Wednesday, July 24, 2013

10 Anti-Free Market Views of President Obama

This morning, President Obama delivered a speech on the economy at Knox College in Galesburg, Ill.  It is instructive to examine the speech for the many anti-free market positions that the president holds Here are 10  points the President made in the speech that indicate his confusion about economics and his anti-free market bias..

1. "In the period after World War II, a growing middle class was the engine of our prosperity. Whether you owned a company, swept its floors, or worked anywhere in between, this country offered you a basic bargain – a sense that your hard work would be rewarded with fair wages and benefits, the chance to buy a home, to save for retirement, and above all, to hand down a better life for your kids.
But over time, that engine began to stall. That bargain began to fray."

It wasn't the middle class that was the "engine of our prosperity." The middle class was the beneficiary of the prosperity, which was the result of a generally friendly environment for business operations and capital investment. Without such an environment, productivity would not have skyrocketed, which benefited the middle class.

Further, there was no "bargain" with the middle class The post-World War II period was a period of free market operators attempting things on their own, the government just stayed out of their way. The operators needed workers to fulfill their own visions and sought out  workers.

In current day America, this free market spirit has been suffocated by regulation after regulation and Obamacare is going to make it even more complex, difficult and expensive for businesses to hire the middle class. 

2. "It became harder for unions to fight for the middle class."

Unions don't fight for the middle class. They fight for things like minimum wage laws, which make it difficult for youth to get entry level positions from which they can grow into the middle class.

3.  "Washington doled out bigger tax cuts to the rich and smaller minimum wage increases for the working poor."

Minimum wages increase the number of poor, since the only thing a regulated wage, above free market wages, can do is make it unprofitable for businesses to hire the least skilled.

4. "The link between higher productivity and people’s wages and salaries was severed – the income of the top 1 percent nearly quadrupled from 1979 to 2007, while the typical family’s barely budged."

The link with productivity wasn't severed, government simply laid down laws that benefited crony capitalists and made productivity gains much more difficult. Where the free market was allowed to grow, productivity gains were spectacular. See flat screen television, smart phones, the Internet and lap top computers.

5. "Together, we saved the auto industry."

Government intervention to prop up failing businesses is not free market. A free market is a profit and loss system. Not a system where losers are bailed out by forcefully taking tax money from the general public.

6. "Together, we put in place tough new rules on big banks."

First, what is all this "together" talk? Any advocate of free markets wasn't in favor of any of these "together" interventions in the economy. Second, the banks didn't need "tough new rules" (which they are already circumventing). What is required is a banking system that is not propped up by the Federal Reserve. As long as the Fed is backer up of risky investments, banks will continue to make risky investments.

7. "We changed a tax code too skewed in favor of the wealthiest at the expense of working families, locking in tax cuts for 98 percent of Americans, and asking those at the top to pay a little more."

Oh yeah, we all got big tax cuts, while Charles Koch and George Soros are paying higher taxes. Obama should try this routine at Hollywood's Laugh Factory.

8."Today, more students are earning their degree, but soaring costs saddle them with unsustainable debt."

The unbearable college debt is the direct result of government interference in the sector. Without government backing up of student loans, colleges wouldn't be able to charge the rates they now do. If education was left to the free market, prices would be lower and education would be much more diverse and valuable.

9."That’s why reversing these trends must be Washington’s highest priority. It’s certainly my highest priority."

What the president is talking about here is more intervention in the economy, which will make matters worse, rather than tearing down the wall of regulations that are anti-free market.

10. "That’s why America has to make the investments necessary to promote long-term growth and shared prosperity. Rebuilding our manufacturing base. Educating our workforce. Upgrading our transportation and information networks. That’s what we need to be talking about. That’s what Washington needs to be focused on."

Again, the President isn't talking about free markets here. He is talking about central planning, where the government, rather than free markets direct investment. This is coercion pure and simple, via taxation of the general public, for the benefit of the crony capitalists that he pretends to attack


  1. I guess if you heard the president speaking the words would go from your ears to the cockles of your heart seeing them written they go somewhere else, perhaps in the region of the colon.

  2. Thanks for the debunking article, Robert; excellent piece.