Excerpt:Â Â As prolongation of the 1930s Depression and stagflation in the 1970s demonstrated, Senator Obamaâ€™s announced policies are a prescription for economic disaster. Keynesian economic doctrine, not under that name, but in substance, is back in the news in a truly menacing way. Senator Obama proposes to repeat the policies of Franklin Rooseveltâ€™s New Deal that turned an ordinary two-year recession into an eight-year disaster, with unemployment rates continuously in the high teens.
The key elements of Senator Obamaâ€™s proposed economic policies, as in the New Deal and the stagflation of the 1970s, are much higher taxes, along with a pervasive increase of business regulations and price controls in healthcare and energy (which sharply depress business activity and employment rates), full-frontal embrace of labor unions (which will push up wages and benefits to levels deterring profitable expansion of industrial production), and massive new government deficit spending (which will accelerate the already dangerously high rate of inflation and devaluation of the dollar). Carried out as he proposes, Senator Obamaâ€™s polices will lead us again into the swamp of stagflation.