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  • Henry Ford: No Model P(rogressive)

    President Obama has a new role model for his Buffett Rule tax—Henry Ford. It’s an odd choice considering that Ford advocated free-market capitalism and opposed redistributive policies.

    Despite the lucrative government contracts, Henry Ford refused to participate in FDR’s 1933 National Recovery Act. (Let’s not forget that Ford Motors was the only “big-three” automaker to decline the recent government bailout.)

    So why cite Ford as support for a redistributive “fairness tax”—especially one that discourages investment in the sort of successful companies that Ford worked to create?

    In his stump speech for the Buffett Rule, Obama argues that Ford was a progressive who understood that “prosperity has never trickled down from the wealthy few.” Accordingly, Ford paid high wages to redistribute his unwarranted profits to the middle class.

    Yes, Ford’s $5-a-day wage in 1914 (a little over $100 by today’s measure) was more than double the average autoworker’s pay. And yes, Ford felt a personal moral obligation to pay his workers well and help reduce poverty (what he called “welfare capitalism”). But paying high wages to valuable employees wasn’t a redistributive plan—it was good business.

    We were not distributing anything,” he explained in his autobiography. “We were building a future. A low wage business is always insecure.” Ford needed the $5-a-day wage to attract and retain skilled workers and stay ahead of his competitors. He estimated that the high wage reduced the number of new employees he had to hire and train by 200,000 people per year.

    Henry Ford was the Steve Jobs of his day, and cars were iPods of the 1920s. Just as Apple pays high wages to engineers to produce cutting-edge gadgets, so Ford paid high wages to retain skilled labor to build cars. Ford paid these wages because the market allowed—nay, demanded—them. Far from driving a top-down progressive policy, Ford was effectively responding to the needs of the market.

    And how did Ford react to blatantly redistributive policies? “I do not think that this country is ready to be treated like Russia for a while,” Ford said of the New Deal. “There is a lot of the pioneer spirit here yet.”

    That sentiment applies to the Buffett Rule. The rule would impose a 30 percent alternative minimum tax rate on all income (now defined to include wages, capital gains, and dividends) above $1 million. The Buffett Rule would stifle American industriousness and weaken the economy by discouraging investment, all while reducing the deficit by a mere 0.5 percent. Worse than the policy outcome is the destructive hubris underlying the proposal: the Buffett Rule assumes that only government redistribution can help the middle class.

    Obama learned the wrong lesson from Ford’s $5-a-day wage. Ford created remunerative jobs for the middle class not because of stringent progressive regulations and redistributive programs but because his company had the freedom and the flexibility to respond to the needs of market.

    Posted in First Principles [slideshow_deploy]

    8 Responses to Henry Ford: No Model P(rogressive)

    1. dorsai123 says:

      Ford also wanted his workers to be able to afford to own one of their cars …

    2. Bobbie says:

      that's right, Mr. Government god and your faithful goons! Ford did it by his own FREE WILL! So lets do it the Ford way that needed no government enforcements! THAT'S TRUE PROGRESS!!!! AND FREEDOM!!!!!!

      Get government out and people will invest!

    3. This is quite a coincidence I wrote a post on My Blog 4/10/12 in Regards to Henry Ford before Obama ever brougth this up. I just started my blog about 10 days ago and have almost 600 hits. This is a conservative blog from a couple of common everyday guy. I find it funny that alot of the interest I am getting is coming from liberal sites. I love this article and these reasons are exactly why I choose Ford in the first place. You can find my blog and story at www. Puffing Politics .com or just view my twitter profile and link from there. I love how Obama is trying latch on to the people us conservative hold dear, be it Reagan now Ford. Who next??? Only United Will We Succeed In Election 2012. That's the name of the blog and the way we need to approach these next few month. We can no longer afford to be the angry Americans sitting on our sofas or our porches shaking our fist and demanding something different. It is time to act.

    4. This is quite a coincidence. I wrote a post on My Blog in Regards to Henry Ford before Obama ever brought this up. I just started my blog about 9 days ago and have almost 600 hits. I am a conservative and I find it funny that many of my hits are coming from liberal sites. I love this article and these reasons are exactly why I choose Ford in the first place. You can find my blog and story at www. Puffing Politics .com or just view my twitter profile and link from there. I love how Obama is trying to latch on to the people us conservative hold dear, be it Reagan now Ford. Who's next??? Only United Will We Succeed In Election 2012. That is the name of the blog and the way we need to approach these next few months. The time for us to to be angry Americans sitting on our couches or our porches shaking our fist and demanding change is over. We have to act and do it now.

    5. Ford Quotes says:

      I agree BO HAS found the right person in Henry Ford to showcase.

      Don't find fault, find a remedy.

      A bore is a person who opens his mouth and puts his feats in it.

      An idealist is a person who helps other people to be prosperous.

      Capital punishment is as fundamentally wrong as a cure for crime as charity is wrong as a cure for poverty.

      Failure is simply the opportunity to begin again, this time more intelligently.

      It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.

      It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

      There is joy in work. There is no happiness except in the realization that we have accomplished something.

      Time and money spent in helping men to do more for themselves is far better than mere giving.

      Henry Ford

    6. Ford Quotes says:

      I agree,

      You can't build a reputation on what you are going to do.
      Henry Ford

    7. Ford Quotes says:

      You will find men who want to be carried on the shoulders of others, who think that the world owes them a living. They don't seem to see that we must all lift together and pull together.

      Henry Ford

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