• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Freedom Is the Cure for U.S. Economic Woes

    President Obama recently lectured Americans on economics during a campaign stop in Osawatomie, Kansas. The New York Times congratulated President Obama’s speech as a potent blow against market economics. Cal-Berkeley professor Robert Reich called it the most important speech of his presidency. The Kansas City Star gushed over his good policy and good politics.

    In reality, President Obama disastrously misdiagnosed the source of U.S. economic problems:

    Over the last few decades, huge advances in technology have allowed businesses to do more with less, and it’s made it easier for them to set up shop and hire workers anywhere they want in the world. And many of you know firsthand the painful disruptions this has caused for a lot of Americans. Factories where people thought they would retire suddenly picked up and went overseas, where workers were cheaper. Steel mills that needed a thousand employees [were] now able to do the work with a hundred employees, so layoffs too often became permanent, not just a temporary part of the business cycle. If you were a bank teller, or a phone operator, or a travel agent, you saw many in your profession replaced by ATMs and the internet. Today even higher-skilled jobs like accountants and middle management can be outsourced to countries like China or India. And if you’re somebody whose job can be done cheaper by a computer or someone in another country, you don’t have a lot of leverage with your employer.

    President Obama appears to see these developments as symptoms to be treated by the government, when in fact the freedom to create new technologies and engage in international commerce is the best potential cure for our economic ailments.

    Just ask any of the nearly 6 million Americans who owe their jobs to foreign companies that have “outsourced” production to the United States. According to the International Monetary Fund, many more jobs are outsourced from other countries to the United States than vice versa.

    Or ask one of the 3.2 million Americans who work in the computing industry or any of the millions more who have jobs because computers have made them more productive.

    The U.S. Bureau of Labor Statistics (BLS) reports that there are more accountants, steel and metal workers, and bank tellers working now than there were back in 1997.

    President Obama’s statement that we employ fewer telephone operators today is accurate, but there is an even better example he can use at his next campaign stop. In 1997 there were over 6,000 “telegraph and teletype operators” in the United States. By 2010, the BLS had eliminated this employment category entirely. Although we’ve lost those telegraph operator jobs forever, the BLS has been forced to create new job categories for ATM repairers, cellular equipment installers, and others.

    Here’s the thing: Economic freedom works, but we have less of it now than we used to. It is this loss of freedom—not the Internet, ATMs, or outsourcing—that is the source of our economic ills. More freedom is the cure.

    Posted in International [slideshow_deploy]

    7 Responses to Freedom Is the Cure for U.S. Economic Woes

    1. Adela Keenan says:

      Not surprisingly, the Kansas City Star gushes all the time over Obama's policies, speeches, golf game and what I call his Reign of Error. I read the Star just so no one can accuse me of reading/studying current events only from the conservative perspective. The Star is an excellent source for Democrat liberal misinformation and Obama-worship. But if you look at Kansas City Missouri's demographics, you will readily see why the Star is so full of utter rubbish. Their subscriptions must be suffering or else two-thirds of the paper wouldn't consist of ads for dental implants, department store sales and gold investment companies. The reason the Star survives at all is Kansas City has loyal sports fans of all types. If not for the sports pages, the Star would look like a free local one-week toss on the front yard and nothing more.

    2. reasonableview says:

      One-sixth of the workforce and cash that is equivalent to one-seventh of annual GDP sit idle. Ask yourself why. Greed? Are taxes too low? It seems absurd that we're talking about a temporary, partial payroll tax cut. I'll take a tax cut whenever I can get it, but don't let's think that something temporary is going to start our stagnating economy. http://bit.ly/tNMKuO

    3. Robert Hart says:

      I think one prolific mistake people make when considering the economic impacts of technology, outsourcing, subsidies, etc. is that they only look at the side of the equation that's the easiest o measure – the direct impact on jobs. The indirect impact could be, and often is, far more important. An american steel company can now save money on accounting by outsourcing or by using technology. This means lost jobs for accountants. But this also means cheaper steel which will allow companies that buy steel to save there and potentially hire more employees. It also means that the steel company can stay competitive and not go bankrupt. Another indirect cost is that steel items are cheaper to consumers, which increases their standard of living. It's very hard to measure the indirect costs, but easy to measure the lost accountants.

    4. Frank Walker says:

      President Obama's economic analysis is so telling of a law professor that only worked for a short time "behind enemy lines" in the private business sector. His perspective on innovation and inability to properly value the impact of innovation continues to be a great disservice to our nation. But what is really bothersome is that he is making them 3 years into his term, not during the first 6 months when we could have given him the benefit of doubt. Surely by now, the President could have been schooled on his misundertandings. And probably has been. His continuation of this thinking leads me to believe that he has evaluated the knowledge of the general public regarding the dynamics of our economy and has concluded that roughly 50% of us can be fooled by these excuses. May God have mercy on our republic if he is accurate.

    5. Bobbie says:

      Obama disastrously misdiagnoses anything at his convenience. then he (seems to have been an overnight calling as every democrat speaker is lying through their teeth with unicorns on their minds) blatantly lies all for illusion!

      Freedom is the cure as Reagan's integrity and strong leadership promoted! For some reason, leaderships before and after Reagan, haven't the strength and doesn't respect to promote the freedom of America, personal dignity and common decency or they'd have some. what a waste of good money these cowards are paid. the ones after Reagan worked tirelessly against America's constitution, to set it all up for Obama.

      Please remove the disrespecting, condescending, unconstitutional control of government!! America stands to do without!

    6. Steven A. Sylwester says:

      The conclusion: "More freedom is the cure" begs the question: "Freedom" to do what?

      We could take our freedom to act and decide to do nothing. Or we could take that same freedom to act and decide to change the world by defending the U.S. Constitution against all enemies, foreign and domestic. I vote for the latter, and I describe my proposal "to change the world by defending the U.S. Constitution against all enemies, foreign and domestic," at: http://steven-a-sylwester.blogspot.com/2011/12/th

      Currently, the United States government requires all immigrants wanting to become United States citizens to take the following Oath of Allegiance:
      "I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty of whom or which I have heretofore been a subject or citizen; that I will support and defend the Constitution and laws of the United States of America against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I will bear arms on behalf of the United States when required by the law; that I will perform noncombatant service in the Armed Forces of the United States when required by the law; that I will perform work of national importance under civilian direction when required by the law; and that I take this obligation freely without any mental reservation or purpose of evasion; so help me God."

      My proposal challenges all U.S. citizens, including those who were born as such into families that have been proudly American since the signing of the Declaration of Independence, to stand up against our nation's enemies, foreign and domestic, that have quietly infiltrated our land and stolen our resources as seemingly friendly multinational corporations. What describes a friend? Loyalty and trustworthiness describe a friend. What describes an enemy? Lack of loyalty and lack of trustworthiness describe an enemy.

      "Friend or enemy?" is an easy distinction to make if one has the courage to draw lines in the sand. To ask the question is one thing. To require undeniable action at personal cost is something else entirely. My proposal requires "undeniable action at personal cost" of all multinational corporations that want to sell their goods and services in the United States.

      The conservative Republican capitalist will knee-jerk a gasp, but a long pondered thought should quiet that gasp and replace it with a confident patriotic joy that clearly sees a better future for America if what I propose becomes law. That is grand thinking, but it is true.

      No one should be opposed to my proposed amendments to the U.S. Constitution. Our freedom was bought at a price that required the ultimate price from many brave soldiers during our nation's history. Those who put their signature on The Declaration of Independence signed under these concluding words:
      "And for the support of this Declaration, with a firm Reliance on the Protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor."

      As we approach the new year 2012, we must all each find in ourselves the same resolve that our nation's Founders found in themselves on that most fateful day — July 4, 1776 — when those present were unanimous in their decision to change the world.

      God help us. Amen

      Steven A. Sylwester

    7. digitalpeter says:

      MORE liberty MORE growth – FAT government & taxes RESTRAIN prosperity.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×