Government Discredited Capitalism

By Ryan James Girdusky
Thursday, October 06, 2011

The recent rallies to “Occupy Wall Street” by what Michael Moore described as “the mosaic of America” has made national news. What started off as a rally against corporate greed has grown into a laundry list of leftist grudges. The left have rightful grudge against corrupt government actions; all the while they maintain a childlike belief that government will act in their best interests if only there was just more government. It is mind baffling to see such an anemic argument by a large group who has no in-depth understanding about the difference between corporatism and free market or how government discredited capitalism.

For argument’s sake, the protesters in the “Occupy” movement are mostly in lockstep with Michael Moore when he said during one of the rallies, “we need to end capitalism”. Van Jones, the President’s former Green Jobs Czar made the statement that he was hoping this is the beginning of the “American Autumn” much like the “Arab Spring”. That’s right, Jones is hoping an American remake of the “Arab Spring” that has resulted in the death of more than 35,000 people; leftists aren’t kidding when they say they’re not pro-life.

Most of these supporters of Moore and Jones are youth looking to be a part of an idea bigger than themselves; the whole God and religion thing idea is so cliché. Many of members of Generation Y are graduating from college with student debt and a terrible job market. The diluted thinking that greed caused the economic calamity is as reasonable as blaming a plane crash on gravity.

The youth movement’s act of defiance and frustration is misplaced. Government has created the market instability, eroded the middle class and made college unaffordable. The free market did not fail the American people. It was a housing market inflated from politically driven motivations of Washington and artificially low interest rates manipulated by the Federal Reserve. “Government sponsored enterprises” like Fannie Mae and Freddie Mac instituted risk free lending to people who could not afford to buy a house. “Low income” families were able to get a loan from the Federal Housing Administration insured from up to $729,750.

Even if someone is not astute enough to understand how the government exacerbated the business cycle; a quick examination of college costs reveals the destructive force of government intervention. For example, since the creation of the Department of Education, college education in both public and private has increased six fold. In the decade before the creation of the Department of Education there was hardly any cost increase in education at all. However with the introduction of government grants for college education, colleges saw the opportunity to make money off of the cheap influx of money into the system. Education is a golden calf, unable to stomach criticism by any politicians. And as Pell Grants increased from $122 million in 1973 to $11.3 billion in 2003, colleges like Duke University saw their tuition increase from $2,000 a year in 1970 to $40,575 in 2010. This is double the rate that tuition costs increased in the three decades before 1970.

This is what is feeble about the “Occupy” movement’s thinking, they very clearly have grievances; grievances many Americans can sympathize with. Their approach to solutions on the other hand is completely ass-backwards. They stand shoulder to shoulder with the President demanding he support class warfare and demand the government create jobs.

They can’t seem to comprehend President Obama has already supported class warfare, but he’s on the side of “1%”. Obama has gone to fundraising dinners where donors gave up to $38,000 per person. President Obama has practiced class warfare in support of big business. He has supported new repressive regulations that stifle growth, competition, capital and ideas in industries. Corporatism, the religion of American politics today; is supported by the very rich and have made monopolies of the top 1%. None of that could have been accomplished without the heavy hand of the government.

In response to the movement’s demand for government creation of jobs. The government doesn't create jobs, it creates dependents. People buy into the premise that the government can lift them from their plight. So they vote for a political party and politicians who support bigger government when in fact the political parties and politicians have an agenda to keep the poverty because it has created a voting base to keep them in power. And for every dollar the government uses in the public sector is money taken out of the private sector. It is the invisible hand of government into the market that diverts resources from the private sector that actually creates wealth.

If the “Occupy” movement is fully supporting more regulation, let’s regulate the government. If the government would get out of the way and give capitalism a chance it would work. If the “Occupy” movement wants a more a better economy, they might consider giving freedom a chance.