The president’s dangerous Grannynomics

Richard Lorenc Cofounder, Liberty Markets LLC
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On Chicago’s South Side, there is an environmental activist named Naomi Davis who preaches the gospel of “Grannynomics” to the African-American community.

Based on the lifestyle of Davis’s grandmother — the wife of a Mississippi sharecropper — Grannynomics teaches adherents to grow their own food and generate the energy for their homes. It’s a localist movement designed to appeal to a community that is suffering due to an educational system that doesn’t serve them, anti-drug policies that incentivize crime, and a shortage of suitable jobs.

“To be in the business of making something and selling it in this new green economy is probably the closest thing to a silver bullet we’re going to see, maybe ever,” says Davis in a video on the website of her organization, Blacks in Green.

Despite this talk of making and selling, Grannynomics essentially eschews economic specialization in favor of generalization. Davis writes on her website, “In my mom’s walkable village, everything they ate, they grew; everything they wore, they made; and they were happy.”

Happy, perhaps, but Davis’s Mississippi village ancestors were indisputably poorer, overworked, and shut off from the world. They had to make everything for themselves because they had no other choice.

Unfortunately, the noble yet poorly considered tenets of Grannynomics are now appearing with greater regularity in the words of the president of the United States, and are unlikely to make anyone very happy aside from the companies that stand to benefit from new excuses for government largesse.

Stated in terms reminiscent of ads for pickup trucks, President Obama last week outlined his vision for “an America built to last.” His new industrial policy includes incentives for manufacturers to create factory jobs in the United States and stricter import rules on industries subsidized by the Chinese government.

This may sound nice, but it is in fact Grannynomics on a national scale. It says that poor Americans should pay more for clothing and technology; that American firms that can’t afford to pay American workers should be punished for trying to continue in business abroad; and that America should have a 20th-century economy for the foreseeable future.

The president’s go-it-alone plan won’t create jobs either. According to a survey from the Bureau of Labor Statistics, less than three percent of large-scale layoffs in recent years have been caused by outsourcing. The real causes of unemployment lay at the feet of an overzealous regulatory state, which cost the economy $1.75 trillion in 2010, according to the Competitive Enterprise Institute.

The president’s latest industrial policy is old-fashioned, counterproductive, and anti-progress. It would make America poorer and less adaptable while substantially reducing our global influence.

You might expect such a lack of economic sophistication from your granny, but it’s sad to hear it from the White House.

Richard Lorenc is co-founder of the Liberty Markets Fund for Freedom, a community foundation recruiting small donors to the pro-liberty think tank movement.