Barack Obama today accused Mitt Romney of offering outdated ideas to the country. On the contrary, it is Obama who holds the outdated beliefs who created the policies that are responsible for the anemic, practically non-existent, economic recovery from which the United States is suffering. The extreme form of these ideas has been tried and failed in Moscow, Beijing, Havana and currently Caracas. Indeed, their utter failure has been such that both Moscow and Beijing all but abandoned them years ago. Gentler forms of these ideas have also been tried in Lisbon, Madrid, Buenos Aires, Mexico City, Rome and Athens. As Senator Marco Rubio said Thursday night, Obama’s ideas are the ones from which immigrants come to America to escape. In other words, they seek the opportunities that freedom and free enterprise offer.
Mr. Obama has spent better than $12 billion dollars (half of which he borrowed) to try to create a new America. These expenditures are the modern-day equivalent of the Stalinist five-year plans of the 1930s. They failed then and are failing again. They merely grow the bureaucrats who with few exceptions do not create goods and services that people want to buy. The president’s useless stimulus plan which funneled money to cronies and pie-in-the-sky utopian projects is a good example.
Another longer lasting and ultimately more calamitous example is Obamacare, which when it becomes fully operational will replace an important part of our economy with government workers, political boards and public corporations whose costs cannot be controlled and where innovation will be slow or nonexistent. It will be the Post Office competing against UPS and FedEx. Only that people can bypass the Post Office and use FedEx; however, under Obamacare, most people will be forced to use government healthcare because they won’t be able to afford private healthcare. So maybe a better comparison is public education, which created public schools for the many and left private schools for the few. Currently, we have the best healthcare in the world, but according to most surveys, we have the worse schools (in the western world at least).
Certainly, government can provide assistance to people in bad times to help mitigate the effects of an economic depression. Transfer payments can prime the pump to use FDR’s famous metaphor, but they cannot replace the pump. Government can never match entrepreneurs seeking profit when it comes to their efficient use of private investment or their deployment of human resources, their work ethic and continual innovation. Only entrepreneurs can create the goods and services that feed the market to create the wealth that increases the standard of living. Governments can merely coerce people to accept grudgingly the services they provide but consumers eagerly embrace the goods and services they can choose freely. And entrepreneurs in competition constantly refine and create new goods and services for them.
Government has a role in play in markets. It can level the playing field, break up monopolies, provide positive externalities (the roads and bridges that Mr. Obama confuses with entrepreneurs who build a business), and help remove negative ones. But for the past 4 years, government has been the problem and the solution we need right now is a return to Reaganomics and his policies of growth. Alas, it appears we shall have to get a new president who isn’t under the spell of outdated ideas.