This continues the analysis of the latest agitprop by our Marxist-In-Chief (see part 1 ).
[Obama] And their philosophy is simple: We are better off when everybody is left to fend for themselves and play by their own rules.
Of course, none of his opponents think that. It rather shows again how little he regards the American people. He implies that without government coercion, we would not help our fellow man. Yet Americans have amply shown that they are the most generous people in the world. And they were even more involved in charity before leftist governments crowded out private charities, as I documented in a previous Patriot column The Left vs the Poor.
This has been far worse, since typically 90% of private charitable donations actually get to the needy people, while only about 25% of taxpayer-funded government programs do. Most of it is swallowed up by the bloated government welfare bureaucracies. In sum, Patriots believe it is noble to help our fellow man with our own money, but wicked to help them with other people’s money taken by force.
Then Obama channelled the first RINO president, Teddy Roosevelt:
[Obama] “At the turn of the last century, when a nation of farmers was transitioning to become the world’s industrial giant, we had to decide: Would we settle for a country where most of the new railroads and factories were being controlled by a few giant monopolies that kept prices high and wages low?”
But economist (and Patriot columnist) Dr Thomas Sowell explained five years ago in Bully Boy Theodore “Teddy” Roosevelt:
“Monopolies are much harder to find in the real world than in the world of political rhetoric. Monopolies raise prices but, in the big industries supposedly dominated by monopolies—oil, steel, railroads—prices were falling for years before Theodore Roosevelt entered the White House and started saving the country from ‘monopoly’.
“The average price of steel rails fell from $68 to $32 before TR became president. Standard Oil, the most hated of the ‘monopolies’, had in fact innumerable competitors and its oil prices were not only lower than those of most of its competitors, but was also falling over the years. It was much the same story in other industries called ‘monopolies’.
“The anti-trust laws which Theodore Roosevelt so fiercely applied did not protect consumers from high prices. They protected high-cost producers from being driven out of business by lower cost producers. That has largely remained true in the many years since TR was president.”
This is backed up by as economic historian Burt Folsom in his book The Myth of the Robber Barons: A New Look at the Rise of Big Business in America. The great “market entrepreneurs” never robbed anyone. Rather, they made many goods available to millions of Americans. The true robbers were the “political entrepreneurs, who colluded with government to gain unfair advantage—but often still went bankrupt, much like the Solyndra scam under Obama’s reign.
Twisting American history
Then comes the biggest lie of all, describing the free market as “the same old tune”:
[Obama] “The market will take care of everything,” they tell us. If we just cut more regulations and cut more taxes—especially for the wealthy—our economy will grow stronger. Sure, they say, there will be winners and losers. But if the winners do really well, then jobs and prosperity will eventually trickle down to everybody else. …
Now, it’s a simple theory. … But here’s the problem: It doesn’t work. It has never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible postwar booms of the 50s and 60s. And it didn’t work when we tried it during the last decade. I mean, understand, it’s not as if we haven’t tried this theory.”
What a mixture of truths and outright mendacity! Yes, we have tried this theory, including in the decade before the Great Depression. But contrary to Obama, it worked! For example, as I showed in my column on President Coolidge, he and President Harding faced a severe depression after WW1, with 11.7% unemployment and a top marginal tax rate of 73%. But they radically slashed taxes and spending, i.e. “tried this theory”. Yes, it worked brilliantly: American debt was slashed, unemployment plummeted to 2.4%, and entrepreneurs produced many new inventions during this period called the “Roaring 20s”. The Great Depression happened only after the great interventions, tax hikes and trade barriers by President Hoover and his ideological twin, Obama’s idol FDR.
It worked when Reagan slashed taxes as well, getting us out of Carter’s “stagflation”. And economic historian Burt Folsom writes about “President Bush’s Greatest Accomplishment”—his 2003 tax cuts (which Obama savaged in his speech):
“They sparked economic growth and created eight million jobs from 2003-07. Median household income during those four years increased by almost $20,000. That growth spurt from 2003-07 is almost forgotten today because of the housing crisis that followed, but we ought to remember it because it contains the means of achieving prosperity today as well.”
Thomas Sowell has also pointed out that “trickle down” economics is a straw man held by no free-market economist:
“But free-market economics is not about ‘distributing’ anything to anybody. It is about letting people earn whatever they can from voluntary transactions with other people.
“Those who imagine that profits first benefit business owners—and that benefits only belatedly trickle down to workers—have the sequence completely backward. When an investment is made, whether to build a railroad or to open a new restaurant, the first money is spent hiring people to do the work. Without that, nothing happens.
“Money goes out first to pay expenses first and then comes back as profits later—if at all. The high rate of failure of new businesses makes painfully clear that there is nothing inevitable about the money coming back.”
As I have pointed out before, inequality is hardly a bad thing if everyone is better off. However, the Left would rather have everyone equally poor—apart from themselves and their politically connected cronies, of course. But here we go again with more class warfare:
[Obama] “In the last few decades, the average income of the top 1% has gone up by more than 25% to $1.2m per year.”
Yet, here Obama has played the old fallacy, repeatedly refuted by Dr Sowell: yes, the income of that bracket has increased, but this bracket doesn’t contain the same flesh-and-blood people. Real people move in and out of brackets all the time, so Obama is just being dishonest. Sowell shows:
“IRS data show that actual flesh and blood people who were in the top one percent in 1996 had their incomes go down—repeat, DOWN—by a whopping 26 percent by 2005. … A University of Michigan study showed that most of the working people who were in the bottom 20 percent of income earners in 1975 were also in the top 40 percent at some point by 1991. Only 5 percent of those in the bottom quintile in 1975 were still there in 1991, while 29 percent of them were now in the top quintile.”
It’s hard to improve on Newt Gingrich’s response to Obama’s speech, calling him “the candidate of food stamps, the finest food-stamp president in American history.” Gingrich said, “I want to get equality by bringing people up. [Obama] wants to get equality by bringing people down.” He said, “I want to be the guy who says, ‘I want to help every American have a better future.’ [Obama] wants to make sure that he levels Americans down so we all have an equally mediocre future.”
There is so much I could cover from the Teleprompter-In-Chief, and two columns seems barely enough. But Patriots must be prepared to refute his falsehoods and illogic, and counter these impressions in their liberal friends, colleagues and family members.