The Recipe for Government Soup

The way to make America prosperous again is to produce more than we consume. It's that simple. There is no Secret Recipe DF8GVEXEW35G that awaits discovery by some government economist; no production function that will right our economy by adjusting the inflection points and certainly no gimmick from the Federal Reserve Chairman that will fool the market.

We simply have to produce more than we consume. It's what we capitalists call "creating wealth". It's something the current administration has forgotten: Before one can redistribute wealth, wealth must be created. Progressives often forget that simple fact.

Image via Wikipedia

The problem for the Obama Administration is that government cannot create wealth. Individuals create wealth. Government can confiscate the wealth of individuals through taxes and fees, but it cannot make wealth.

Some of you may object and point out that with the assistance of the Federal Reserve System, the federal government prints money. You would be correct; it does print money, but money is not wealth.

Money can do many things such as act as a medium of exchange, and it can even be a tool for storing value, but printing money only reduces the value of each individual piece of money in existence. It does not create wealth. In fact, if you use money as a store of value and the government prints more money, then your money lost value.

In Defense of Capitalism

I hate to tell the Occupy Wall Street group (OWS) this, but not only do they not understand capitalism, they aren’t even the trendsetters of anti-capitalism. For years, American culture and tax policy has been at odds with the values of capitalism. It’s a pity, but it’s true and one can trace the majority of our current economic problems to that fact.

Wall Street, 1867
Image via Wikipedia

The basis of capitalism is self-denial; the intentional delay of gratification for the chance of a greater reward later. If you think this is still the core of our country’s values, then you haven’t been paying attention.

In order to generate capital, individuals have to consume fewer resources than they have available, meaning that they save rather than consume. Then those individuals must be willing to risk those savings to acquire the tools necessary to provide desired goods. If the individuals make poor decisions, or as our Commander-in-Chief calls them “bets”, then they will lose their investments. This means that their sacrifices were in vain, except for some new knowledge of what fails.

Capitalism is what people do when left alone. Anything other than capitalism is because of a government that restricts what people freely do. Even simple barter requires a saving of resources and an investment to obtain other goods. Simple farming was also capitalism long before tractors and center-pivot irrigation systems. Early farmers sacrificed the consumption of seeds in order to invest them in next year’s crop.

Is capitalism good? It rewards innovation and efficiency. It creates job opportunities and allows families to

When You Wish Upon a Star

President Barack Obama is about to define himself with his first state of the union address. I don't mean politically. We know that President Obama likes big government. In fact, we know that he prefers the machinations of the government over the deliberations of the citizens. By anyone's reasonable definition, Barack Obama is a Progressive.

Barack Obama is about to define himself in a fundamentally more important way, in terms of his ability to be honest with the American people. Will he address real issues in a meaningful way, offering solutions that are most likely to work? Or will he cherry pick issues, and frame those in ways that fit his philosophy of government intervention, more spending and less individual freedom?

Will Obama take responsibility for his own mistakes or will he continue to blame predecessor George W. Bush? Tellingly, within the last few days, Obama has referred to “the last eight years” negatively; conveniently forgetting that the last of those years was the first year of the Obama Administration. President Obama continues to blame the now-retired George W. Bush, who is probably not simply retired but would be best described as “happily retired.”

I would like to see Obama meaningfully address unemployment, the housing market, homeland security, government bailouts of private industries, health care reform and the lack of promised transparency surrounding health care reform. I'd like to see him do so with candor and honesty, parceling out blame and credit fairly and honestly. I fully expect to be disappointed.