John Feehery: Speaking Engagements


Capitalism Under Attack

Posted on October 21, 2008



            That capitalism is on the run cannot be disputed.


            It had a good run.  For close to 30 years, since Ronald Reagan and Margaret Thatcher launched a joint attack on American/British socialism, the capitalist system brought great wealth, prosperity, productivity, and progress to both countries. 


            The Reagan/Thatcher model was so successful, it brought down communism in Russia and Eastern Europe, threatened to topple the authoritarianism in China, and even made the French think about the free-market more seriously.


            But now capitalism is being discredited.  The left has cleverly blamed the free market for the corruption that caused the housing crisis.  But that corruption was caused not by the free market, but by unholy alliance of scam artists, Congressmen, lobbyists, and shakedown artists who called themselves “community activists”.


            The housing crisis, cause by government corruption, helped spark a credit freeze that necessitated a government rescue plan.  Hank Paulson wanted a slim plan that would preserve the free market.  What he got from the Congress, after the first plan died on the House floor, was a pork-filled piece of mischief that included limits on executive compensation, and a variety of other special interest goodies. 


            The Treasury Department and the Federal Reserve, led by two men who genuinely believe in the free market, then had to turn to Europe (and the French), to get their cooperation for a further rescue.  With that cooperation came even more unhelpful strings.  French President Sarkozy predictably called for more global regulation of the free market.  Of course, France’s heavily regulated society is no model for those who want high productivity and low unemployment.  France regularly has unemployment rates that fall between 12 and 15 percent.  Americans have a panic attack when our unemployment rate goes to 6 percent.


            The American voters are making a hasty decision to scrap capitalism in this coming election.  If the latest polls are right, the country is getting ready to elect a radical liberal for President, the most liberal and least experienced President in our history.  And to help this liberal President “spread the wealth around”, the Congressional majorities will be dominated by left-wingers who will move to sharply raise taxes on corporations, investors, entrepreneurs, small business owners, and those poor suckers who happen to make some money. 


            The biggest irony is the fallacy that the federal government is the most effective job creator, the best distributor of wealth, the most compassionate deliverer of services, the most efficient spender of money, the fairest determiner of resources, and overall, just a swell institution.  The basic message of Barack Obama is that the government can solve all of our problems.


            But one thing that we learned over the last couple of years is that government is not the solution, it is the problem.  The idea that having more of a thing that doesn’t work very well is preposterous.  Does anybody remember what happened with Katrina?  Has anybody looked our public schools?  Does anybody really understand what happens when government invests our money for us? We get no return on our investment.  Just check out the return people get on their social security investment.  It is less than one percent a year.  You would be better off putting the money in your mattress.


            The market works better than government because the profit motive makes for greater productivity.  It works better because it corrects itself.  (Just look at what has happened to gas prices).  It works better because it brings about innovation, invention, and inspiration.  It works better because it promotes freedom.  It works better because it weeds out corruption. 


            We also know the market works better because it has worked better for all Americans for the last 30 years.


            Barack Obama hates the free market.  He is ideologically opposed to it.  He condemns George Bush for believing in it.  He believes the government should “spread the wealth around.” 


            And for the next two years, he and Nancy Pelosi and Harry Reid will have their chance to dismantle the free market.  Let us hope that the American people come to their senses, if not in the next two weeks, then in the several months.  The free market works.  We shouldn’t ditch it now.