Friday, July 20, 2012

President Obama: Top-Down Economist-in-Chief

President Obama recently chided Mitt Romney for wanting to “go back to the top-down economics of the last decade”--meaning; ”eliminate regulations and cut taxes, then the market will solve all of our problems.” Instead, Obama proposed “‘some bottom-up economics,’ [because] American prosperity has always come from ‘a strong and growing middle class, and all those people who are striving and working to get into the middle class.’”

He’s right, but not in the sense he means.

What we’ve actually had for the past decade (and longer) is a mixed economy increasingly tilted toward a domineering regulatory welfare state; a trend that has accelerated under Obama. If the stagnant state of today’s economy tells us anything--coinciding as it does with government reaching its most bloated state in American history--it is that “top-down economics” actually is the problem.

The term “bottom-up economics” more aptly--albeit somewhat crudely-- describes free market capitalism. Capitalism is based on the recognition of every individual’s right to work productively and trade voluntarily. Strictly speaking, the market--when left free--doesn’t “solve our problems”. Rather, the free market provides every motivated, able individual with the social environment he needs to solve his own problems and pursue success, sometimes straight to the top 1%--a politically unobstructed road for upward economic mobility. How?;  by forbidding the use of government force for purposes of economic favoritism, obstructionism, or to impose someone’s fantasy of “social” or “economic justice.” Since Capitalism strictly relegates government’s function to equally protecting everyone’s individual rights, it is the only true system of “the masses.”

If Obama were truly the champion of “equal opportunity” that he claims to be, he would embrace free markets, and begin working to systematically unwind the government’s labyrinthine regulatory regime. Economic regulations entrench established economic interests such as politically connected big businesses. Ending this protection racket would greatly expand opportunities for smaller business competitors. To expand opportunities for newcomers to the job market, he could start by eliminating minimum wage and occupational licensure laws, which raise the bottom rungs of the proverbial “economic ladder” out of the reach of many “ get into the middle class.”

Of course, Obama doesn’t see an unobstructed road--freedom--as a key to the middle class and economic recovery. He alluded to “a stalemate between two fundamentally different views”--which indeed there is.

One view is captured best by Ayn Rand, who once described the middle class as “a broad reservoir of energy, ...a country’s motor and lifeblood, which feeds the rest....[The] common denominator of its members, on their various levels of ability, is: independence.”

Obama’s vision is one of dependence on government; a vast welfare class, not a middle class. Despite his rhetoric, Obama is the quintessential exponent of top-down economics.

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