From the conventional news sources and the blogosphere, one might come to conclusion that free market capitalism was all but dead in this country. Most of Main Street Americans don’t follow business journals or investment analyst reports and, therefore, rarely hear about the activities of free market capitalist unless, of course, it is happening in their own local region. On the other hand, Main Street Americans are inundated with news stories of “crony capitalism”. Sadly, many Americans believe that “crony capitalism” is what capitalism is all about. Nothing could be further from the truth but that is the state of economic ignorance in America today.
Like many conservatives, I have a healthy interest in the economy. And, because energy is such an important part of any economy, one of the blogs I frequent is the MB50′s “Liquid Mud” Blog. Recently, while surfing around this site, I came across a story that was posted back in May of this year.
What struck me while reading this article was that, in spite of all the efforts of the Obama regime to thwart oil development in America, here was an example of free market capitalism refusing to be held back. The story didn’t have figures on the amounts being invested in these project; but believe me when I tell you that drilling over two miles below the surface is very capital-intensive. And, when big capital is being invested, that means jobs are being created. If the projects are successful, there will be more jobs and America will be just a little less dependent on imported oil. And, if the projects are not successful, the investors will be the ones to suffer the lost and not the taxpayers, as so often happens when our resident venture capitalist in the White House invests our money with his crony capitalist friends on green energy projects that have little or no chance of success.
Anyway, it pleased me to see evidence that free market capitalism was still at work in America. I decided to do some googling to see if I could find more examples. I wasn’t having much luck until I came across this article at Trade & Industry Development, also from May of this year.
The 15 companies we honor here with our sixth annual Corporate Investment Award (the first “Ci” in CiCi) forged full-speed ahead with monumental development investments in 2010, staring down an economy that was clouded by uncertainty at every turn. The combined corporate investment these 15 companies committed to in 2010 is a staggering $14 billion, with three companies whose individual investments alone reached into the billions. Seven of the companies invested their money in expansions; seven put their dollars to work on a brand new endeavor; and one invested in a grand-scale refurbishment.
If my math is correct, these fifteen projects amount to a total capital invest of around $12 billion. That should create a few jobs. Interestingly, much of the capital investments are from foreign companies like Samsung and Nissan. I also found it interesting that of the fifteen projects, eight are “green” projects. I don’t know if our Investment Capitalist in Chief is involved in any of these projects. So, in spite of all the bad economic news, there is evidence that capitalism is still trying to do its job.
Less you think I am wearing rose-colored glasses today, John Mackey wrote this article, To Increase Jobs, Increase Economic Freedom, for Fox News. Mr. Mackey puts things back in perspective for us. Here are some snips:
Is the United States exceptional? Of course we are! Two hundred years ago we were one of the poorest countries in the world. We accounted for less than 1 percent of the world’s total GDP. Today our GDP is 23 percent of the world’s total and more than twice as large as the No. 2 country’s, China.
So why is our economy barely growing and unemployment stuck at over 9 percent? I believe the answer is very simple: Economic freedom is declining in the U.S. In 2000, the U.S. was ranked third in the world behind only Hong Kong and Singapore in the Index of Economic Freedom, published annually by this newspaper and the Heritage Foundation. In 2011, we fell to ninth behind such countries as Australia, New Zealand, Canada and Ireland.
… we need to radically cut the size and cost of government. One hundred years ago the total cost of government at all levels in the U.S. — local, state and federal — was only 8 percent of our GDP. In 2010, it was 40 percent. Government is gobbling up trillions of dollars from our economy to feed itself through high taxes and unprecedented deficit spending — money that could instead be used by individuals to improve their lives and by entrepreneurs to create jobs. Government debt is growing at such a rapid rate that the Congressional Budget Office projects that in the next 70 years public money spent on interest annually will grow to almost 41.4 percent of GDP ($27.2 trillion) from 1.4 percent of GDP ($204 billion) in 2010. Today interest on our debt represents about a third of the cost of Social Security; in only 20 years it is estimated that it will exceed the cost of that program.
Kind of hard to be a free market capitalist in the environment Mr. Mackey describes, don’t you think? If you need any more evidence of how our government is strangeling the life out of the free market system, you can read the rest of Mr, Mackey’s article. I f you don’t need any more evidence, you might want to look for something more cheery to read. It is Friday, after all.
Well, that’s what I’m thinking. What are your thoughts?