Now he tells us. He's been reading Friedrich Hayek and Milton Friedman instead of playing golf and shooting hoops, as reported by the press. While no one was looking, he's been downloading podcasts of the Glenn Beck show and checking out heritage.org on his iPad. He's a born-again free-marketer, supply-sider, and friend of business large and small. That's the freely translated gist of President Obama's July 9 speech at the University of Nevada at Las Vegas.
Who would have known it? It is Obama who, as he "said in the campaign" and as he "repeated many times as President," thinks that the private sector is "the greatest generator of jobs in America." The "mess" we've gotten into is not his fault -- it's the fault of that commie-socialist George W. Bush. If Bush had cut taxes and government regulation the way Obama has been doing, we would have never have fallen into a recession to begin with.
Not so long ago, Obama declared that "greedy corporations" were the cause of all our ills. "Now is not the time for profits," he declared just after his inauguration. Now he tells us that "the private sector, not government, is, was, and always will be the source of America's economic success." So far, however, the president has taken no action to prevent the Bush tax cuts from lapsing in January 2011. Absent congressional action, marginal rates, taxes on investment, and inheritance taxes will skyrocket from current levels -- and investment taxes will increase further in 2013 to help pay for Obamacare. But based on what the president said in Las Vegas, it was George Bush who was the tax-raiser, and it is Obama himself who has cut taxes. "One of the first things we did was cut dozens of taxes ... for middle class and small business people," Obama declared. When was that? Oh, yeah -- that was the extra $80 I got off my federal withholding in 2009.
It's not just that the president is a big tax-cutter. He has also created 600,000 jobs since taking office. (It is true that he has also lost five million jobs, but no matter.) About 500,000 of those new positions are temporary census jobs that are about to go away. The others have been created with federal stimulus dollars. A lot of dollars.
How about the Smith Electric Vehicles plant in Kansas City, which Obama visited just before coming to Las Vegas? So far, Smith Electric has received $32 million in funding to build electric vehicles. It's so successful that they've hired fifty workers. (That's $640,000 per job created.) The company builds the Smith Newton, a sporty little urban vehicle with a top speed of 50 mph. Smith Electric proposes to build a lot of Newtons, many of them to be purchased by the federal government. It hasn't built too many yet, but someday it will build five hundred, or even more. And someday, millions of green jobs will sprout up like green shoots.
This is the kind of entrepreneurship Obama is talking about.
At its peak in the 1980s, General Motors produced over five million vehicles and employed 350,000 workers, none of them subsidized with government grants. GM held the top spot in global automobile production for seventy years. But in 2009, thanks in part to the Democrats' tightening of mileage standards, GM declared bankruptcy.
Not to worry: Obama has a plan to "incentivize private sector investments." But only in approved areas within the private sector.
Under Obama's state capitalism, government will employ "incentives" to control what kind of products companies produce, how they produce them (with union labor, for example), and at what price they sell them. The electric car for the masses will look a lot like a Prius, only smaller, and unlike the Prius, it will have to be recharged every fifty to one hundred miles. That is the car that Obama, champion of the free market, orders you to drive.
It's the same way with the president's clean energy manufacturing tax credits. Those credits fund 30% of start-up costs for companies like Amonix, which received $6 million to produce solar power systems. The government decides who gets the credits, and so decides what gets built and what gets sold. If you want to buy old-fashioned fossil-based electricity, you're out of luck. Obama wants you to buy solar, so buy it or shut up.
This is what the president means by the free market, and he's not the only one in the Democratic Party who wants to control markets while pretending that they are free. Apparently, it's all the Democratic members of Congress now running for reelection.
In his UNLV speech, Obama revealed that Sen. Harry Reid is actually a free marketer as well -- just as the day before he let it be known that Sen. Jean Carnahan, also in danger of losing her seat, is a big booster of the private sector. The only reason she supports climate change legislation is because she mistook the (now discredited) hockey-stick theory of global warming for the Laffer curve.
In fact, the only thing holding the private sector back, according to the president, is the "obstructionism" of those Republicans across the aisle. If they had only gone along with full-blown socialized health care, union card check, a second and third stimulus spending bill, a $50-billion tax on large banks, and cap and trade, the private sector would have been humming along just fine. What we need is more senators like Harry Reid fighting to ensure big profits for American businesses.
There was a time when "free market" meant the functioning of the private sector without the intrusion of government. Now Obama tells us that capitalism really means government control of the private sector. What Obama has espoused in Las Vegas is nothing less than state capitalism -- the same relationship between government and business that exists in every totalitarian society.
Whoever wrote Obama's speech ought to be awarded the Orwell Prize for political deception. The American people have soundly rejected Obama's brand of socialism, so why not call it something else? Call it free-market capitalism, even if it is state capitalism. Call it support for the private sector, even if it is control. Call it free enterprise, even if it is socialism.
Dr. Jeffrey Folks taught for thirty years in universities in Europe, America, and Japan. He has published many books and articles on American culture and politics.