By Austin Hill
Sunday, October 21, 2012
“People call this the ‘new normal.’ Let me assure you
there is nothing normal about this at all. It’s the new ‘abnormal,’ and it
won’t last, because as free people we won’t stand for it…”
With those remarks, business magnate and former
presidential candidate Steve Forbes drew thunderous applause from his audience
last Wednesday. Headlining the “Power Up!” business and motivational seminar
with Sarah Palin, Rudy Giuliani, and Indian-born Zig Ziglar protégé Krish
Dhanam, Mr. Forbes was speaking before a crowd of ten thousand at the Idaho
Center indoor sporting complex.
Forbes had just finished explaining why a confluence of
cheap credit, billions of dollars in stimulus spending, lots of new taxes and
government regulations, and the ensuing government debt have all failed to
stimulate our economy. He was confirming with his technical explanation, what
many of us know instinctively in our hearts: the reality that no organization-
no individual or family, no business, no government – can spend its way out of
debt and re-distribute its way to prosperity.
We should all hope that Forbes is right – that “as free
people, we won’t stand for it.” Because if we continue to vote for politicians
who viciously take expanding portions of wealth from our society’s producers
and selfishly redistribute that wealth to those of their choosing, eventually
the politicians will run out of other’s people’s money to redistribute and we
will all suffer the consequences. The social disorder and collapse of Greece
and Spain could be our future in the U.S., if, “as free people,” we don’t
choose more wisely.
For those who have eyes to see and ears to hear, examples
abound in this present day of how not to construct a national economy. Greece
and Spain qualify, yes, and so does Venezuela. Yet even within the last week
the news from France, another bureaucratic, debt-laden, and not-so-free-anymore
part of the free world, should be a wake-up call to all Americans.
After five years of service from President Nicolas
Sarkozy who sought to reduce government controls of the economy and to
stimulate private enterprise, French voters tossed him aside last May in favor
of a presidential candidate who was nominated jointly by both the French
Socialist Party, and France’s “Radical Left Party.” Francois Hollande
campaigned with a set of 60 propositions - referred to as his “manifesto” –
which included raising taxes on corporations; raising taxes on banks; raising
taxes on “rich” individuals; lowering the official retirement age back down to
age 60 from 62; hiring 60,000 new government school teachers; and establishing
government subsidized “youth jobs programs” in regions of high unemployment.
Today, many French citizens seem horrified that – shock!
– President Hollande is doing precisely what he pledged to do. “The situation
is very serious” noted Laurence Parisot, head of France’s largest labor union
MEDEF in an interview with the London Telegraph last week. “Some business
leaders are in a state of quasi-panic” he claimed, as the Telegraph reported
that “France is sliding into a grave economic crisis and risks a full-blown
‘hurricane’ as investors flee rocketing tax rates.”
In less than six months, President Hollande has managed
to raise capital gains taxes from 34.5% to 62.2%. According to Reporter Ambrose
Evans-Pritchard at the London Telegraph, this compares to 21% in Spain, 26.4%
in Germany, and 28% in Britain (capital gains taxes reach as high as 35% here
in the U.S.).
Mr. Parisot claims that President Hollande has yet to
understand the “extreme gravity” of the nation’s “crisis.” Additionally, a
private enterprise coalition has launched a nationwide protest movement which
they call the “State of Emergency For Business,” claiming that President
Hollande’s “confiscatory tax rates” threaten lasting damage to their country.
So let’s be clear about what’s happening in France. A
major, national labor union leader (Laurence Parisot) – arguably a counterpart
of Teamsters leader James P. Hoffa here in the U.S. – is upset because a
Socialist President is taking more money from “the rich” and re-distributing it
to others via government employment programs. Such policies would seem like a
dream come true for the AFL-CIO, yet the union leader in France seems to
understand that the “rich” in his country play a vital role in other people’s
livelihoods, and simply seizing more of their money is damaging for everybody.
Mr. Parisot takes his criticisms further, stating that “aligning taxes on
capital with those on wages is a profound economic error; it is scandalous that
the French have been left in such economic ignorance for years” (a stinging
indictment on France’s unionized public education system).
So is Atlas “shrugging” in France? When labor union
leaders panic over taxes being too high, it suggests that, yes, the trains may
soon stop running, in a matter of speaking.
Here in the U.S., it might not be so much of a proactive
“shrug” right now as it is a more passive abandonment, a “sitting on the
sidelines,” “waiting to see what happens” phenomenon with those who could
otherwise be starting new businesses (a subtle “death by a thousand cuts,”
perhaps). If he’s re-elected, President Obama will get his “Francois Hollande
moment” as he can allow income and capital gains taxes to skyrocket on January
1 (which he has pledged to do) and watch lower and middle income Americans reel
from the infliction of Obamacare taxes and penalties.
Let’s hope that Steve Forbes is right – that this is not
our “new normal;” that we will reject politicians who are vicious with
society’s wealth creators; that we will choose to remain a “free people” – and
that we will reject President Obama in November.
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