Obama vs. Capitalism
In September of 2004, I attended a conference on economic development in the Donetsk region of Ukraine. A Ukrainian academician proudly presented the major achievement of his institute — a twenty-year plan for developing the market economy in the region.
After his presentation I asked: “Why does the market economy need a twenty-year plan?” The angry scademician replied: “How can it develop without a plan? It would be a chaos.”
“I don’t think so,” said I. “The market will regulate itself. No one planned for Microsoft or Apple.”
“I am sure that you are wrong,” said the academician. “Some people in the White House definitely thought that through.”
I recalled that exchange recently when I heard President Obama say: “If you’ve got a business, you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.”
I realized once again that the idea of an invisible hand may be not so agreeable, even for people with high intellect and good education. Indeed, the idea of market self-regulation is very complicated theoretically and is yet to be proven with the rigidity of the laws of physics.
Many of those who appreciate the idea do so as a result of personal experience. The Obama administration has a dearth of such people. The fact that there are far fewer persons with entrepreneurial experience in the current administration than in any previous one may explain the administration’s obvious distrust of the market economy and strong belief in government regulation.
In a recent TV interview, White House adviser David Plouffe said: “We wouldn’t have an automotive industry if he [Mitt Romney] had been president. President Obama secured that.” Plouffe was talking not about any particular plant, not even about General Motors, but about the industry created by Henry Ford, Alfred Sloan, and other entrepreneurial geniuses and the thousands of talented engineers and highly trained workers that work in it. To think that the existence of that industry is secured not by all those people, but by a few bureaucrats, who have never created anything in their life, is delusional.
Unfortunately this delusional economic philosophy underlies the basic premise of the Obama’s administration that without guidance by the government the private sector is unable and unwilling to do things which are good for the American people. That is why Obama decided to spend $90 billion to develop “new” sources of energy. The money was not spent on fusion but on technologies that can be developed by private companies, without governmental assistance, if the companies decide that there is a demand for them.
And here comes the second part of Obama’s economic philosophy: we cannot count on demand since the people don’t know what is good for them and can be easily deceived by evil corporations. The only benevolent force to protect people not only from those corporations but also from themselves is a federal government.
Barak Obama: “The answer is more government!” “What was the question?”
Well said. Obama is a theoretician. Romney is an empiricist. Trust that a theoretician cannot find his a$$ with both hands out in the real world.
These people are so incredibly ignorant,yet think they are so smart and enlightened. How do you deal with people like that?
I call it arrogant incompetence, and the other side of the same coin is invincible stupidity.
New York and places devastated by hurricane Sandy are good examples of public vs private responses to “needs” that could be met by supply and demand. If gas were allowed to rise to $6-7 per gallon, there would not be huge lines and tanker trucks would be headed there as if in a migration. If I could double my income on a tanker filled with 12,000 gallons of gas by driving to New York, that’s where I’d be headed. The same is true with food, water, blankets, etc.
If utility workers were paid double-time for work done in these areas power and water would be restored in record time. But the central planner, the government official would declare it price-gouging. So, the people in apartments without lights or working toilets get to wait until the emergency crews respond to their “demands”. I mean, they had a ‘plan’, didn’t they?
Obama’s America eliminates those with the where-with-all to move freight and services to areas of need. Or to put basic products on the shelf. Fat cats and anyone making over $250K need not apply. They’ve probably made too much money and have taken more than their “fair share”.
Markets self-regulate only to the extent that government acts as a neutral referee, with rules that are neutral between parties. To the extent that government attempts to pick winners and losers, to shape rules in favor of some parties and against others, market self-regulation fails. Such non-neutral rules exacerbate bubbles, deepen and prolong recessions, and reduce economic growth, harming everyone, but particularly the most vulnerable. Just such rules caused the housing crisis and ensuing recession, and are responsible for our current stagnation, falling median household income, and high unemployment. If we want to return to historically high growth, rising incomes, and employment, we must return to more neutral rules, and a more neutral government.
Well, my dad ESCAPED from his native Ukraine, my uncle got FORCED into the Red Army,and later escaped. I know what you’re talking about , sir.
I think we are going to have to go through another turn of the great wheel of Karma and repeat all of this over here. We will not live to see the next turn of the wheel.
It’s starting to look like a Mad Max/Huxley type future out there. Better teach your kids to fight, farm, and make babies and how to withstand harsh climates. These micromanagers have no intention of giving up, and technology is castrating the intellect of all others.
Meanwhile, reach for that glass of Pinot and enjoy God’s world while we have it !
Leaders understand the importance of the glue that binds people together and exterminate the “enemy” within before they leap into Great Empire taking over the world and exterminating all enemies of the Empire
Not Welcome
http://www.nytimes.com/2012/11/07/opinion/in-china-unwelcome-at-the-party.html