislatures address the misuse of non-compete agreements. Nearly a fifth of American workers have contracts barring them from working at a competing employer within a certain period of time after leaving their current job. Research suggests noncompetes reduce worker bargaining power and stifle innovation. The success of Silicon Valley may be due in part to California not enforcing such contracts, making it easier for techies to start businesses and spread their know-how to existing firms.
Third, Team Obama continues to point out how excessive or unnecessary land-use or zoning regulations hurt economic mobility, worsen income inequality, and damage economic growth. Laws restricting housing supply make housing more expensive — such as in high-productivity, high-income cities such as Boston and San Francisco — and make it harder for workers to move to where the good jobs are. Only high-income workers can easily move to these places, "which reinforces existing inequality," as CEA Chair Jason Furman recently noted.
What all these nudges have in common is trying to remove barriers so markets work better for everyone. It's good economics, and these policies have plenty of support on both sides of the aisle. These are serious ideas meant to address real problems.
Imagine how much more momentum such an agenda would have if the nominee of party of "maximum economic freedom" worried more about lowering barriers than building them.