How our crazy talk about money is endangering our economic future.

Three events this week have clearly illustrated that candidate Barack Obama's promise to "fundamentally change" America may be coming true. All of them deal with how President Obama and many of his followers choose to talk about money. This is a huge problem because if we let them get away with it without challenge, America may lose one of its greatest strengths, the dynamism of our free enterprise system.

The first was President Obama's latest rejection of the Keystone Pipeline project. The project itself would add less than 1% of the pipeline capacity of the United States according to Steven Hayward of the Pacific Research Institute. Environmental groups essentially signed off on the pipeline's safety in 2010. But President Obama, despite talking about wanting to produce jobs, put a halt to Keystone. Why? Because he is committed to "fundamentally transform" America's energy output toward "green energy."

There are two problems with this. First, despite government subsidies, green energy has proven too expensive and less available than coal, oil and gas. Secondly, shale technology and other modern techniques have opened up vast underground reserves that not only show great energy promise but are destined to produce hundreds of thousands of new jobs. America's energy future is a battle between a top down, government knows best elite who claim to know what is best, and the rest of us who understand what makes the actual world work. Economist Robert Samuelson has called Obama's decision on Keystone "insanity." So far the elites are winning. But those who want cheaper abundant energy and good-paying jobs might not let them get away with this for long.   

Secondly, we have the insane discussion of whether Mitt Romney or other rich Americans are "paying enough in taxes." Time was in America that one's tax return was private and that the only issue was whether the public official or candidate had filed them legally. Not any more. We live now in a world where wealth is evil and candidates must somehow morally justify their tax rates.

The question is no longer what money it takes to run the government but whether I am paying too little in tax compared to others. Ideologues like Obama staffer David Plouffe give speeches portraying America as a nation where government allocates economic resources in the way that seems best to those in power, while demonizing many job creators who have succeeded along the way. One of the reasons Mitt Romney and many rich Democrats pay rates in the low teens is because when the nation was in recession in 2001, Democrats and Republicans lowered rates on dividends and capital gains in order to keep money invested in business and the stock market in order to create jobs.

But this is lost on the post-modern mindset that sets Americans against each other economically for political advantage. Somehow associating wealth with shame is about as un-American as anything in our history. This must not stand.

Thirdly is the attack on private equity, which has been exacerbated by Republican candidates attacking it. The reality is that economic ignorance combined with a headlong rush to socialism is driving this debate. What is at stake? A lot. The American economy is powerful and dynamic in the sense that creative destruction occurs constantly. In a typical growing economy, many jobs are lost but many more are created. Jobs in companies that are no longer needed (see Kodak) are eliminated at the same time other enterprises flourish because of demand for their products (see Apple).

Private equity hastens this process by examining, fixing and streamlining companies to make them more profitable. Efficiency replaces inefficiency. Some jobs are lost. More are normally created if the business becomes successful.  There are no guarantees.That is the whole point of private equity. For all this, the American economy spins forward and upward as this messy but orderly process continues.

The problem now is that we are mired in a flat-lined economy. Too many people are using this to declare the system broken. It isn't. Not by a long shot. But we ourselves can break it by abandoning it and replacing it with something guaranteed to fail, a government run economy, not subject to creative destruction, that picks winners and losers and has never run a single program with high efficiency and productivity. This is the great temptation at hand. It is being stoked by President Obama, his surrogates and the Occupy Wall Streeters. They must be answered loudly and clearly in debate and at the ballot box in November 2012.

It is time for average Americans to stand up and reject these crazy ideas about money, jobs, taxes and economic growth. The free enterprise system still works and will someday create jobs and prosperity again for the vast majority of Americans, unless we abandon what made us a great nation and can make us great again.

 

Jay Haug is a free-lance writer living in Ponte Vedra Beach, Florida. You may reach him at cjcwguy@gmail.com

Three events this week have clearly illustrated that candidate Barack Obama's promise to "fundamentally change" America may be coming true. All of them deal with how President Obama and many of his followers choose to talk about money. This is a huge problem because if we let them get away with it without challenge, America may lose one of its greatest strengths, the dynamism of our free enterprise system.

The first was President Obama's latest rejection of the Keystone Pipeline project. The project itself would add less than 1% of the pipeline capacity of the United States according to Steven Hayward of the Pacific Research Institute. Environmental groups essentially signed off on the pipeline's safety in 2010. But President Obama, despite talking about wanting to produce jobs, put a halt to Keystone. Why? Because he is committed to "fundamentally transform" America's energy output toward "green energy."

There are two problems with this. First, despite government subsidies, green energy has proven too expensive and less available than coal, oil and gas. Secondly, shale technology and other modern techniques have opened up vast underground reserves that not only show great energy promise but are destined to produce hundreds of thousands of new jobs. America's energy future is a battle between a top down, government knows best elite who claim to know what is best, and the rest of us who understand what makes the actual world work. Economist Robert Samuelson has called Obama's decision on Keystone "insanity." So far the elites are winning. But those who want cheaper abundant energy and good-paying jobs might not let them get away with this for long.   

Secondly, we have the insane discussion of whether Mitt Romney or other rich Americans are "paying enough in taxes." Time was in America that one's tax return was private and that the only issue was whether the public official or candidate had filed them legally. Not any more. We live now in a world where wealth is evil and candidates must somehow morally justify their tax rates.

The question is no longer what money it takes to run the government but whether I am paying too little in tax compared to others. Ideologues like Obama staffer David Plouffe give speeches portraying America as a nation where government allocates economic resources in the way that seems best to those in power, while demonizing many job creators who have succeeded along the way. One of the reasons Mitt Romney and many rich Democrats pay rates in the low teens is because when the nation was in recession in 2001, Democrats and Republicans lowered rates on dividends and capital gains in order to keep money invested in business and the stock market in order to create jobs.

But this is lost on the post-modern mindset that sets Americans against each other economically for political advantage. Somehow associating wealth with shame is about as un-American as anything in our history. This must not stand.

Thirdly is the attack on private equity, which has been exacerbated by Republican candidates attacking it. The reality is that economic ignorance combined with a headlong rush to socialism is driving this debate. What is at stake? A lot. The American economy is powerful and dynamic in the sense that creative destruction occurs constantly. In a typical growing economy, many jobs are lost but many more are created. Jobs in companies that are no longer needed (see Kodak) are eliminated at the same time other enterprises flourish because of demand for their products (see Apple).

Private equity hastens this process by examining, fixing and streamlining companies to make them more profitable. Efficiency replaces inefficiency. Some jobs are lost. More are normally created if the business becomes successful.  There are no guarantees.That is the whole point of private equity. For all this, the American economy spins forward and upward as this messy but orderly process continues.

The problem now is that we are mired in a flat-lined economy. Too many people are using this to declare the system broken. It isn't. Not by a long shot. But we ourselves can break it by abandoning it and replacing it with something guaranteed to fail, a government run economy, not subject to creative destruction, that picks winners and losers and has never run a single program with high efficiency and productivity. This is the great temptation at hand. It is being stoked by President Obama, his surrogates and the Occupy Wall Streeters. They must be answered loudly and clearly in debate and at the ballot box in November 2012.

It is time for average Americans to stand up and reject these crazy ideas about money, jobs, taxes and economic growth. The free enterprise system still works and will someday create jobs and prosperity again for the vast majority of Americans, unless we abandon what made us a great nation and can make us great again.

 

Jay Haug is a free-lance writer living in Ponte Vedra Beach, Florida. You may reach him at cjcwguy@gmail.com

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