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A Further Perspective
Obama’s Two-Bit Nod to Capitalism
A whiff of Milton Friedman amid the Saul Alinsky.
Attempting to patch things up a bit with the business sector, President Obama began his February 7th speech at the U.S. Chamber of Commerce sounding more like Milton Friedman than Saul Alinsky.
“America’s success didn’t happen by accident,” Obama declared. “It happened because of the freedom that has allowed good ideas to flourish and capitalism to thrive.”
Now there’s a breakthrough! The word “capitalism” isn’t generally used in a positive way by activists on the left, especially by community organizers. Their job is to stir things up on the street by demonizing people like a “capitalist” landlord who didn’t jump fast enough to change a light bulb or to paint over the latest assault of graffiti on his property.
Like Obama’s comment about the link between freedom, good ideas and capitalism, Friedman, decades ago, wrote about the direct connection between freedom, free enterprise, and widespread prosperity: “The record of history is absolutely crystal clear. There is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”
President Obama also stated in his February 7th speech that the United States had “the freest markets” in the world — not just one of the freest, “the freest.”
In fact, the United States placed eighth last year in the Index of Economic Freedom, a ranking of nations by market freedom compiled by the Heritage Foundation and the Wall Street Journal, based on performance on things like business freedom, property rights, trade freedom and government spending.
Among the top 10 nations in the survey, the United States scored better than Chile and Denmark, but ranked below Canada, Switzerland, Ireland, New Zealand, Australia, Singapore and Hong Kong.
This year, following the second year of Obamanomics, the United States dropped to ninth place.
On the internationalization of the economy, Obama told the Chamber audience that the “globalization of our economy means that businesses can now open up a shop, employ workers and produce their goods wherever an Internet connection exists.”
More significant, internationally, is the fact that the United States now has the highest corporate tax rate in the world among the major industrialized nations. Last year, Japan had the highest rate, but its move to cut the tax this year by five percentage points put the United States in first place with the highest corporate tax rate.
“I want to lower the corporate rate,” Obama said, “and eliminate these loopholes to pay for it, so that it doesn’t add a dime to our deficit.” In short, he won’t “add a dime” to what businesses overall are permitted to keep out of their own earnings, so the United States will remain in the top spot in the confiscation of earnings, deterring economic growth and new job creation.
“We need to make America the best place on Earth to do business,” Obama told the business audience. We need to “knock down barriers that make it harder for you to compete, from the tax code to the regulatory system.”
In fact, rather than knocking down obstacles to American competitiveness, President Obama’s agenda of higher taxes, more regulations, more mandates, more litigation and more unionism does exactly the opposite.
How does it make it easier for a business to survive or compete when the mandates in ObamaCare make health care a required business expense, regardless of the ability of the business to pay?
How is it easier for American businesses to compete internationally when health care expenses overseas are funded via general revenues, while here they’re now set to be a mandated business expense under ObamaCare?
About the Author
Ralph R. Reiland is the B. Kenneth Simon professor of free enterprise and an associate professor of economics at Robert Morris University in Pittsburgh.
Letter to the Editor View all comments (19) | Leave a comment
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MoeBlotz| 2.15.11 @ 7:23AM
Maybe youse dinna' listen to any of Barry's great speeches. The chosen one will lead us to prosperity by taxing the rich and spreading the wealth around. By forcing us off traditional energy sources,Barry will show us the way to heal the climate and lower the rising sea. Oh ye' of little faith. !(@*#&$^%?"}{>
Alan Brooks| 2.15.11 @ 10:15PM
But Bush went along with Obama from November of '08.
What are you all saying? RINOs can be democratic socialists?
Appleby| 2.15.11 @ 7:32AM
Anybody who thinks there is economic freedom in Canada has never actually lived and worked here. We just got a little booklet produced with our provincial tax dollars advising us that our electricity rates will go up 46% in the next five years as our province has paid the South Koreans to build windmills and solar farms in a place where there is little sun and where the erratic power of wind turbines guarantees that people will soon choose between freezing and starving. Milk is $4.19 a quart now, and gas just went up to $1.15 a litre (for you Americans, that is about $4.60 a gallon). And this past Saturday for the seventh time in a row, the local monopoly bookstore informed me that they didnt have either of the books I wanted.
Canada is a basic socialist country, and there is a good reason 80% of the population lives two hours from the American border.
Handy| 2.15.11 @ 12:21PM
Appleby,
I always enjoy your posts from the Great White North, but have never responded directly, because you usually have "said it all." On the matter of inflation, there is more to say, however.
Inflation over the past few decades has been grossly "mis-under-estimated." The actual direct costs of almost every good you can imagine have come down due to productivity increases. But, retail prices continue to rise. Why?
There are obvious examples such as sales, tobacco, alcohol, fuel, and property tax increases. Less apparent are the costs of complying with government regulations and mandates. Still less visible is the destruction of the purchasing power of fiat currencies. The widest measure of inflation is the GDP implicit price index. But, we rarely see this published. Rather, we get the Consumer Price Index which is based on an arbitrary basket of goods (excluding fuel, rents, property taxes and a few other essentials). The CPI is as easy to rig as the unemployment rate. For every dollar of efficiency gained, nefarious government fiscal and monetary policies take a dollar plus.
Whereas infltion has been consistently and intentionally understated, there is so much more fun yet to come. Like water behind a dam, there is a sea of paper money sitting in bank vaults that is just waiting to be lent once economic uncertainty subsides. I call it "latent inflation," and once the flood begins, it will be many decades before the waters recede. (That should trip a Metaphor Alert from James Taranto of the WSJ.)
Obviously things could be better in the USA. The only reason that they are not worse is that the rest of the world has bigger problems. There is talk about creating a new reserve currency to replace the US Dollar, but that will not help matters. Ultimately, it will just be another piece of paper. It will be like that episode of M*A*S*H where they exchanged military scrip.
When the US goes belly-up with hyper-inflation, the rest of the world will lose its biggest customer. No one will be safe.
Alan Brooks| 2.15.11 @ 11:38PM
"the local monopoly bookstore informed me that they didnt have either of the books I wanted."
They didn't stock
"Anne Coulter's Guide To Poking A Liberal In the Eye"?
or
"Anne Coulter's Guide To Boxing A Progressive's Ear"?
How sad.
David W| 2.15.11 @ 9:34AM
The Federal government takes money from the individual taxpayers in a state, skims off a certain percentage for salaries/benefits for federal workers and for administrative overhead, and then doles the remaining dollars back to the states via a system that is fraught with favoritism, back-scratching, cronyism, and outright corruption.
This sounds like a system that a fifth grader would come up with. Oh wait, no fifth grader would be that stupid. It must have been created by a Democratic/Republican socialist (socialist = fifth grader - any amount of common/business sense).
Petronius| 2.15.11 @ 10:29AM
My demoncrat neighbor gripes about $3 per gallon gas and food prices up 15% on meat and other items. I told him, "you voted for it." His response was that, "these price gouging bastards should have their taxes raised." The fact that liberal policies drive up costs mean nothing to him. See Ambrose Bierce's definition of the word "Idiot". I give that word a secondary definition here and now: idiot; n: the primary reason Obama will be re-elected president in2012.
Ned| 2.15.11 @ 11:28AM
Same experience with friends of my wife. He voted for Barry Bull$hit, his wife voted for the Hildebeast, and of course they both voted for every left-wing ding-bat and crook that the People's Republic of Washington (State) could get onto the ballot. Then he got laid off.
All of a sudden it was too expensive to live in the Seattle area (why IS that, do you suppose?)... so they packed up and moved back to their home town (small, mid-west) where the politics are RED, and the cost-of-living is half or a third what it is here... leaving behind the fiscal disaster that they helped vote in, for the rest of us to suffer with.
Ken (Old Texican)| 2.15.11 @ 10:52AM
Mr. Reiland,
you used precisely the correct "X marks the spot"
(Uncertainty!)
We don't know WHAT the jerk is going to do next, here at home...or abroad.
PattyMor| 2.15.11 @ 11:56AM
I no longer believe anything coming out of the mouth of Obama. He is just a lying, conniving, cheating Marxist/Communist. He will say anything that he thinks people will buy; then he does the Leftist logroll.
Pat| 2.15.11 @ 12:35PM
As with other intestinal parasites, the relationship between us, the host organism, and our government is not mutually beneficial. Doesn’t mean it was always that way but, over the years, we as citizens have changed - our collective view of government has changed - and our inability to purge a growing tapeworm from within our system has become a major concern both for us - and for our tapeworm. The Dems, more so than the GOP, rely on the business community to provide the funds to “help the helpless” - - in their view, business must generate the prosperity upon which the government will feed - how business goes about doing that doesn’t concern our politicians – only that the host continue to thrive so the process will continue.
A couple of centuries ago, our young government demanded its citizens maintain their individual dignity and independence from historical tyranny. Parents were responsible for educating kids who could perpetuate a republic of free men and women – turning out citizens who were more than loyal subjects of a hereditary monarchy supported by a select few within the Nobility and the Church. The results of our Founders’ efforts was new and exciting. A nation of people who violently rejected a parasitical relation with their rulers – but the novel experiment couldn’t sustain itself.
With apologies to Henry Stimson, today our government is like the alimentary canal, you stuff it with food at one end and what comes out the other end is nothing but crap.
Oldefarte| 2.15.11 @ 12:39PM
THIS is what this country deserves for its STUPIDITY of handing the MOST IMPORTANT JOB IN THE WORLD to this COMMUNITY ORGANIZER/SOCIAL WORKER. In life, you get what you deserve in many situations, and this is one of those situations. I'd give my right youknowwhat if anyone here had the courage/guts to acknowledge that they voted for him in 2008 [he was elected by a clear majority of votes, and no doubt many here commenting did vote for him, but are now too ashamed to admit do so]. The only question now is has this country awakened from its slumbering STUPIDITY and are we willing to admit our collective mistake of 2008 and remedy same in November of 2012?????????????????
Mimi| 2.15.11 @ 1:55PM
Mark my words O-F...The patriots, the Tea Party, every one who voted the " BUMS " out in Nov. 2010... plus the many that got P O'D since will come out in droves to VOTE out the HEAD of the CULPRITS!!
Wayne | 2.15.11 @ 2:05PM
I don't believe that the Chamber of Commerce represents capitalism at all, except maybe crony capitalism. They are about as far left as the SEIU.
Ned| 2.15.11 @ 2:21PM
Might I pose a question?
I don't recall the context at the moment, but I do remember encountering someone positing a semi-justification of the Obozo deficits by stating that they really aren't nearly as bad as is being made out by those evil "Righties". That according to the speaker, much of the deficit was actually incurred simply by moving off-budget military expenses in Iraq and Afghanastan on-budget.
Sounded phony to me, but can anyone confirm or deny?
Ah! Just remembered the context. The speaker was one of Frank Luntz's focus group participants. You can guess which side of things the speaker was one.
martin j smith| 2.15.11 @ 4:18PM
Anyone who believes that BHO will change his views on anything really is a fool. There are some out there who probably among the " Moderates" or " Independents" who want to believe in Obama but his realit scares them. Never the less any grain of hope of a word ( not a deed --never ) they clutch on desperately hoping. --Thse are the people who will eventually kill the rest of us because they refuse to see the truth of who Obama is: He is a Socialist/Marxists and has learned tactics including the recruitment of "useful idiots".
John Carnal| 2.16.11 @ 11:28AM
Maybe it's time to update that old American Indian declaration "White man speak with forked tongue."
Reebok | 8.11.11 @ 3:41AM
is good
العاب بنات | 4.11.12 @ 5:10PM
thank you very nic