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For most of his time as a national political figure,
Barack Obama has been careful to cloak his core socialist leanings behind a
veil of pro-capitalist rhetoric. This makes strategic sense, as Americans
still largely identify as pro-capitalist. However, based on his recent speech
in Osawatomie, Kansas, the President appears to have reassessed the political
landscape in advance of the 2012 elections. Based on the growth of the Occupy
Wall Street movement, and the recent defeat of Republicans in special
elections, he has perhaps sensed a surge of left-leaning sentiment; and, as a
result, he finally dropped the pretense.
According to our President's new view of history, capitalism is a theory that
has "never worked." He argues that its appeal can't be justified by
results, but its popularity is based on Americans' preference for an economic
ideology that "fits well on a bumper sticker." He feels that
capitalism speaks to the flaws in the American DNA, those deeply rooted
creation myths that elevate the achievements of individuals and cast
unwarranted skepticism on the benefits of government. He argues that this
pre-disposition has been exploited by the rich to popularize policies that
benefit themselves at the expense of the poor and middle class.
But Obama's knowledge of history is limited to what is written on his
teleprompter. And his selection of the same location that Teddy Roosevelt
used to chart an abrupt departure into populist politics is deeply symbolic
in the opposite way to that which he intended. It is not by some genetic
fluke that Americans distrust government. It is an integral and essential
part of our heritage. The United States was founded by people who distrusted
government intensely and was subsequently settled, over successive
generations, by people fleeing the ravages of government oppression. These
Americans relied on capitalism to quickly build the greatest economic power
the world had ever seen - from nothing.
But according to Obama's revisionist version of American history, we tried
capitalism only briefly during our history. First, during the Robber Barron
period of the late 19th Century, the result of which was child labor and
unprecedented lower-class poverty. These ravages were supposedly only
corrected by the progressive policies of Teddy Roosevelt and Woodrow Wilson.
We tried capitalism again in the 1920s, according to Obama, and the result
was the Great Depression. This time, it allegedly took FDR's New Deal to finally
slay that capitalist monster. Then, the account only gets more farcical.
Apparently, we tried capitalism again under George W. Bush, and the result
was the housing bubble, financial crisis, and ensuing Great Recession. Obama
now argues that government is needed once again to save the day.
This view is complete fiction and proves that Obama is not qualified to teach
elementary school civics, let alone serve as President of the United States.
I wonder what other economic system he believes we followed prior to the
1890s and 1920s (and during the 1950s and 1960s) that that
he now seeks to restore? Capitalism did not start with J.P. Morgan in
1890s or John D. Rockefeller in the 1920s as the President suggests. In fact,
it was about that time that capitalism came under attack by the progressives.
We were born and prospered under capitalism. The Great Depression did not
result from unbridled capitalism, but from the monetary policy of the newly
created Federal Reserve and the interventionist economic policies of both
Hoover and Roosevelt - policies that were decidedly un-capitalist.
The prosperity enjoyed during mid-20th century actually resulted from the
incredible progress produced by years of capitalism. Contrary to Obama's
belief, the New Deal and Great Society did not create the middle class; it
was, in fact, a direct result of the capitalist industrial revolution. The
socialist programs of which Obama is so fond are the reasons why the middle
class has been shrinking. America's economic descent began in the 1960s, when
we abandoned capitalism in favor of a mixed economy. By mixing capitalism
with socialism, we undermined economic growth, and reversed much of the
progress years of laissez-faire had bestowed on average Americans. The back
of the middle class is being broken by the weight of government and the
enormous burden taxes and regulation place on the economy.
America's first experiment with socialism, the Plymouth Bay Colony, ended in
failure, and our most successful colonies - New York, Virginia, Massachusetts
- were begun primarily as commercial enterprises. When the founding fathers
gathered to write the Constitution, they represented capitalist states and
granted the federal government severely limited powers.
Apparently, Obama thinks our founders' mistrust of government was delusional,
and that we were fortunate that far wiser groups of leaders eventually
corrected those mistakes. The danger, as Obama sees it, is that some
Republicans actually want to reverse course and adopt the failed ideas espoused
by great American fools like George Washington, Thomas Jefferson, John Adams,
and Benjamin Franklin.
The President unknowingly illustrated his own contradictory thinking with the
importance he now places on extending the temporary payroll tax cuts. If all
that stands between middle-class families and abject poverty is a small tax
cut, imagine how much damage the far more massive existing tax burden already
inflicts on those very households! If Obama really wants to relieve
middle-class taxpayers of this burden, he needs to reduce the cost of
government by cutting spending. After all, there is no way to pay for all the
government programs Obama wants by simply by taxing the rich.
History has proven time-and-again that capitalism works and socialism does
not. Taking money from the rich and redistributing it to the poor does not
grow the economy. On the contrary, it reduces the incentives of both parties.
It lowers savings, destroys capital, limits economic growth, and lowers
living standards. Maybe Obama should take his eyes off the teleprompter long
enough to read some American history. In fact, he could start by reading the
Constitution that he swore an oath to uphold.
Peter Schiff is CEO of Euro Pacific Precious
Metals, a gold and silver dealer selling reputable, well-known bullion coins
and bars at competitive prices. To learn more, please visit www.europacmetals.com or call
(888) GOLD-160.
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