Indiana Governor Mitch Daniels talks about the environment necessary for job creation.
Here are the main points of the video:
The economy isn’t some machine that needs jump-starting. The economy is people, and people create jobs. Hong Kong is a great example. Fifty years ago, they were as poor as China. They have no natural resources. Now, the personal income of Hong Kong is higher than Canada or Australia. Was this created because of Obama-like government “investment” and job creation? No. It was achieved through free enterprise.
Government doesn’t create jobs or wealth. Daniels says we must moderate government spending and liberate the private economy so it can grow. Indiana is now ranked as the third most economically free state. They have reformed the regulation system and tort system, have built infrastructure that business needs, and have lowered taxes.
In this short video American Enterprise Institute President Arthur C. Brooks explains we’re in a moral battle and why we can win the fight for free enterprise.
Based on his best-selling book The Road to Freedom, Brooks makes the following points in the video:
The free enterprise system is the best system devised for creating prosperity. There is plenty of data to prove this. However, we are barraged by stories of sick kids and families that can’t make ends meet and CEOs that spend millions to decorate their offices. It’s no wonder that many people think that spreading the wealth around will make a fairer society
Providing statistics about GDP growth won’t win the argument. Government keeps growing because we fail to make the moral case for free enterprise.
The moral case for free enterprise has three key points:
Free enterprise safeguards lasting happiness.
Free enterprise promotes real fairness.
Free enterprise does the most good for the most vulnerable.
Safeguards lasting happiness
Did the Founders mean “pursuit of money” when they addressed the “pursuit of happiness”? No. Studies show that money doesn’t buy happiness. However, earned success does generate happiness. Earned success means you are creating value in your life and value in the lives of other people. Studies show that people who earn their success, regardless of their income, are the happiest people in America. Conversely those who feel that they have not earned their success are the unhappiest people.
To have a happy life, you have to work and sacrifice for what you have. In 1972, researchers at Stanford University took children into a laboratory and told them if they could wait 15 minutes before eating a marshmallow, they would get a second one. Two-thirds of them failed. The researchers followed up years later to see how the childrens’ lives were turning out. The kids who waited had SAT scores 210 points higher than the kids who didn’t wait. The kids who waited made more money and were less likely to commit a crime or take drugs.
Deferring gratification is something worth teaching. However, expanding the welfare state does the opposite. Free enterprise is the only system that allows us to pursue our happiness by earning our success.
Promotes real fairness
Does fairness mean spreading the wealth around, or does fairness mean rewarding hard work and effort? Why do immigrants come to this country? Was it to get a fairer forced system of income redistribution? Or was it to be rewarded fairly for their hard work? To illustrate, consider a classroom. Typically, those that work the hardest get the better grades. Let’s call this grade inequality. How would students react if we took the points from the top quarter students and gave them to the lower quarter students? Most students, even those at the bottom, would think that is an idiotic idea. Isn’t it the same for income redistribution?
Most good for the most vulnerable
Since 1970, the percentage of people who live on a $1 a day or less has declined by 80%. Billions of people have been lifted out of poverty. How? It was free trade, entrepreneurship, property rights and rule of law. No other system has lifted more people out of poverty than the free enterprise system.
This short video from the Center for Freedom and Prosperity documents the wasteful spending from the so-called stimulus legislation and explains why government spending hurts economic performance.
Here are the main points of the video:
When the $831 billion stimulus bill passed, it was promised to save or create 3-4 million jobs. Obama predicted that the stimulus would keep unemployment below 8%. Instead it peaked at 10% and still remains at 8.3%, as shown below.
Therefore, the stimulus bill failed. Why? Consider the following:
It replaced windows in a visitors center near Mt St Helens. Unfortunately, the center has been closed since 2007.
It sent researchers to film exotic ants in Africa.
It spent money on Sharp Park Golf Course in San Francisco to pay for new pipes to pump recycled water. Today, environmentalist are suing to convert the course into a wildlife sanctuary because the pipes endanger frogs.
It spent money to build a new community center for the Mohegan Indian tribe. However, the tribe owns and operates one of the highest grossing casinos in the U.S.
It spent $1 million on the federal government economic recovery website.
When government spends, it must take the money from the private sector which reduces money spent on productive investments made by the business community for creating jobs. 70% of jobs are created by small businesses. They typically bear the brunt of tax increases to pay for government spending.
The government does a poor job of spending resources compared to the private sector. Some of the worst waste comes in search of green energy jobs. The bankruptcy of Solyndra resulted in a loss of $530 million. A123 Systems is hemorrhaging money costing the federal government $250 million. SolarReserve received a $737 million loan guarantee. Investors in the company include Ronald Pelosi, brother in law of Nancy Pelosi.
The list can go on and on. When government selects and backs private companies, it only serves the interests of politicians and lobbyists, not the public.
I, Smartphone is a video based on the essay “I, Pencil” penned by Leonard Read in 1958. Big Government cannot control an economy. Only Free Enterprise with millions of participants working independently can produce the infrastructure to devise, manufacture, and distribute a smartphone.
Here are the main points of the video:
No one person on earth knows how to design, manufacture and transport a smartphone.
Designers in California, New York, and England create a prototype.
The plastic casing is made from crude oil pumped from Canada, Texas, and Russia.
Chemists from all over the world refine the oil to form plastic polymers.
Factories in China use injection molding to form the plastic casing.
The copper in the circuit board comes from Chile, the US, and Australia.
The LCD screen is manufactured in South Korea.
The image sensors are manufactured in Singapore.
The processor is manufactured in Taiwan.
The lithium in the battery is mined in South America.
The smartphone is the descendant of thousands of inventions. Millions of people around the world have worked to create the necessary technologies, such as cellular transmission, fiber optics, the Internet, global positioning, power generation, computer processing, etc..
In addition, ships and trucks transport the device to the stores.
Products such as a smartphone can only be produced at affordable prices in a free enterprise system. No central control by Big Government can duplicate this feat.
Whole Foods CEO John Mackey on The Moral Case for Capitalism
At FreedomFest 2012 (for 2,000 limited-government enthusiasts and libertarians), Reason’s Matt Welch sat down with Whole Foods CEO John Mackey to discuss why capitalism is viewed poorly and how to alter the misperception. Mackey is trying to make people understand that business creates value. He wants business to be elevated to a proper place in society.
Here are the points that Mackey makes:
Mackey says that there seems to be something in human nature that wishes to restrict other people’s choices (addressing the source and nature of food distribution). There is an anti-business mentality in the country. People think that business and capitalism are fundamentally selfish, greedy, and exploitative. However, that is not true.
Mackey says that capitalism is amazing. He has new book coming out, Conscious Capitalism: Liberating the Heroic Spirit of Business, in which the first chapter is about the success stories about capitalism. Capitalism creates wealth and products/services that help people.
The second chapter is about the misperception about capitalism. People do not understand the purpose of capitalism and the contributions it makes to people. These contributions are no less than those provided by professions such as doctors, teachers, engineers, lawyers, and architects.
Business is the greatest value-creator in the world, for its customers, employees, suppliers, investors, communities. Businesses are heroes. In the 1760s-70s Adam Smith wrote two great books: The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations. If you synthesize the two, you combine self-interest with care for others. This provides the ethical foundation for a great economic system.
Intellectuals have ignored this ethical foundation of capitalism and spin it to sound like capitalism is based solely on self-interest. That has led to Marxism, which brands capitalism as fundamentally evil. Economists have also contributed to this flawed narrative by characterizing capitalism as strictly creating wealth, but have ignored the ethical foundations of capitalism.
Mackey is trying to make people understand the type of value that business creates. He wants business to be elevated to its proper place in society.
In Part 3 of the series, Bill Whittle shows how wealth can be created from thin air. Only businesses create wealth by selling goods and services. This creates jobs. Government cannot create wealth; it can only transfer resources.
Here are the main points that Whittle makes:
The fundamental divide between liberals and conservatives is about wealth. Most liberals believe that wealth is limited and fixed. If someone has more, then someone else has less. The rich steal from the poor. Conservatives believe that wealth is created through invention and hard work. The rich are heroes because they have created new jobs and goods/services.
In 1862, the federal budget was $530 million. In 2010, the federal budget was $3.55 trillion, about 7,000 times greater. Does that mean there is 7,000 times as much wealth today compared to 1862? The answer: YES. The population has grown only 10 times but the country’s wealth has grown 7,000 times.
In 1862 the city of L.A. (main street downtown) looked like this:
Today, L.A. looks like this:
If wealth is limited, where did all of this stuff come from: the shops and restaurants and buildings and houses and automobiles? Where did the money come from? Today, the poorest people have more than the richest people in 1862: antibiotics, electricity, cellphones, etc.
Here is how wealth is created:
Creativity. If you create a song, book, or electronic device, etc., you have created something in your head that wasn’t there before. If useful, other people will turn over their extra money to buy your creation. The iPhone is an example. The materials for the iPhone (metal, plastic, glass) cost a few pennies. The value comes from what it can do.
Complexity. As a temp, Bill Whittle cross-referenced customer names with checks issued. He was creating value. He reduced the time higher level, more valuable employees spent on clerical work so they could do more valuable work like customer service. A cross-check, confirmed list was more valuable than one that wasn’t.
Free Trade. Free trade results in higher wealth for both parties. They voluntarily exchange resources. Everybody wins. Free trade is non-coercive. Both parties only trade when they believe that what they want is worth what they have.
The US. GDP is $14 trillion, and the population is 306 million. The African country of Djibouti’s GDP is $1 billion, and the population is 725 thousand. The US has 400 times the number of people but produce 14,000 times what Djibouti produces. If we confiscated everything that Djibouti produced, it would fuel the US economy for 38 minutes. Therefore, the notion that the US steals natural resources from poorer countries is ridiculous.
Government can’t create wealth. Only private individuals and companies can. From wealth, jobs are created. Government should promote wealth creation, not confiscate wealth.