I have been reading a lot of conservative pundits arguing that our current economic situation is beneficial because the bad economy will likely keep Obama form raising taxes, and without additional revenues he will likely be unable to carry out the sweeping changes he promised. And that may be true. But I think they may be engaging in wishful thinking, trying to find a bright spot in an otherwise dismal picture. There is no guarantee their prediction is true, and even if it is, there is a very definite downside as well, that they never mention.

First, the downside.

Let me assume that they are right, that Obama is confronted with a situation too dire to allow him to raise taxes. Let us go even farther and suggest that he is wise enough to realize that drastic changes to the regulatory environment would also kill the goose that lays the golden eggs, and so to keep some funds available for social programs, he largely avoids touching business, even allows one or two Republican pro-business reforms to pass to maximize the money available. That is probably the best of all possible worlds from the point of view of the conservative pundits, but it misses one big problem.

Obama can easily pass the buck, and blame any failings on the situation he inherited. You see, those certain Obama will be unable to carry out most of his plans, are hoping that an ineffective Obama will serve but a single term, being voted out after a largely passive term. However, since he inherited both the occupations of Iraq and Afghanistan, along with rather sluggish economic conditions, it would be easy for him to build up any minor triumphs into resounding victories, and to brush aside any shortcomings as the fault of the preceding administration. Combined with a still subservient press and enthusiastic supporters eager to excuse him, this could lead to a second term. Granted, he is unlikely to provide the conditions needed for the economy to recover, so his second term will probably be as worthless as the first, but it would still mean eight years of prolonged economic stagnation, eight years of ultra liberal appointments tot he supreme and other federal courts*, eight years of gutting the military while using it as a social experiment, eight years of demolishing our intelligence community, eight years of diplomatic appeasement, and eight years of liberal social policy. So, while less harmful than expected, it could still be quite harmful.

But it gets even worse.

While pundits are convinced Obama will not raise taxes during a recession and will likely avoid meddling too much with business, there is no guarantee that will be the case. Let us not forget Carter and the example he set. Inheriting Nixon's few remaining price controls, escalating inflation, and stagnant economy, Carter did not do what thes epundits would expect, and leave the economy alone. Instead he began printing money with gay abandon, creating new regulatory bureaucracies, and generally leaving fingerprints all over the economy.

Do not forget that Keynesian dogma suggests deficit spending and monetary inflation as a cure to economic stagnation, and Obama is nothing if not over educated in liberal governmental dogma. So it is possible that he will follow the FDR path, and try to "cure; the economy by a combination of inflation, "investment" and regulation. Conservative pundits may realize such meddling will do more harm than good, but that ignores the fact that most liberals still think FDR got us out of the Depression (and even ended starvation!), so many think the way out of a recession is "stimulus" and meddling**.

So, while pundits may think the economic situation is a blessing in disguise by keeping Obama from raising taxes and thus preventing his social agenda, I would argue that it is far more likely the economic situation will inspire deficit financing and monetary inflation, along with even more widespread government activism, especially in economic matters, while using the newly printed money to fund government programs even more extensive than originally conceived.

I hope the pundits are right and I am wrong, but history has a lot of examples of liberals following the pattern I suggest, and very few who followed the pattern suggested by the pundits.

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* People often forget, in their focus on the Supreme Court, the damage a bad federal appellate judge can do. It may not be as absolute as the harm a Supreme Court justice can do, but these judges also set precedent, if only for their own district or circuit, and such precedents may also influence other districts or circuits, spreading the harm much more widely than many believe.

** To be fair, Republicans seem to buy into this absurdity as well, just to a lesser degree. Time and again, both parties seem to say the cure to problems caused by government meddling is more government meddling.