Federal Judiciary

The 'Investment? Euphemism

Pres. Barack Obama hopes to be saved by a euphemism.

He is wagering on the power of the word 'investment.' It sounds so market-oriented and cutting-edge in contrast to its more pedestrian, politically fraught synonym, 'spending,' especially the toxic 'deficit spending' that, to this point, has defined Obama's presidency.

#ad#The focus on 'investment' is nothing new. Obama already had leaned heavily on one of the hoariest Democratic tropes. When he signed the stimulus bill in February 2009, he used the word 'invest' or 'investment' 15 times in a 2,000-word speech. A casual listener might have been hard-pressed to understand that any new government spending was involved at all, what with all the 'critical investments,' including 'the largest new investment in our nation's infrastructure since Eisenhower' and 'the largest investment in education in our nation's history.'

In a June 2010 speech at Carnegie Mellon University on his vision of a 'new foundation' for the economy, Obama uttered the word 'invest' or 'investment' about two dozen times. If he weren't president, he might be working in a boiler room somewhere, touting a dubious stock. Former Bush official and Hoover Institution fellow Keith Hennessey substituted 'government spending' for 'investment,' getting this Obama paragraph:

It's a foundation based on government spending on our people and their future; government spending on the skills and education we need to compete; government spending on a 21st-century infrastructure for America, from high-speed railroads to high-speed Internet; government spending on research and technology, like clean energy, that can lead to new jobs and new exports and new industries.

Going back at least 20 years, 'investment' has been what Democrats say when they want to spend. In his 1993 State of the Union address, Pres. Bill Clinton used the word about two dozen times, right before a liberal bender that ended the Democrats' 40-year grip on the House.

Obama isn't changing his economic philosophy. He's not even dressing it up with a new word. It's the same old spending, although presumably not quite as reckless as the first bout. His administration is perpetually stuck on stimulus.

The New York Times Magazine ran a long 'what went wrong?' report on Obama's first, mostly departed economic team. The regret of former top adviser Christina Romer is that the administration wasn't 'bolder' in getting more stimulus money from Congress after the initial package. If the experience of the stimulus bill hasn't chastened the Obamaites, nothing will.

What has the return been on all those investments we were told would 'bring real and lasting change for generations to come'? In an article in Commentary magazine, John F. Cogan and John B. Taylor detail how the slow-moving infrastructure spending in the package barely made a ripple in the economy. As for the rest of it, 'the borrowed [federal] funds were mainly used by households and state and local governments to reduce their own borrowing.'

The government is not Warren Buffett. An ungainly, politically driven behemoth, it is not a good judge of value, and it almost never cuts its losses. We have 'invested' untold billions in federal dollars in education since the 1970s, and test scores have barely budged. We have been subsidizing alternative energy for just as long, and have only created a hideously inefficient green-energy sector. We have allowed transportation spending to be warped by gross congressional politics (earmarks and logrolling) and silly fads (light and high-speed rail).

Modesty is in order. The federal government can invest at the margins, in basic research and the like, and can hope that some of its activities -- the space program and defense, for instance -- spin off useful technologies. Otherwise, its role is setting the predicate for the private investment that drives innovation and ultimately job growth. That means cutting spending and regulation, reforming the tax code, embracing free trade, and providing a reliable environment for commerce.

In other words, controlling government 'investment' and other Washington excesses.

— Rich Lowry is editor of National Review. He can be reached via e-mail, comments.lowry@nationalreview.com. © 2011 by King Features Syndicate.

Full post as published by Bench Memos - National Review Online on January 25, 2011 (boomark / email).