Obama: Keynesian Economics or Cloward-Piven Strategy

The Main Stream Media and Liberal defense of Obama’s Economic Policy has been that he is using “Keynesian Economics” to stabilize our economy and to give him time. Well it’s time to look at Keynesian Economics and see if it matches.

According to BusinessDictionary.com Keynesian Economics is:

..the assertion that the aggregate demand created by households, businesses and the government and not the dynamics of free markets is the most important driving force in an economy. This theory further asserts that free markets (despite the assertion of 18th century Scottish economist Adam Smith and other classical economists) has no self-balancing mechanisms that lead to full employment. Keynesian economists urge and justify a government’s intervention in the economy through public policies that aim to achieve full employment and price stability. Their ideas have greatly influenced governments the world-over in accepting their responsibility to provide full or near-full employment through measures (such as deficit spending) that stimulate aggregate demand.

According to Investopedia

What Does Keynesian Economics Mean?
An economic theory stating that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.

Investopedia explains Keynesian Economics
A supporter of Keynesian economics believes it is the government’s job to smooth out the bumps in business cycles. Intervention would come in the form of government spending and tax breaks in order to stimulate the economy, and government spending cuts and tax hikes in good times, in order to curb inflation.

My Analysis:

1. If Obama were actually using Keynesian principles he would, in these troubled times, be giving tax breaks to the rich in order to stimulate and aid the economy, instead we are expecting massive tax increases on the rich which will kill the economy. Not renewing the Bush tax cuts equals a tax hike, exact opposite of the Keynesian explanation.
2. The Health Care Law amounts to a tax increase on business forcing them to make cuts and layoffs as well as drop coverage to employees.
3. The pending Cap & Trade Bill is a massive tax increase on every business and every individual. The Coal industry will be unable to continue and electricity/gas prices will skyrocket. The increased price of energy will trickle down to kill manufacturing in the USA and if anything is made here, it will be too expensive to purchase on top of raised domestic energy costs. The lack of suitable energy to replace coal will cause mass rolling blackouts. Not very economically stimulating, therefor anti-Keynesian.
4. The Financial Reform Bill does little to Wall St. but affects banks that would loan to small businesses, in short, don’t expect any loan. No loan no business, no business no contribution to the economy, hence, anti-Keynesian.
5. The Many Stimulus Bills, on the surface appear keynesian, borrowing money, even deficit spending, in order to stimulate the economy and create or save jobs. However once you look into to the actual projects and the prices for them, you realize the majority of these projects are complete wastes of money and are therefor frauds which have no positive affect on the US economy, lasting or temporary.

I have made the case he is not using Keynesian Economics, now I’ll explain what I believe he is doing.

The Cloward-Piven Strategy from DiscoverTheNetworks.org

“First proposed in 1966 and named after Columbia University sociologists Richard Andrew Cloward and Frances Fox Piven, the “Cloward-Piven Strategy” seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.”

“In their 1966 article, Cloward and Piven charged that the ruling classes used welfare to weaken the poor; that by providing a social safety net, the rich doused the fires of rebellion. Poor people can advance only when “the rest of society is afraid of them,” Cloward told The New York Times on September 27, 1970. Rather than placating the poor with government hand-outs, wrote Cloward and Piven, activists should work to sabotage and destroy the welfare system; the collapse of the welfare state would ignite a political and financial crisis that would rock the nation; poor people would rise in revolt; only then would “the rest of society” accept their demands.”

“The key to sparking this rebellion would be to expose the inadequacy of the welfare state. Cloward-Piven’s early promoters cited radical organizer Saul Alinsky as their inspiration. “Make the enemy live up to their (sic) own book of rules,” Alinsky wrote in his 1989 book Rules for Radicals. When pressed to honor every word of every law and statute, every Judaeo-Christian moral tenet, and every implicit promise of the liberal social contract, human agencies inevitably fall short. The system’s failure to “live up” to its rule book can then be used to discredit it altogether, and to replace the capitalist “rule book” with a socialist one.”

Another title to this strategy has been “The Strategy of Manufactured Crisis” to go with what we have heard from this administration we could call it “The Strategy of Never Waste a Crisis” but I digress…

The objective is quite simple, overwhelm the system with impossible demands and it will collapse, in the chaos that follows you implement a Socialist system to “Save” everyone because “Capitalism falied” them and they will simply accept it.

Are we seeing this in play? I believe we are – this has been Obama’s plan from the beginning.

1. The National Debt is near the breaking point and we have been warned by Moody’s that if we don’t stop spending we will lose our AAA credit rating, yet Obama continues to spend frivilously.
2. Even the EU, which is in dire straits with riots in Greece and Spain has decided to stop the spending, yet Obama chastises them for it and demands they continue spending like he is.
3. Obama’s non-Keynesian economics do not bolster the economy, but create uncertainty. Uncertainty in business does not encourage hirings, which would stimulate the economy, but layoffs and cutbacks just in case.
4. The way he has demonized the rich, in his own words, and other comments made by Obama demonstrate that he is no friend of business or free market but instead has Socialistic goals.
5. The Health Care Bill did nothing to lower the costs of Healthcare itself and forces insurance companies to raise premiums in order to cover all the new people added to the rolls that have existing treatment needs but never payed into the pool. By denying them the power to raise their prices, Obama is forcing them into Bankruptcy. He will then Implement the Socialistic “Public Option” to replace the Insurance Companies. Nancy pelosi did promise us that we, “will be begging for the Public Option.”
6. The rampant unemployment due to Obama’s economic policies is bankrupting the entire State/Federal unemployment benefit system and overwhelming it. Directly inline with Cloward-Piven goals. The majority of the 50 States are at or near bankruptcy and cannot afford to pay for their own infrastructure let alone all the unemployed in this “Recession”
7. Those lovely stimulus bills did not spend responsibly in any way, shape, or form. You can do a simple google search and find idiotic projects next to mindboggling prices. The worst part to this waste is that quite a bit even went overseas to be wasted there. Telling Hookers to drink responsibly in China, Fossil research in Argentina, and more, which could have absolutely 0 positive affect on the US economy.
8. The rapid expansion of Government agencies and infrastructure only hastens economic collapse, not slows it. Government by nature is a leech feeding off of private business. The Government does not generate any income only takes it from productive citizens in the form of taxes and therefor cannot pay for itself.
9. And finally, the last straw on the US economy’s back will be the Cap & Trade bill if implemented. Any business not over-outfitted with alternative energy will cease to exist on its own. Big Business will cut production, institute mass layoff’s, and dramatically draw down operations. Small business will die. This is economic armageddon and the deathblow to free enterprise and Capitalism.

Once fully implemented the Cloward-Piven Strategy will collapse all free enterprise. Obama will then move to Nationalize everything in order to “Save the economy” This I believe is where Obama is bringing us. However, The strategy will not end peacefully regardless of what its inventors predicted. The American People will resist the implementation of Socialism and will always rally behind freedom, not control.

If interested in reading the original article written by Francis Fox Piven and Richard A. Cloward, “The Weight of the Poor: A Strategy to End Poverty” https://www.commondreams.org/headline/2010/03/24-4
You can find it here at “CommonDreams.org” a website that describes itself as follows:

“CommonDreams.org is a national nonprofit, progressive, nonpartisan citizens’ organization founded in 1997 by political activists Craig Brown and his late wife, Lina Newhouser.
We are a powerful online voice for change in America.
With millions of monthly readers, we have become one of the top progressive websites.”

Yet another link between crushing capitalism and implementing Socialism as a goal of any progressive policy.

UPDATE August 1, 2010

Heres an amazing video on Cloward-Piven Strategy

Hattip to @AlinskyDefeater

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