Obama Creates State-Controlled Economy

When then-candidate Barack Obama declared, "We are five days away from fundamentally transforming the United States of America," the majority of Americans were unaware of what he truly meant. Today it is quite apparent. This administration, along with House Leader Nancy Pelosi and Senate Majority Leader Harry Reid, has moved quickly to transform the American free-enterprise system into a state-controlled economy.

President Obama professes his support for the free-enterprise system but continues to advance the argument that our economic problems are in large part caused by the failure of capitalism. In his view, capitalism inspires and rewards greed and benefits the rich at the expense of the poor. He has said on numerous occasions that to achieve social justice, we must redistribute wealth.
Obama, Pelosi and Reid, along with other members of Congress, argue that capitalism is a zero-sum game, which, according to Webster’s definition, is "a situation in which a gain by one side entails a corresponding loss for the other side." This argument fits nicely into Obama’s call for the redistribution of wealth and increased government intervention in regulation of the private sector.

The truth is that capitalism has worked brilliantly and is the envy of the world. It has provided our nation with a higher standard of living for more citizens than any other system on earth. It is the economic system that made America a world leader and provides us with the ability to protect and secure our nation from oppression.

Capitalism is not based on greed and is not a zero-sum game. By definition, capitalism is "an economic system characterized by PRIVATE or CORPORATE OWNERSHIP of capital goods; by investments that are determined by PRIVATE DECISION; and prices, production and the distribution of goods that are determined mainly by COMPETITION in a FREE market."

What it boils down to: Your ability to succeed in the free market (consumer driven) is predicated on your ability to fund your idea (capital) and produce and distribute a product or a service that people freely chose based on need or want. If you fail, you will lose your capital (money); if you succeed, the rewards (money) are significant.

The free market keeps business honest. It is the consumer who determines the winners and losers, not government or the business itself. This is the basic principle of capitalism. It rewards good behavior and punishes bad behavior. It is precisely these checks and balances that protect us from despicable people like Bernie Madoff and Kenneth Lay.

Critics miss the point when they argue that capitalists like Madoff and Lay serve as confirmation that capitalism is driven by greed to benefit few at the expense of many. I would argue that they are perfect examples of how brilliantly the system works. Madoff and Lay failed because they attempted to cheat capitalism by operating outside the system’s rules. They weren’t capitalists, they were thieves. That is an argument for getting rid of them – not the system.

Capitalism has not failed the United States; our government has failed capitalism. This was never more evident than when President George W. Bush announced to America that he had "abandoned free-market principles to save the free-market system."

Notice how politicians never blame government for the problem. What Bush should have said was, "I am going to suspend government so that the free-enterprise system can save government."

At the very heart of the financial meltdown is the government. In truth, it was government that drove subprime mortgage lending (Fannie Mae and Freddie Mac) and caused the massive disruption in the financial markets. Again, the free-enterprise system didn’t fail; it was government that disrupted the system, encouraging – and in some cases forcing – financial markets to operate outside of sound financial practices and basic principles of the free-market economy.

Under Obama’s "too big to fail" theory, the government disrupted the free market yet again by rewarding bad behavior with more money (bailouts) for Wall Street. When it failed, he blamed the "greed" of capitalism for the entire mess and now demands more government intervention and oversight of the private market.

The policies of Obama, Pelosi and Reid have transformed the American economic system. They have slowed the American economy, increased unemployment and poverty levels, and have dramatically increased the massive debt owed to foreign interests. In the first 19 months of the Obama administration, the federal debt held by the public increased by $2.5260 trillion, which is more than the cumulative total of the national debt amassed under all U.S. presidents from George Washington through Ronald Reagan.

This fundamental transformation has disastrous and significant implications for our country and our standard of living – both today and for generations to come. Ronald Reagan got it right: "The government is not the solution to our problems; government is the problem."

Ralph Pontillo
President
Manufacturer & Business Association