Obama and the Failure of Capitalism

Robert Ringer

Oops! The presidential pretender went and did it again. A lot of red ink has passed over the socialist dam since he unthinkingly told Joe the Plumber that he wants to “spread the wealth around.”

Or since he told Charlie Gibson that “It’s a matter of fairness” when Gibson repeatedly asked him to explain why he would want to raise the capital-gains tax when the historical evidence proves that higher capital-gains taxes actually decrease government revenues.

Of course, there have been endless not-so-subtle clues as to Obama’s impeccable collectivist credentials since then, but, on the whole, he tends to choose his words carefully so as not to awaken the sleeping frogs. One must always be mindful not to let the water get too hot.

But last week Obama let it all hang out in a speech at a Kansas high school when he said, “[T]here is a certain crowd in Washington who, for the last few decades, have said, ‘Let’s respond to this economic challenge with the same old tune. The market will take care of everything,’ they tell us. If we just cut more regulations and cut more taxes — especially for the wealthy — our economy will grow stronger.”

Moving in for the kill, he went on to say, “And that theory fits well on a bumper sticker. But here’s the problem: It doesn’t work. It has never worked. … I mean, understand, it’s not as if we haven’t tried this theory. We simply cannot return to this brand of you’re-on-your-own economics if we’re serious about rebuilding the middle class in this country.”

That’s right, folks, capitalism had nothing to do with the United States becoming the most prosperous country in the history of the world. It had nothing to do with millions of ambitious people starting with nothing and becoming millionaires and even billionaires. And it has nothing to do with the fact that “poor people” (as defined by the Census Bureau) in the U.S. live better than middle-class people in most other countries.

When Obama says that cutting taxes and regulations doesn’t work, who in the world is he talking about? Everything works. The question is, for whom does it work, and how well? Collectivism works exceedingly well for politicians whose chief objective is to stay in office, but it destroys the lives of millions of people on the dole who might otherwise become productive citizens.

True to his favorite tactic of turning the facts upside down, when Obama says “it’s not as if we haven’t tried this theory,” it sounds as though he’s referring to communism rather than capitalism. Communism has been tried throughout the world — from Cuba to Russia, from North Korea to China — and it’s worked wonderful for guys with names like Castro, Stalin, Kim Jong Il, and Mao. But for the masses it has consistently delivered poverty, loss of freedom, and death.

Capitalism, on the other hand, has worked for the masses — whenever and wherever it has been tried. Even in its impure state (i.e., not laissez faire) it has delivered spectacular wealth and a high standard of living to all those who are willing to work.

“You’re on your own economics” is a cute catchphrase — the kind of dismissive ridicule the left loves to employ — but the truth is that being “on your own” is a good thing. When the government leaves people alone, it makes it easier for them to innovate and create wealth. And when wealth is created, it accrues to everyone’s benefit, whether it is reinvested, spent on goods and services, or saved (which adds to capital formation and, in turn, spurs economic growth and job creation).

But what about those who are truly unable to care for themselves; e.g., quadriplegics, the blind, and the mentally ill? What would happen to them in a truly free society? Fortunately, the Western way of life is based on a code of ethics and morality that motivates Americans, in particular, to be remarkably charitable.

No civilized person wants to see those who are seriously health challenged or mentally challenged suffer, so the question is not whether or not such people should be helped. The question is, who is best equipped to help them — politicians, whose chief aim is to perpetuate their own power, or free individuals, who have a genuine desire to be charitable to those who are incapable of fending for themselves?

If the scam of politicians taking from those who produce and giving the stolen loot to those whom they deem to be “in need” worked, the poverty rate would not be about the same today (14.3 percent) as it was when the Great Society was launched back in 1965. What Lyndon Johnson’s “generosity” proved is that it doesn’t matter how much of other people’s money you give away, it does nothing to lift people up. The hard evidence shows that it is government’s redistribution-of-wealth policies that have not worked.

The far left has succeeded in perpetuating a cult of dependency that keeps career criminals like Chuck Schumer, Barney Frank, Chris Dodd, Nancy Pelosi, and Harry Reid in power. And, unfortunately, those who claim to be in favor of capitalism — primarily Republican career politicians — have consistently gone along with welfare programs that have bankrupted the country and stripped millions of people of the motivation to tap into their true potential and better their lives.

If one assumes that a community organizing ne’er-do-well like Barack Obama — who has never built anything in his life — sincerely wants to help the middle class, he would have to simultaneously believe that he’s an ignoramus.

How does increasing America’s debt by $4 billion a day help the poor?
How do more than 40,000 pages of tax regulations — regulations that take time and money away from job creators — help the poor?
How does an $800 billion “stimulus bill” — which turned out to be nothing more than a wish list of political pork — help the poor?
How do regulations that prevent oil drilling and coal mining — activities that could create a massive number of jobs and reduce our dependency on foreign oil — help the poor?
How does destroying the housing market through government-created failures like Fannie Mae and Freddie Mac help the poor?

Yes, we do need to be on our own. More regulation is the last thing in the world we need. The greatest regulator is, and always has been, the marketplace. Those of us who have engaged in entrepreneurship know that the marketplace is a brutal, unforgiving regulator. But how in the world can you expect a community organizer to know that when he’s never started or operated a business? You have to experience the brutality of the marketplace, firsthand, in order to appreciate just how well it works.

Maybe Obama and his supposedly sincere leftist pals should study Galveston, Texas and try to understand why opting out of the Social Security system has worked so well for its citizens. Or why job-creating companies are stampeding out of anti-business, high-tax states like New York and California and escaping to business-friendly states such as Nevada, Florida, and Texas that have no state income taxes.

The truth is that, throughout history, the vile left has never been interested in lifting people up. Instead of focusing on income inequality, their focus should be on setting people free — to be on their own! — to go as far as their talents and hard work will take them.

Sorry, Barack, but your socialist and communist mentors — from papa Obama to Frank Marshall Davis, from Saul Alinsky to Jeremiah Wright — had it all wrong. It is collectivism, in all its ugly incarnations, that doesn’t work. So-called trickle-down economics, on the other hand, does work — and always will. It’s built into the system.

Barack Obama would do well to listen to a once starry-eyed collectivist named Bill Clinton, who recently said, in an interview with Newsmax’s Chris Ruddy, “We don’t have a lot of resentment against people who are successful. We kind of like it, Americans do. It’s one of our best characteristics. If we think someone earned their money, we do not resent their success. That’s why there’s been very little class conflict in American history.”

We’re less than a year away from finding out who is right in his assessment of the average American — Barack Obama or Bill Clinton.


You have permission to reprint this article so long as you place the following wording at the end of the article:

Copyright © 2011 Robert Ringer
ROBERT RINGER is a New York Times #1 bestselling author and host of the highly acclaimed Liberty Education Interview Series, which features interviews with top political, economic, and social leaders. He has appeared on Fox News, Fox Business, The Tonight Show, Today, The Dennis Miller Show, Good Morning America, The Lars Larson Show, ABC Nightline, and The Charlie Rose Show, and has been the subject of feature articles in such major publications as Time, People, The Wall Street Journal, Fortune, Barron's, and The New York Times.