On Economics

Letter #2: On Economics
You may wonder why I would include a letter on economics. Simply stated, I love people and I want the best for them. I don’t want people to live in poverty – and, by the way, I don’t want you to be forced into a significantly lower standard of living than you enjoy now. There are good economic systems, that work, that create prosperity and improved standards of living, and there are bad systems that fail, that enrich insiders and lawbreakers and impoverish average citizens.
The free market system, or capitalism, has brought wonderful improvements in the standard of living for billions of people in America, Europe, India, China and much of the world. I appreciate the fact that I can raise my family in a nice home, that we have running water, electricity, air conditioning, HDTV, iPhones and so on. Billions of people have none of these. Free markets simply work. Capitalism can raise the standard of living for everyone.
Arthur C. Brooks wrote a wonderful book, The Road to Freedom, (highly recommended) in which he makes the moral case for the free market. He points out that people who earn their success are almost always happier than those who are given wealth (think of the many spoiled rich kids) or handouts.
This is the social and economic genius of the Declaration of Independence. Thomas Jefferson wrote that “all men are created equal, they are endowed by their Creator with certain unalienable Rights, and that among these are Life, Liberty and the pursuit of Happiness.” It is the pursuit of happiness that brings hope and opportunity. We do not have a right to be rich, or even to be happy, but we have a right to pursue it. The Biblical principle is that work is good, that man should find value in work. It became the Protestant work ethic, and it is one cornerstone of the foundation of America.
It is much better, much more loving and kind, to teach a man to fish than to just give him a fish. The former offers a lifetime of reward, the latter only befits for a day.
That free market system is under attack today. There are frontal attacks, such as the Occupy Wall Street crowd, where Michael Moore was asked “Do you want to destroy capitalism?” He responded “Yes.” The reporter then asked “What will you replace it with?” and he answered “I don’t know, but we will think of something.” That something is a government-driven economic system and that simply has not worked. It didn’t work in Russia. I remember pictures in the newspapers of long bread lines in Moscow, under the Communists, and pictures of thousands of acres of Russian wheat, rotting in the field, because they couldn’t harvest it. The combines were all broken down, because the government planners didn’t have a plan to manufacture enough of the the broken parts.  Markets are complex systems, but the principle of supply and demand always works much better than centralized government planning.
The free economy is also strangled by big-government politicians who churn out tens of thousands of regulations, pile on taxes, give big subsidies to “their friends” who contributed to their campaigns. An example is Obama’s bail-out of General Motors. He arrogantly disregarded bankruptcy law by giving a huge share of ownership (stock) in the company to the Union and giving nothing to the creditors (including parts manufacturers who sold parts to GM and weren’t paid for them) and bond-holders. In earlier days, that alone would be cause for impeachment hearings.
All of this is not only self-defeating, it is immoral. Again, the only recourse is for the citizens of America, at the ballot box, to elect people who believe in and actively support free enterprise. The socialist or “Christian Socialist” parties of Europe have shown that, while their strategy of big government programs sounds good (Christian and caring for people in need… sounds good), they end up bankrupting the country and everyone suffers. Yes, of course, we need a safety net (like Social Security and Medicare) for the truly needy. But we need to restore those programs as true safety nets, not as enablers of a Culture of Dependency. Become a lifetime champion of free enterprise, around the world, as it is both morally right and good.

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