Is the ‘War on Capitalism’ almost lost?

Become a winter warrior, vote your informed conscience, and give one team the clearest possible mandate to effect productive change, so that all may truly and fairly hope.

NEW YORK, NY, October 10, 2012-  We are entering the final stages of another national election cycle at the close of one more difficult economic year.

After four years of pursuing extraordinary fiscal and monetary policies, after eleven years at war, America is more than simply adrift.

Change has certainly come under Obama, but hope seems lost.

As we now look toward the election, three direct questions leap to mind.

Which team is more likely to create private sector jobs and protect hard-won national wealth?

 “Capitalism” is certainly not a dirty word.

Socialism is crumbling before our eyes now in Europe.

Communism has failed in every place it has been tried.

Not all capitalists are heartless, not all union leaders are noble, and not all government workers are selfless.

Modern history shows clearly that private industry is the foundation for all other activity.

No politician can protect a high-cost private sector job forever from the twin threats posed by a vast pool of low-cost, unemployed, and under-employed workers outside our country and by the brutal reality that relentless technological advances are engineering human workers out of the equation everywhere.

And few politicians in either party will admit one bold truth—no government that cherishes and protects freedom can exist for long without a steady supply of funds from a thriving private sector.

Yes, nations can run down their accumulated wealth to feed populist impulses. But profligate nations that spend more than they earn while destroying private industry, eventually distribute only two things equally—poverty and attendant misery.

Should America embrace insular “crony capitalists” or world-beating entrepreneurs?

As this nation found her feet leading the free world, President Dwight D. Eisenhower issued an astute warning in 1960:

“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous use of misplaced power exists and will persist.”

The blurred line today is not simply between the defense department and arms’ producers—though this nexus remains problematic.

A different and far more dangerous cabal has emerged since 1960—the “financial-political” complex.

American taxpayers, since 2008, have actually coddled poorly managed multi-national concerns for fear that letting them fail will bring down the global system and America with it.

This is toxic and tortured logic so bitter that it rightly inflames progressives, conservatives, and independents.

Yet, even now, the true reasons America approached the precipice, teetering close to a fall, have still not been revealed. No culprits have been challenged and many likely malefactors remain in positions of great power and influence.

Of all people, Prime Minister Vladimir Putin gave the clearest recent warning in 2009, and his words then are worth heeding now:

“In the 20th century, the Soviet Union made the state’s role absolute. In the long run, this made the economy totally uncompetitive. This lesson cost us dearly. I am sure that nobody wants to see it repeated.

Nor should we turn a blind eye to the fact the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions is being eroded in recent months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.

And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macro-economic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing.”

Little positive change has occurred in the board-rooms and management offices of large companies that sought and received unprecedented amounts of financial assistance starting in September 2008.

Even less attention has been placed upon the accounting standards, reported financial results and governance practices of the Federal Reserve System and other large Central Banks that wield profound influence.

Across America, many patient and persistent citizens relentlessly pursue their dreams far removed from government safety nets. When they lose, they nurse their wounds and learn expensive lessons. When they win, some earn enormous wealth.

Global industries yield out-sized benefits to participants. Few begrudge sports and entertainment stars their winnings for serving world-wide appetites with momentary pleasures. Yet, for some reason, entrepreneurs who manufacture better widgets or provide novel services are, in some cases, shunned and even hounded by elites in government and in the media.

America must offer solid platforms in each state and in every single community for any bold soul who wishes to serve vibrant global markets.

Replace the “War on Capitalism” with a “War on K-Street”!

Which candidate is more likely to advance the interests of our rising youth against global peers while also discharging the debts owed to our worthy senior citizens?

The starkest contest already sown inside our nation is surely the most surprising and un-natural.

Our country has not yet fully contended with a rising generation that feels, correctly, that her elders have quenched the American dream.

How can we explain the trajectory from 1999 forward, when America has been reaping the seeds of our own destruction by lowering our standards and cheapening our currency?

Excellence matters across the board, whether in education or in delivering investment returns. Forget holding American students to a curve based upon national results. Our students should compete and win against the best students on the planet and our teachers and their bosses should be held to the strictest possible account.

Americans of all political persuasions have meekly assented to donning and then tightening straight jackets that will limit all of our realistic options just as surely as custom-tailored versions have done in Ireland, Greece, Portugal, Spain, France, and Japan.

Why are the most experienced leaders among us rushing down a ruinous path that must choke off prospects for all of us even as it assuages some pain in the present?

America can never hope to win a race to the bottom in lowering compensation at home to world scale or below. However, we can design a strategy embracing capital and wealth that wishes to find a secure home. This strategy must cast off decades of theory that “Europe knows best” and that America only thrives if Europe and Japan remain yoked to business models for government that are badly broken: excessive debt and persistent deficits.

Why should capital rush to Ireland, to Singapore and to various islands when we could so easily welcome it here to our manifest common benefit?

On economic policy, Americans would be wisest to shun acolytes of command approaches in industrial and in public policy.

Instead, we should actually follow Prime Minister Putin’s prescient advice and set about dismantling excesses and obstacles to true progress created by the bloated public sector here that spends more than $ 100 billion per week (federal, state and local governments combined) without heeding a vital precept so useful in the practice of medicine: “First, do no harm”.

In America, we have already come a very long way. Perhaps our path forward is guided by one last example.

At the start of winter, in 1776, Thomas Paine noted:

“The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as freedom should not be highly rated.”

Make no mistake—excessive debt is tyranny worse than that imposed on American colonies by dread King George III. 

The road to “more for most” is certainly not paved with debt and other obligations manufactured in cloistered rooms, outside of full view, by self-important, professorial bureaucrats.

Whatever your views, in this election let us call out all of our reserves.

Become a winter warrior, vote your informed conscience, and give one team the clearest possible mandate to effect productive change, so that all may truly and fairly hope.

 

 


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Charles Ortel

Charles Ortel became a lapsed member of the silent majority in August 2007 when he began alerting the public to dangers posed by structural changes in the global economy. Since then, Charles has appeared in the print, radio and television media with increasing frequency. Brass Tacks will attempt to offer non-partisan perspective on factors contributing to the unresolved, burgeoning crisis and discuss potential solutions. Graduated from Horace Mann School, Yale College and Harvard Business School, Charles tries to learn each day.  

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