Three decades ago, the economy of The United States was in the throes of misery unlike any since the Great Depression.   We added words like “stagflation” and “the misery index” to our vernacular.  Unemployment rates were well into double-digits, interest rates were hovering around 20%

APR,  inflation rates reached over 14% annually, and consumer confidence was at an all-time low.  
  
The Left’s Icon of Economics, John Maynard Keynes, became the dominant economic influence among the intellectual elites after World War Two.  Keynesian theory, which emphasized heavy government investment into the economy, funded by an increasing tax burden on the private sector, collapsed with the stagflation of the 1970s.  Keynesian theory, when it was applied to the American economy, grossly overestimated the government multiplier effect and grossly underestimated the enormous bureaucracy built to infuse capital into the economy.   Its proudest achievement was the “Phillips curve,” which purported to depict a trade-off between unemployment and inflation.  The cure for unemployment was a little more inflation, and the cure for inflation was a little more unemployment.  When we experienced simultaneous inflation and unemployment increases, the Phillips curve fell.  It was then that a small group of “neo-classical economists,” meaning before Keynes, began to see the potential of what was about to unfold.

Ronald Reagan assembled some of the brightest economic minds of the time to create the economic policies of the early 1980s.  Some of the more prominent names were Robert Mundell, Arthur Laffer, Paul Craig Roberts, Robert Bartley, Jude Wanniski, Jack Kemp, Bruce Bartlett, and others.  This group crafted the policies later known as “Supply-side economics,” and launched an economic revolution that continued for almost thirty years and hammered the final nail into the Keynesian coffin.  While the Phillips curve fell to concurrent increases in unemployment and inflation, the supply-siders reversed the trend and simultaneously lowered both unemployment and inflation rates.  Another man, Fed Chairman, Paul Volker was then forced to support lowering interest rates. 

When the 1980s were finished, America witnessed the largest post-war economic expansion.  It was the depth of the expansion which made it even more remarkable.  Every socioeconomic class and every race saw an increase in standard of living (18%) never before seen in America.  The American Black middle class saw the largest expansion of any single group.   The capital investment made by the private sector (31% increase over
1980 levels), laid the foundation for the high-tech craze that followed in the 1990s and 2000s.  In less than a decade, gross national product rose 32%, American manufacturing grew by 48%, per worker productivity grew by 10.6%, and exports grew by 92.6%.  In steep contrast to the “decade of greed” label given to the 1980s by the Left, charitable giving grew at 5.1% per year, compared to the 3.5% over the previous 25 years.   Tax revenues increased by 99% over the decade; after lowering tax rates, tax receipts actually grew faster than GNP.

Now three decades later, we are faced with an economic condition different by some measures, but nonetheless almost as miserably as the one President Carter handed Ronald Reagan.   A former actor, with an economic degree from Eureka College, built a proven template for economic recovery less than 30 years ago, and buried  Keynesian theory with it.  All that an Ivy League lawyer would have to do is copy Reagan's proven template to reverse the crumbling economy.  However, Barack Obama chose to take the complete opposite direction Reagan and his advisors took in the early 1980s, and has exumed Keynesian economics from the grave.   Why?  Barack Obama has a different vision for America than Reagan did.

Ronald Reagan spoke of America as a “shining city upon a hill,” Barack Obama sees her as a deeply flawed bastion of oppression.   Obama's shining city is located on a river in Michigan.   Interpreting Obama’s words and his policies leads one to believe that his model for the rest of the country is Detroit, a city run into the ground by Democrats and unions for decades.

In Obama’s America, we can all enjoy the economic prosperity Detroit is currently enjoying; 29% unemployment and rising, the real jobless rate in Detroit is much higher than the official figure of 29 percent, due to the tens of thousands who have given up looking for nonexistent jobs. This crisis has been exacerbated by the forced bankruptcies and restructuring of General Motors and Chrysler by the Obama administration, which, with the support of the United Auto Workers, destroyed thousands of jobs and slashed the wages and benefits of auto workers and retirees.  The highest home foreclosure rate in the nation is in Detroit, along with the highest violent crime rate and the highest rate of poverty.  The average home price in Detroit is under $12,000. 

Why would the president want to use the poorest, most violent city as an economic model for the rest of the nation?  The statistic that matters most to Obama is the percentage of families receiving government assistance.  Detroit leads in that category, too.  In Obama’s America, government is always the answer.  Barack Obama’s shining city is one where income is distributed evenly, by government.  It is one where every basic need is provided, by government.  Most importantly, it is one where its inhabitants do not bite the government hand that feeds them.