Richard Epstein is a senior fellow at Stanford’s Hoover Institution and a professor of law at the University of Chicago, visiting this fall at the New York University School of Law. Given Obama’s former association with the University of Chicago Law School, Epstein used to know Obama and corresponded with him when he was a state senator.
Given their personal relationship, it seems significant that Epstein joins millions of anonymous Americans in wondering: Do we really know Obama? Epstein writes:
The odd point is how his many learned and thoughtful supporters couch their endorsement. Almost without exception, they praise the man, not the program. Their claim is that Obama has proved himself to be a consummate politician who understands that the first principle of holding high office is to get reelected. His natural moderation in tone and demeanor, therefore, translate into getting advisers who know their substantive areas, and listening to them before making any rash moves. The dominant trope is that he will be a pragmatic president who will move in small increments toward the center, not in bold steps toward the left.
But is it all true? The short answer is that nobody knows. Virtually everyone who knows him recognizes that he plays his cards close to the vest, so that you can make your case to him without knowing whether it has registered. At this point, my fear is that the change in office will not lead to a change in his liberal voting record, as reinforced by a hyperactive Democratic platform. My great fear is that a landslide victory will give him solid majorities in both Houses of Congress, so that no stalling tactics by Republicans can slow down his legislative victory procession. At that point his innate pragmatism will line up with his strong left-of-center beliefs on issues that have thus far been muted during the campaign.
Epstein goes to describe “three key components, which, taken together, can convert a shaky financial situation into a global depression.”
The first of these is his anti-free trade attitude that loomed so large in the primaries. But even Obama cannot repeal the principle of comparative advantage. Any efforts to scuttle NAFTA, deny fast-track approval to other agreements, or limit outsourcing will not be as dramatic as the Smoot-Hawley tariff. But combined, they would act as a depressant on general economic growth. Everyone would suffer.
Second, Obama is committed to strengthening unions by his endorsement of the Employer Free Choice Act, a misnamed statute that forces union recognition without elections and employment contracts through mandatory arbitration thereafter. That one-two punch could tie up the very small businesses that Obama seems determined to help. Tax relief won’t work for firms that won’t get formed because a labor fight is not in their initial budget.
And third, he is in favor of progressive individual taxes and high corporate taxes. It is as though the U.S. does not have to compete for labor and capital in global markets. My fear is that with his strong egalitarian bent, he has not internalized the lesson that high rates do not offset declining revenues.
Read the whole thing.