In November of this year we are going to be faced with a stark choice. We will be asked to vote for a new President who will be the most powerful person in the world for the next four to eight years. What does that mean for the American economy?
The Democratic nominee will either be Senator Obama, or Senator Clinton. Both these candidates, like the party they represent, believe in socialism. The party of Jefferson, or of Jackson, became the party of command economies decades ago when they enthusiastically embraced the New Deal and the Great Society. Both believe that more government is the answer, that the money of the American people belongs to the treasury, and not to their bank accounts. That the American people need big government to guide them through life. They want higher taxes, more government spending, universal health care, price controls, and any other half baked socialistic idea they can come up with.
Not that the GOP is a whole lot better. Half baked tax schemes like the fair tax are increasingly popular, and protectionism is the demand. We have candidates who would impose tarrifs and restrict trade with foreign nations, candidates who go around the rust belt, promising that if they are elected no more of the heavy industry jobs will be lost. That the resources of the government will be invested into helping them develop new technologies and help them remain competitive.
Silly me, I thought that it was the companies job to remain competitive, that it was the job of private industry to remain innovative. A business that needs to cling to the government for protection has lost the ability to compete, and that means they don't deserve to be in business. Capitalism is competitive, it is the survival of the fittest. New, and better products replace old ones. New technologies replace old technologies, new ways of working replace obsolete ways of working. That's what people don't like about Capitalism. They want all the benefits, all the innovations, the new products, and the ability to fill demand without any of the side effects. It's never fun when people lose their jobs. But does this mean that we should stop innovation to prevent those jobs from being phased out. Should we have never invented the automobile to protect the people who made buggies for horses? Should we have never updated our telecommunications technology to keep the thousands of operators in business? Most people would say of course not. Those jobs were obsolete and needed to go.
If we won't protect old technologies why should we protect industries that can't survive? If consumers choose to buy foreign made cars of American made cars that's their choice. If Ford wants to survive let if come up with a car people want to buy, let them actually be able to compete with their competitors.
What neither party understands is that economics is a science. It's as much a science as chemistry, or astronomy. Those sciences have laws that govern them and can't be changed. Economics is the same way. When governments try to manipulate the laws of supply and demand nothing good comes of it. Capitalism, for all the shocks and downturns, is still the best economic system because it's the only free economic system. The communist economies create chronic shortages, and often lead to starvation. The socialist economies of Europe are stagnant. It's no accident that it's the capitalist economies, with the U.S. leading the way, are the most vibrant and the most innovative.
It would be nice if our candidates could remember that.
