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  • The Moral Case for Capitalism

    Arthur Brooks

    White House chief of staff Rahm Emmanuel wasn’t kidding when he said that a crisis is a terrible thing to waste, and according Arthur Brooks, president of the American Enterprise Institute (AEI), it was anything but wasted. “Indeed, the period of panic that everyone was facing opened a tremendous opportunity for the left to start establishing the principles of social democracy,” Brooks said this week at The Heritage Foundation. As the recession abates, confidence slowly builds and a dynamic is born where panic is receding and anger is setting in over what politicians did to use this panic as a pretext for government takeover.

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    Why such anger? According to Brooks, it is rampant spending, lack of transparency, and total lack of credibility from politicians. A year ago Fed economists said 2009 would bring 2% economic growth and 5% unemployment. Today we can expect to see a 1.5% decline and unemployment reaching nearly 10%. The administration is asking the public to trust the same people who grossly miscalculated the economic situation and look to them for a prognosis for the future. We should be skeptical, said Brooks. “The stimulus was predicated on predictions that turned out to be wrong. The Council of Economic Advisors said we have to pass the stimulus because it will lower unemployment. Without the stimulus we can expect 8% unemployment, but if we pass the stimulus we will have 7% unemployment. Now we see that with the stimulus we have 9% unemployment. Why are we trusting them?” wondered Brooks.

    Despite the overreaching attitude of the administration, conservative ideology still dominates in America. Overwhelming majorities prefer the free-market system. When the Pew Center asked if the free market was best for the U.S. despite its severe ups and down, 70% said yes.

    However, Brooks is concerned with the strategy used to keep those under 30 sympathetic to socialism by ensuring that they don’t become a part of the taxpaying workforce. Under Obama, the percent of working people who have no federal income tax liability will rise to 49%. “Trying to get all the taxes from a smaller and smaller group of people who are not the broader group of voters gives him the tools to change the cultural state of the nation,” said Brooks.

    For those who join Brooks in regretting that trend, AEI has launched the Campaign for the Culture of Free Enterprise consisting of traditional and digital communications, education for policy consumers and policymakers, citizen control, and most importantly making the moral case for free enterprise. “Taxation is not about money, it’s about fairness and freedom. If you raise my taxes it makes me less free, it’s unfair and it’s not American. Every time we win it’s because we make the moral case for capitalism,” said Brooks.

    Posted in Economics [slideshow_deploy]

    3 Responses to The Moral Case for Capitalism

    1. Dan, PA says:

      Anyone have any idea what would have happened without "social democratic" intervention? I am not a fan of big government, but it was the "free" market that got us into this mess. I hear nothing but complaints from the free-market types, but never hear what magic spell the invisible hand would have cast that would have gotten us out of this mess. I would honestly love to hear what their solution is. If it's better than what we have right now, I am all for it.

    2. Sam Taliaferro, Pana says:

      Dan, It was not the free market that got us into this mess. It is abundant cheap credit and the feds lack of oversight with mortgages to those without the ability to pay. All of our boom and bust are the fault of government intervention and lack of proper oversight! The market has not been free for decades.

    3. Dan, PA says:

      Thanks for the thought, Sam, but "lack of oversight" = "allowing the market to operate freely." That only reinforces my point. I agree with you that the market has never been free, which is why I put it in quotes. If it were completely free, you would have an abundance of monopolies (e.g. US Steel, the railroads) that would dominate each market, stifle innovation, and increase the divide b/w rich and poor.

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