Economic Innovation

As job creation grinds to a halt from excessive regulation and the world economy sinks under the weight of crushing debt from ill-advised progressive schemes, the powers that be are utterly mystified by their inability to convince the business community of the new reality they have created and the utter futility of resisting this new reality. 

When under attack, one adopts a defensive posture to better resist the attack while looking for an opening to counterattack. This is true of wild animals, people, or businesses. When enough businesses go into defensive mode, the economy contracts and we suffer through a recessionary business cycle. The last two administrations have attacked business through a series of burdensome regulations such as Sarbanes-Oxley, Dodd-Frank, and the Environmental Protection Agency’s apparent desire to regulate coal-fired power plants out of existence. The Obama Administration has particularly demonized business through attacks on corporations and the wealthy to further stoke class warfare anxiety and fuel his reelection prospects. Sure, in a country of some 300 million people, there are bound to be some who skirt the law and deal less than honestly, but the vast majority of American businessmen are forthright and honest in their dealings. They provide goods and services to their customers and value their reputations as honest businessmen.

These regulations affect different businesses in different ways. Some are burdened more directly with regulatory compliance and additional paperwork, but we all suffer indirectly through additional costs to pay for this compliance. For example, EPA regulations affecting coal-fired power plants directly affect those plants through additional compliance costs, but forcing them to close affects all Americans through higher energy costs as their electricity generating capacity is replaced by higher cost alternatives. Ironically, those least able to afford higher energy prices are the ones who will suffer the most as a greater percentage of their earnings go to pay for energy. These plants have substantially improved the quality of their emissions through the installation of expensive scrubber technologies, but these additional EPA regulations impose significant costs to obtain marginal incremental gains in air quality. Their cost far outweighs their benefit.

The latest jobs report shows anemic hiring and an increase in the unemployment rate. President Obama assured us that passage of his trillion dollar stimulus package would keep unemployment below 8%, but unemployment has not been below that level since. The loss of one’s job certainly calls for retreat into a defensive posture as uncertainty forces one to curtail spending in order to ride out the period between paychecks. When Americans don’t work, then they don’t spend. Businesses don’t sell and require fewer workers, and a vicious cycle is created where one event feeds upon the other as the economy spirals into recession. When government policies exacerbate an economic recession, a depression is created. The Great Depression of the 1930s is one such example as is Japan’s Lost Decade of the 1990s. America is currently experiencing a situation similar to Japan’s Lost Decade in attempts to paper over losses and pretend nothing is wrong in the hopes that the economy will rebound and allow for repayment through flush economic times. Japan has waited for two decades for this policy to prevail with no success. Its glory days of economic superiority in the 1980s are merely a faded memory.

President Obama and his progressive brain trust misunderstand the situation because they see business through the Marxist lens of exploitation. They have never owed businesses or struggled to provide customer service at a level that ensures repeat visits. They see business as exploitative entities that must be regulated to protect a naïve populace from evil misdeeds that only serve to enrich their owners at the expense of their customers. They fail to see capitalism as the best system for raising the standard of living to its highest point in human history by providing needed goods and services at the lowest price to consumers. They fail to see government intervention in the market as the cause for market distortions that raise prices and prevent consumers from obtaining that which they desire at the lowest cost. They only know the poisonous politics of agitation, mistrust, and envy that divide segments of the population and pit one group against another. They know how to organize groups around base themes of envy and resentment, but they are incapable of uniting a diverse populace around broader themes of national unity. They sow negativity and have no capacity to emphasize the positive themes that would inspire Americans to be hopeful and positive towards the future.

Americans are tired of being told the fault lays elsewhere. We’re sick of the negativity that produces a constant drumbeat of doom and gloom. We have a positive attitude and seek inspiration. We employ a can-do attitude to get things done. We’re tired of scolds telling us what we should eat and generally interfering in our lives. We have experienced this attitude for four years only to see things get worse. We’re ready for a change. Americans consistently reiterate in polls that they overwhelmingly disapprove of the direction our country is headed. President Obama and the progressives took their best shot and drove America into the ground. Americans are dissatisfied and took the opportunity to voice their dissatisfaction in the midterm elections. We will further voice our dissatisfaction this November.

The first step in turning our economy around begins with the recognition that capitalism is the greatest economic system ever devised and its celebration as such. America was founded on the belief that hard work could lead to wealth, and this idea should be rediscovered and celebrated without shame. One who risks a great deal should be allowed to enjoy the fruits of their success without guilt from those envious souls unwilling to take a similar risk. It should finally be realized that government spending does not create wealth by stimulating an economy, but rather diverts wealth from more productive avenues through its confiscation. Governments don’t produce wealth; they take it from private citizens who do produce wealth. An economy can’t long function successfully with large segments living off the wealth of a small producer class. Case in point: Greece.

One of the legitimate functions of government is the policing of markets through regulations that ensure fair treatment where personal responsibility erodes and the unscrupulous resort to schemes that maximize short term gains over long term reputations. However, these regulations should not be so burdensome as to prevent legitimate trade or weigh so heavily as to negate a reasonable profit. A dishonest man will always find a way to circumvent laws, and when these laws become so restrictive as to not make it worth his while then no one will be conducting business of any kind. To get our economy moving again, we need a smaller government footprint which costs far less. We need to rein in government debt and pare it down to a much smaller and more manageable level. We need to ensure businesses are able to make a profit through less confiscatory taxes.

The path to economic growth is no mystery and has been successfully implemented in the past. The progressives refuse to accept this formula for economic success and continue to insist their failed policies will work if implemented on a larger scale. The problem is that there is no scale large enough, and the loss of liberty their policies entail is much more than freedom loving Americans can bear. They stubbornly cling to their Marxist ideas that have failed so many times in the past and have been rejected by so many. They refuse to admit that they are wrong and have no compunction about making others suffer to prove they are right. It is high time for Americans to finally reject the failed progressive agenda once and for all. Only a complete rejection will force more sober minded individuals across the aisle to realize the futility in pursuing a failed agenda out of step with voters.

Advertisements
This entry was posted in Economics, Government, Politics and tagged , , , , . Bookmark the permalink.

One Response to Economic Innovation

  1. GothicArc says:

    A business exists to create or add additional value to goods and services. To the extent they are able to add value while controlling the cost of adding the value, the difference is profit. A business is profitable only if it serves customers efficiently and well.
    The Obama-ites are Marxists, pure and simple. They do not understand the capitalist free-market system, nor how it created the highest standard of living Man has ever known. It works because of FREEDOM. Over-regulation, being an extreme opposite of freedom, is gradually killing the capitalist engine of prosperity.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s