The election: Obama and anger

A lot of pundits are commenting on the anger in American political discourse. Here's my view of the reason. Since its founding, the United States has been the beacon of personal freedom and wealth. The major reason, often ignored in the current political debate, is our capitalist organization. We are free to use resources to produce goods and services in a competitive environment, and competition means efficiency—a larger pie of goods and services for distribution. Capitalism has favorable welfare implications: the pie has been distributed so that the poorest among us are far richer than most people in other parts of the world. Capitalism also implies personal freedom, which can be defined as the right to own resources and dispose of them as they see fit without hurting others. Milton Friedman pointed out the link many years ago in his book "Capitalism and Freedom."

The Obama Administration, however, is making a fundamental shift away from capitalist organization. Its general approach to problems of the domestic economy, even in this period of recession and high unemployment, involves transferring control of resources from the private to the government sector through increased regulation, spending and taxes. Just think of healthcare, one-sixth of our economy. The private sector is regarded as the problem, not the solution to economic health. The inevitable effect is destroying personal incentives for producing wealth. Witness the fact that current business managers are now holding back on committing large financial reserves to hiring labor because of the thrust of current fiscal policy. It seems that the government is unaware that its basic policy will directly frustrate the goal of income redistribution that Obama advocated during his campaign and pursued in governance. We may end up with more equal sharing of the pie of national income, but a far smaller pie for redistribution.

What should be of major concern,however—to rich and poor, young and old—is the loss of personal freedom. Central power vested in government stands in direct opposition to the distributed power of individuals under capitalism. Returning to the topic of this post, the Administration’s threat to individual freedom and wealth is a principal source of the heightened concern (anger) many are feeling as this election approaches.

Obama Transportation "Strategic Plan"

Here's a citation for a critique of Obama's transportation "Strategic Plan," which appeared recently in "The American" at http://www.american.com/archive/2010/june-2010/menace-to-mobility

G-20 Tilt Toward Cutting Government Spending

The June 30, 2010 New York Times comments in this fashion on the resolution by G-20 nations to cut massive government spending: "Hoping that history doesn’t repeat itself, the world’s rich countries are betting that the private sector can make up for withdrawn stimulus spending." The implication that both are ways of stimulating growth and that history favors spending is wrong. It's true that the Administration's reliance on spending is due partly to the fact that government spending for WWII took us out of the Great Depression. However, the spending was direct infusion of money into the private sector to make tanks, planes and guns, which directly led to greatly increased employment and production. This was far different than the sprinkling of money here and there involved in the recent stimulus. History shows that removing constraints on the private sector through reducing business taxes is another way to directly stimulate production.

Obama's Policies and the Loss of Personal Freedom

According to the June 22 New York Times, "President Obama warned insurance executives on Tuesday not to use the law 'as an opportunity to enact unjustifiable rate increases'". So the President reserves the right to declare insurance price rises unjustifiable and use the weight of the U.S. government to prohibit them. By such steps we see the replacement of capitalism by socialism. And as Milton Freedman recognized in "Capitalism and Freedom," the effect goes beyond how the economy is organized. Personal freedom is the ultimate threat. And do not think that Obama's effort to control insurance prices is a special case. If he succeeds in carrying it off, the lesson will not be lost on him.

Obama's Ethics and Policy

Colbert King, writing on a recent Washington Post OpEd page (June 19, 2010) complains that Obama, a decent husband and father, is constantly attacked by conservatives whose personal lives are a mess. Limbaugh is on his fourth wife; Gingrich is on number three; and Palin's sister-in-law and former prospective son-in-law have both been sentenced for crimes relating to drugs. "Limbaugh, Gingrich and Palin have the unmitigated gall to look down their noses at our president."

Only one problem. Whereas the ethics issues are personal, Obama is criticized solely for mishandling public policy. A more egregious lapse of clear thinking you couldn't find.