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Entrepreneurs Are Worthy of Their Profits

By: Steve Johnson

7/2/2009 - 34 Comments

A missing ingredient in the economic recovery is a genuine belief in entrepreneurs and their efforts to create wealth.

Many of the government policies over the last few years and recently undermine the principles that support entrepreneurs.

Yet, the politicians are puzzled as to why the economy continues to shed jobs.  The June unemployment numbers show that employers cut more jobs than expected and the unemployment rate climbed for the ninth straight month to 9.5%.

The administration somehow believes that the economy is suppose to create jobs, while simultaneously passing laws the hinder its ability to grow.

The Spirit of Anti-Capitalism Is Strong

The spirit of anti-capitalism is at its highest level in American history.  The only reason that anti-capitalism ideas are peddled is to gain power.  You see, to believe in capitalism is to believe that free market enterprise is the best tool to build wealth.  That business owners should be free to operate their business without government intervention or government control.

That is not the case as Obama has done everything but declared war against private business. But the spirit of anti-capitalism didn’t start with Obama, it started with Clinton and extended through the Bush years and how Obama is extending the war.  Reagan was that last President that actually believed in capitalism.

Anti-capitalism is a power grab.  Expanding the government to control the economy is sometimes called central planning.  Central planning does not work, because no one in politics (even Alan Greenspan) has ever proved to be smarter than the free market, which is based on consumers making free decisions based on products they want and prices they are willing to pay.

Without a free market, the strength of the economy cannot be trusted (like the phony GDP during the boom years) because central planning results in boom-bust cycles that usually ends very badly.  Capitalism results in economic balance, stability, predictability and slow growth.

Capitalism leaves nothing for elected officials to offer the public.  The only way to offer the public something more then slow and predictable growth, is for elected officials to take control of part of the economy.

The idea is that if most of the economy is run by capitalism, then the government can take control of a small part of the economy without affecting the entire wealth producing engine of capitalism - while giving the public something to get excited about and vote for. 

The problem lies in the fact that even a small step away from capitalism, leads to a path of socialism and as more and more of the economy is taken over by central planning - soon there is not enough capitalism left to produce wealth - and that is what we are facing today.

This process is well documented in Friedrich Hayek's book “The Road to Serfdom”. This is also why many economist are split of two primary views of the economy, while politicians are only interest in one.

What About Businesses that Have Boomed?

The spirit of anti-capitalism is difficult to recognize because many businesses have boomed during the boom years, of Clinton and Bush.  But now that the phony consumer based economy is collapsing and the businesses that were making all the money are now going bankrupt, it is clear that they were build on over-consumption, which was based on the misguided efforts of the governments central planning.

The spirit of anti-capitalism can be traced back to Clinton who created Freddie Mac and Fannie Mae. These entities were created to take control of the housing industry away from the free market so that the government could ‘juice’ the economy by increasing the number of homeowners. 

This ideas and many others like it are sold to the public as a ways for the government to protect the ‘victims’ of big business and ‘unfair’ business practice that keep poor people from purchasing homes.

The consequences of government central planning of the economy are nothing but a disaster – as the housing market has declining by 50%.  At the same time, many mortgage finance businesses were run out of business because they could not compete with the government supported enterprises of Freddie Mac and Fannie Mae.

The mortgage finance business owners that were run out of business by the government central planning were the real jobs that were producing wealth.  Those jobs were destroyed and replaced with government jobs that are now paid for by tax payers – with bailout money.

Entrepreneurs Are Worthy of Their Profits

The real economic recovery cannot begin until we elect new leaders that understand that central planning destroys the economy and the economy is best served by free market enterprise. 

We need leaders that believe entrepreneurs are worthy of their profits, without the government taking away their profits with more regulations and higher taxes. 

The spirit of anti-capitalism is getting stronger every day and is the basis of the recent ‘Cap-and-Trade’ and ‘Government Health Care’ legislation. 

If you look at the underlining ideas behind much of the programs that the government is expanding into, you will find anti-capitalism.

What is an Entrepreneur To Do?

The only way to make money in the US is to become a company that the government uses to control the economy or create a business in an industry that the government has yet to target to control – and the list is getting shorter every day.

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