Free Market Capitalism Yearns To Be Free

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.

Two energy companies announced plans this week to drill or complete four horizontal wells in the Tuscaloosa Marine Shale, an oil-rich formation that straddles the middle of Louisiana.

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?

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32 thoughts on “Free Market Capitalism Yearns To Be Free

  1. Excellent research as always. What has begun to worry me is that while we are focused on the drilling of oil, we are allowing our refineries to close. Recently, Philadlephia closed or is closing the last two remaing refineries. Once, a central hub, no longer to be. It is happening across the Country. It will be impossible to restore or build any new refineries. So while we may have all the oil in the world, it will be worthless if we cannot refine it.

    1. According to this source, the US is using about 905 of its refining capacity.
      http://205.254.135.7/dnav/pet/pet_pnp_unc_dcu_nus_m.htm
      Also, Citgo has huge refineries in the US, which are owned by Venezuela and process only oil imported from Venezuela. If we developed enough oil that we didn’t need to buy from Venezuela, this capacity would become available. And, by the way,Venezuela has toyed with the idea of selling Citgo in recent years.

    2. You are absolutely right. Our refineries are closing down and the environmental movement has made nigh on to impossible to build new ones. Ted’s right. That’s one reason our gasoline is so high.

      1. I agree. Even in the most optimal situation black markets never make up more than a small percentage of the total market. Meanwhile, there is no quality control, no ability to make sure that black market items are even real, and greatly inflated prices. Black markets also cannot exist without corruption, so they lead to a deterioration of law and order and a lack of respect for the law. The black market is simply not a substitute for a free market.

  2. I wondered about our refining capacity as it relates to the Canadien pipeline, but haven’t researched it yet. Even if this project gets around Obama, perhaps our capacity will limit it anyway.

      1. Jim, couldn’t find a contact for you on your blog and I have an off-line question for you. I understand if you don’t want that info out there. Any ideas?

  3. Has anyone here read the Lindsey Williams book, The Great Energy Deception, about the oil industry that speaks of the deliberate manipulation by our buddies TPTB to make America dependent on foreign oil? I’ve glanced through it and thought it an interesting hypothesis, plus I heard him accurately predict the Arab Spring stuff six months before it happened.

    If these One World Order people were to try to reach their aims of global interdependence, it would only make sense that they lay down regs to stifle oil production (don’t go to ANWR) and refining in a fairly self-sufficient country, which America was at one time. Think about when the EPA came into being and who brought it, none other than “Rockefeller man” Nixon. And at the same time, they were going into Saudi to open up oil while closing down American fields.

    1. Down here there are two elements to the black markets. One, which is operated by activist within the ruling regime and one operated by persons outside of the regime. It is more dangerous to deal with those outside of the regime but it is not always easy to identify who you are dealing with.

  4. “If the projects are successful, there will be more jobs and America will be just a little less dependent on imported oil.”

    Don’t get to giddy about that prospect. First we have the administration elaying the Keystone XL which will cost tens of thousands of jobs, now they just kinked this one to “study” it a little more.

    http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/obama-usda-delays-shale-drilling-200k-jobs

    1. Spot on, Bob. We not only have to remove progressives from elected office at every level of government, we have to (and this may be even more important) remove all progressives from all of the bureaucracies. That is going to be one hell of a job!

  5. I remember reading a long time ago about some country in south america where socialism is the go, and yet there were still small businesses that started up and succeeded thanks to hard work and perseverance from their owners.

    Free market capitalism is in our blood, it’s been in us for centuries if not longer, but the only way for it to succeed and thrive is for government to stay out of the way and not hinder it. However there is a role for government to maintain the rule of law, to keep the players in line and prevent them from cheating.

    Unfortunately these days government itself is big business, making it’s own rules and doing what it feels like.

  6. There are so many problems with what you’re implying, so many obvious distortions and political hackery. First, if your arguments or evidence are coming through Fox News then your likely to have epistemic closure problems. Fox News is good for somethings but being “fair and balanced” or intellectually honest, isn’t it. Your just pushing rightwing propaganda when you buy into stuff that doesn’t pass the smell test. There are so few honest intellectual conservatives left. It’s a real shame.

  7. This means that the key to the existence and flourishing of the free market is a society in which the rights and titles of private property are respected, defended, and kept secure. The key to socialism, on the other hand, is government ownership of the means of production, land, and capital goods. Under socialism, therefore, there can be no market in land or capital goods worthy of the name.

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