It is ironic that Barack Obama won office in large part due to an economic bubble that burst. The housing market bonanza couldn’t go on forever. And when it didn’t, the entire financial sector melted down. In other words, because there was insufficient wealth (or actual value if you prefer) in the assets being traded back and forth, the system couldn’t go on forever. Sooner or later people get nervous and want their money out. (Michael Lewis’s Boomerang is still the best description of this for those who are not economic experts.)

President Obama President Obama’s progressivism is a mirage (Larry Downing/Reuters)

Now Obama is presiding over a collectivist bubble. Again, we are not creating wealth; instead Obama is taking and/or borrowing from one pocket to put in another. It should be no surprise that this does not increase wealth or employment, especially when you add in a mound of regulations and tremendous uncertainty.

And it is therefore not surprising that Obama left out all that stuff about employment, growth, the private sector and such from his inaugural speech. Because to mention these is to break the spell of progressivism and reveal that it is as unsustainable as that housing bubble. (In this case at some point it is the bond holders who want their money out.)

Yuval Levin in a must-read piece puts it this way: “Our foremost domestic challenges now almost all have to do with mitigating the enormous damage done to our economic dynamism, our social fabric, and our fiscal prospects by the public exertions most directly attributable to the sort of progressivism Obama laid out.” Obama’s moral condescension  and absolutism (irony alert) postulate that, as Levin says, “The individual acting alone or the entire nation acting through its government, those are the only options we have.” And you’re either with the president and collectivism or you’re a proponent of “rabid (even stupid) radical individualism, of desiring to throw the elderly and the poor onto the street, of wanting to leave the parents of disabled children with no options, of believing that freedom should be reserved for the lucky and happiness for the few, and of putting dogma and party above country.”

Obama’s progressive perpetual motion machine (more taxes, more spending, more borrowing) fails because it crushes the wealth-creation mechanisms needed to pay for all that stuff and the interest on the money we borrowed to pay for that stuff. He can’t mention employment and growth because his political worldview can’t acknowledge we need such things — or that his own vision is so top-heavy, initiative-killing and plain unworkable that you wind up, well, like Europe. Profit is not essential in his view, but rather is actually distasteful because it just makes the rich richer.

Obama is selling progressivism, but its really the same snake oil that housing derivatives were greased with. It assumes if we don’t look down, get nervous and wonder where the real money is, we can keep going forever. Obama thinks of himself as our moral better and the opposition as deliberately blocking our liberal dream state. But actually he’s just a con man trying to tell us the “rich” can pay for it and nothing needs to be eliminated from, only added, to the modern welfare state.