Yesterday, in Cleveland, Ohio, Mr. Obama marched out his newest plan to stimulate the economy.  Included in the $180 Billion plan were two very good ideas:  A permanent R & D tax credit, and one time (2011 only) write off for business capital purchases.  Both of these ideas are the sort of thing that encourages business to take risk.  I am convinced that both of these measures will produce some economic activity.  I have the feeling that Congress will want to join the President and pass such measures before the November elections.  I don’t have the feeling that they will be able to do so without adding a fair percentage of pork to the bill.

A couple of observations:  1.  $180 Billion for this program is one helluva lot of money, yet, with the current Congress and Administration who brought us $800+ Billion in ‘Stimulus’ and untold Billions (probably Trillions) in ‘Health Care Reform’, this seems like a drop in the bucket.  2.  This is a complete reversal for Mr. Obama who during the campaign made fun of Mr. McCain’s economic plans which included these two measures.

It makes me wonder.  Why would Mr. Obama propose such measures?  I see only three possible answers.

First, (color me cynical but this is the first thought that comes to mind) Mr. Obama is trying to buy votes.  His choice of venue tells us this is purely political.  The timing (wouldn’t you try the $180 Billion fix before the $800+ Billion fix?) appears to be politically motivated.  Current polls consistently show that Mr. Obama and the current Congress are starting to take the blame for not fixing the economy.  It seems if they attempt some logical steps and don’t fill the measures up with more pork, they might just persuade some folks that they are serious about fixing the economy.  This might actually buy some votes from folks who really want to believe in Mr. Obama.

Second, Mr. Obama truly believes these measures will help our economy and he is sincere about doing so.  This would either indicate that he has just come to the realization that all the previous programs were not the answer.  If that is the case, he is a hopelessly slow learner or exceedingly stubborn.  Or, maybe he was just so clueless about how a capitalistic economy works that it has taken him about 3 years to start to come up to speed.

Third, it could be a combination of Mr. Obama wanting to buy votes and wanting to improve the economy.  I think this may be the closest to being right.  I think that Congress and the President have allowed the economy to get weak enough to increase the power of government to a point where they could get what they want – control (some would say nationalization) of the auto industry, control of the health care industry, and control of the higher education industry.  Further weakening the economy would just mean more power over something of less value.  It makes me think of slaveholders:  the perception is that many of them beat their slaves to gain full control over them but didn’t beat them so much that the slaves could not still do a full day’s work.

If you believe that these moves are not inspired in large part by a desire to buy votes, let me know.  I’m convinced they are.

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