Market economy must be our future

The economic battlefield is strewn with the lost swords and shattered shields of failed corporations, and the age of the free market seems to have ended. Steel owls of liberal orthodoxy seem to be standing about the grave of the free market, and everywhere the controlled market seems to be the wave of the future. Still, in this melee of "reform" the free market remains the superior system and we must return to it if we ever hope to recover. Doubtless it has gone astray and to get it back on track will require tough choices in regard to spending, regulation and above all conservative theory. The rise and continued eminence of the United States has been possible according to a number of features. A resilient well meaning people, significant checks and balances on government power, and a system that fostered diversity all contributed greatly. But in economic matters the success of the United States can be traced to one form: the free market. The silver-shielded hypaspist of the free market is open competition and no other force has made more money, invented more technology and fostered as much growth as competition. As Americans we pride ourselves in a high work ethic and the ability to compete, but somehow in recent decades we have gone far astray from this concept.

In a strange combination of regulation and deregulation the federal government has seriously weakened the tenets of the free market. Excessive regulation and taxes, designed for large corporate entities, disproportionately burdened small business. At the same time, the government's failure to establish clear rules on a host of business issues created the environment for the recent sub-prime collapse. Companies and banks were allowed to grow to a point where they could not be allowed to fail, prompting a stream of endless bailouts.

Recently, failed companies like GM, were absolved by the government of bad business decisions and essentially given a mulligan on incompetence and bad management. Over regulated on one hand and allowed to run wild in the other, many American corporations ran afoul, overextending themselves and making unwise decisions. Normally, such actions would be offset by the competitive aspect of the free market, but the government has shown an unbridled desire to take away this risk thru guarantees and bailouts. Such action only worsens the decline, subsidizing failure and corrupting the free market into a controlled one. Sadly, this treachery is extended by the fact that the various bailouts are financed by an increased tax and debt burden on small businesses and individual families. Lest we forget, the same week GM asked for 17 billion in additional funds they announced mass layoffs of 50,000 workers.

With the recent economic downturn many state that the free market has been disproved and is no longer in play. But in truth this is impossible because the free market hasn’t been in play for a long time. Both Democrats and Republicans are responsible for this and both will need to show bravery and leadership in order to get it back on track. In fact, both must come to the conclusion that the role of government in regard to the economy is to preserve the feasibility of the free market and nothing more.

Economics, academics & liberty

(Denver Post, Mar. 1) One thing will get Colorado out of this recession, and it’s not big government. It is the human spirit. All economic growth is the improvement of material resources by creativity and work. Silicon, ignored for eons as beach sand, became microchips humming with intelligence. Petroleum was worthless tar seeps before men made it black gold. Our state was labeled “the Great American Desert” on early maps. People transformed it into the place of opportunity and productivity we now enjoy. Wealth multiplies when men and women combine the intellectual capital for producing goods and services with the moral capital for honest dealing and deferred gratification. Americans have always known this. “Religion, morality, and knowledge being necessary to good government and the happiness of mankind, schools and the means of education shall forever be encouraged,” says the Northwest Ordinance of 1787. The Constitution hadn’t been written, and we had barely crossed the Appalachians. But the founders put first things first.

Even today, sophisticated and stimulus-dependent as the nation has become, we sense that the truth from Washington’s time is still true: Moral and intellectual capital will make or break the American dream. Hence our endless arguments about education.

From preschool to grad school, Coloradans can’t get enough of the classroom – and can’t agree on what it’s for. That’s a good thing on both counts. The push to improve ourselves, improve everyone and leave no one behind, is laudable. The contention over education’s meaning expresses liberty in all its messy glory.

So it’s okay that the University of Denver will host a debate on Monday between Prof. Alan Gilbert and state Sen. Shawn Mitchell on trying former Secretary of State Condoleeza Rice as a war criminal. And that CU-Boulder on Thursday will allow back on campus the disgraced plagiarist Ward Churchill and the unrepentant domestic terrorist Bill Ayers.

I abhor the anti-American falsehoods that will echo at both forums. But this petty childishness is a small price for free speech and unfettered dissent. It was even a “good” if distasteful thing when a Metro State professor could smear Sarah Palin, or when a terror apologist could address the 9/11 commemoration at Colorado College.

Such unruly eruptions in the thought-life of a free society are tolerable on one condition – competitiveness in the education marketplace. As long as students have alternatives, outrageous utterances by academic malcontents hurt no one. In fair combat amongst the campuses, Jefferson’s assurance was right: lies won’t stand.

This is where it gets dicey for Coloradans. In March 2004, concerns over professorial mistreatment of conservative and religious students yielded written assurances to legislators by the presidents of CU, CSU, UNC, and Metro for better protection of academic freedom. But little has changed.

Fortunately, competition in higher ed isn’t limited to the old-line public and private colleges. Other choices include for-profit upstarts like Colorado Tech or the University of Phoenix, as well as faith-based options like Regis and Colorado Christian University. Both of the latter uphold a 1787 understanding of education’s moral and religious benefits.

CCU, where I now work, is proudly counter-cultural. One of its objectives, in addition to academic excellence, is “to impact our culture in support of traditional family values, sanctity of life, compassion for the poor, biblical view of human nature, limited government, personal freedom, free markets, natural law, original intent of the Constitution, and Western civilization.” Heretical, perhaps, but healthy.

CCU President Bill Armstrong, a former US senator, instead of railing at the Boulder leftists, politely counters by bringing to his Lakewood campus such eminent conservative speakers as Michael Novak on democratic capitalism and Thomas Krannawitter on America’s greatness. Take that, Bill Ayers.

All hail the open mind and the unregulated marketplace of ideas. A rebounding economy is sure to follow.

Bailouts beget corruption, history warns

Obama’s attempt to save America’s failing financial sector, automakers, etc., perhaps by nationalizing them, is classic socialism. It will result in failure not only of those industries but of our entire economic system. It will also produce the same massive societal corruption found in former states of the Soviet Union. I served as a Fulbright scholar in the former Soviet republic of Moldova about a decade after the end of the Soviet Union and observed how this culture of corruption continued to suppress freedom, initiative and economic growth.

f corporations are inefficient, they must either be made to be efficient or they must be allowed to fail. According to Joseph Schumpeter, destruction can actually be creative. If there is a need for the product the failing company produced, someone will step in the gap and produce to meet the demand. The fresh start provides the new company the opportunity to be free of the burdens which caused the inefficiency of the failed corporation.

If the government props up the inefficient corporation, it perpetuates the inefficiency and passes the cost on to the taxpayers and the entire economy as well. Like a communicable disease, this spreads the inefficiency from the corporation to the general economy and entire populace. Those not responsible for the inefficiency are now burdened unfairly, and that burden brings down more efficient businesses, who become burdened with the increased taxes necessary to prop up the inefficient businesses.

In this situation corporations are no longer seeking to respond to the needs of consumers to insure their viability, but to government which props them up. This is corporate welfare at its worst. The consumer loses his power to influence the market and is instead forced by the government to consume what is offered by mediocre, propped-up providers -- a situation artificially imposed upon them by politics.

Corporations find it more advantageous to cooperate with government than with the market. This close relationship between business and government elites, is akin to fascism in its truest sense which was how Mussolini attempted to run Italy in the 20s and 30s. It also corrupts both our economy and our government.

Access to government becomes the top priority of corporations, as they become more dependent on government than on consumers. Government officials began to manipulate the corporate sector and corporate executives begin to manipulate government.

This develops into a symbiotic relationship of corruption and inefficiency reminiscent of what resulted in the collapse of communism. It began with supposed noble and benevolent aspirations, and resulted in the worst of tyrannies and inevitably a far more profound collapse.

William Watson is a professor of modern history at Colorado Christian University.

Porkulus bill mocked transparency

1175 pages. That’s the length of the most massive-spending, government-expansive, pork-laden piece of legislation in U.S. history. And no one read it.

The “American Recovery and Reinvestment Act,” as it is so, ahem, inaptly called, was dispatched in its final, conference committee form at 12:00 AM on Friday the 13th.

Neither chamber was presented with a PDF copy of the bill, so the staffers, as video of a meeting in Senator Jim DeMint’s office reveals, had to go through it page-by-page the old fashioned way—by hand. Nearly 1200 pages. Normally they can search through the bill on the computer with greater ease, but the leadership would not allow it.

Furthermore, neither the Senate nor the House leadership permitted much time at all for debate and discussion on the bill in its final form, despite the fact that Republicans were essentially shut out of the conference committee process. Nor was the bill allowed to be read on the House and Senate floors.

And yet the bill was passed by the House after 2:00 PM, and the Senate followed suit later in the evening.

The public has a right to expect that, at the very least, the staffers in Congress have ample opportunity and means to read and review legislation before a vote and that their elected representatives have sufficient time to fully hash out and debate a bill before it becomes law. However, prior to the passing of the act, virtually no one got through it. And it wasn’t because they didn’t want to. With just 14 hours in the House, for instance, and no PDF copy, how could they?

Parts of the bill were even edited by hand. One line was crossed out, the number increased from $250 million to $500 million by hand. Such was the case with many portions of the bill.

Pork was thrown in casually, such as $1.4 billion tucked in for science. What kind of science? Nothing particular. Just science. So much for President Obama’s claim that the bill wasn’t stuffed with pork.

Welfare reform, the greatest success of the Clinton years, was subtly undone, as politicians in the backroom inserted provisions that would encourage states to keep the unemployed on the welfare rolls instead of take them off.

Here we have the single biggest spending bill in U.S. history, as well as the most massive solitary piece of legislation in U.S. history. Pork was unceremoniously injected. Staffers had no time to get through it all. It was forbidden to be read on the House and Senate floors. Debate and discussion were severely limited before the votes took place. Republicans were essentially shut out of the conference committee process.

The president claims to have tried to reach out to Republicans. After all, he did meet with them several times, didn’t he?

Yet when he met with House Republican leaders, he told them not to listen to Rush Limbaugh because, in doing so, “you can’t get things done.” In other words, he was telling them not to listen to Rush not because he’s a jerk, but because Limbaugh represents the antithesis of Obama’s left-wing agenda, one of the most powerful voices of opposition against Obama’s presidency. We can’t have that, now, can we?

And the Republicans will never forget Obama’s argument on taxes. “I won,” he said. True bipartisanship.

In his speech rallying the troops at the House Democratic Caucus retreat on the 6th, Obama labeled contentions against the stimulus bill “old,” “tired,” “worn-out” and “phony.” Clearly that’s the kind of bipartisan rhetoric that will get things done in Washington. That’s a new kind of politics right there, a “fresh” way to reach out across the aisle.

Sarcasm, of course. Does that sound like hope and change to you?

Obama promised on the campaign trail that a waiting period would pass during which all legislation is online for the public to view before it’s passed, yet he didn’t even attempt to hold to that pledge.

Call me crazy, but the jive I’m getting is that the Democratic Congress and Obama administration are acting out the “same old, petty politics” that the President decried in his campaign.

The bill has been passed by Congress and signed by the President. We needn't beat this drum anymore, pound something that is now law, but the way this bill was pushed through Congress less than 24 hours after its release tells us exactly what we need to know about and what we can expect from the next two to four years of Democrat dominance. As far as this observer is concerned, it puts a nail into the "openness" and "transparency" promised by the Obama administration and the Democratic Congress.

And we’re not even a full month into his presidency yet.

Big spenders unhinged; price tag $3.2T

The era of big government is back -- with a vengeance. President Obama returned to Denver to sign into law his American Reinvestment and Recovery Act -- the biggest spending bill in history, conservatively priced at $787 billion. In reality, this "stimulus" encourages nothing but government dependency and the belief that you really can get something for nothing. It should be known as the American Dependency and Redistribution Act because that's what it stimulates most.

But Americans said they wanted change; now they've got it. Or do they? President Bush's biggest failure was a lack of fiscal discipline -- the inability to say "no" to big spenders, especially those in his own party. But if Bush was undisciplined, Obama, Nancy Pelosi and Harry Reid are completely unhinged.

With a single piece of legislation, Democrats will spend more during Obama's first month than Bush spent on the entire Iraq war. They passed the 1,073-page bill before anyone could read it -- just days after unanimously adopting a policy to require that the public have 48 hours to review legislation before it comes to a vote.

Democrats' commitment to transparency in Congress follows the same pattern as Obama's commitment to keeping lobbyists out of his cabinet -- they're for it, except when they're against it.

Bush signed a feckless $150 billion stimulus package last spring and the $700 billion TARP bailout bill plan in September and was criticized for both, from the right and the left. How many Obama voters expected the new president to follow in that same furrow, using not a shovel but an excavator?

Democrats like to claim "economists agree" that a government stimulus plan is necessary. Yet economists also acknowledge that the economy would eventually recover even if Congress did nothing.

Since the choice is between a government-induced recovery and one that would ultimately sort itself out, we should expect that government action do no harm.

Unfortunately, this stimulus is a minefield of potential and inevitable harm--if not abject fiscal disaster.

Congressional Budget Office notes that any short-term stimulative effect will wane, followed by rising government debt that actually hinders economic growth.

Then there's the cost of exploding federal deficits.

The cost of the stimulus isn't merely the $787 billion in authorized spending. It's closer to $3.2 trillion because it expands or resurrects many social welfare programs. Nearly three-quarters of a trillion dollars will be required just for interest payments on debt.

Had Bush uttered Obama's simplistic "stimulus is spending" rhetoric, he would have been pilloried by the press as a know-nothing. Obama acts as if all government spending is equally stimulative, so the lion's share of this boondoggle is little more than a resurrection of the welfare state.

Welfare reforms hammered out between President Clinton and a Republican Congress in 1996 are rolled back. New entitlements are promised. These expenditures are authorized only through 2011, but the underlying programs form the foundation for a cradle-to-grave nanny state. The entitlement lobby will fight, hammer and tong, any effort to end funding, accusing opponents of "hating children and seniors," just as they vilified Republicans during welfare reform.

As the Bush administration was largely defined by the war on terrorism, so Obama's will be defined by the biggest spending bill in history, a return to the welfare state, and exploding deficits -- ultimately leading to soaring inflation and rising interest rates.

Six years ago, Bush's decision to invade Iraq enjoyed overwhelming support, but when the war effort stumbled, the public and many politicians turned on a dime and left him holding the bag. Now, public support for the stimulus appears to be a mile wide but an inch deep. Americans hope it will work but don't expect their own finances to improve.

If the economy is still struggling in a year or two with today's problems compounded by inflation and rising interest rates, President Obama will learn that he alone owns his decisions and that the Oval Office can be a very lonely place.

Mark Hillman served as Colorado senate majority leader and state treasurer. To read more or comment, go to www.MarkHillman.com.