By Mencken’s Ghost
Feb. 9, 2011
In his recent sermon to the U.S. Chamber of Commerce, Barack Obama came across as the most pedestrian, pedantic, preachy, and professorial president since Woodrow Wilson left Princeton to go into politics and eventually the White House. His ivory-tower comments accomplished the Herculean task of making George W. Bush look smart by comparison and have sullied the reputations of his alma maters of Columbia and Harvard.
He was an embarrassment to himself, to his supporters, and to all graduates of Columbia and Harvard.
It was even more embarrassing when you consider what he didn’t say.
First, he didn’t mention the good news that manufacturing output in the USA has increased 120 percent in inflation-adjusted dollars since 1970.
Much of this achievement was the result of productivity improvements; that is, producing more with fewer people. Approximately 19 million Americans were employed in manufacturing in 1970, versus about 12 million today, for a decline of 36.8 percent. It sounds counterintuitive, but such productivity gains are necessary for higher wages and societal wealth.
The problem is that new manufacturing businesses and factories aren’t coming on line fast enough to take up the slack in manufacturing employment caused by productivity gains. There are many reasons for this, but Obama didn’t address the following ones.
- The USA leads the world in the ratio of lawyers to total population. For example, the USA has 281 lawyers per 100,000 people, while France has 30 per 100,000 people. Obama is a lawyer, and so is half of Congress. All of these lawyers and lawyer-politicians excel at driving businesses and factories offshore with excessive litigation and regulations.
- If the growth in government employment at the state and local levels had kept pace with population growth since 1946 instead of exceeding it, there would be 12.4 million fewer government workers today. Coincidentally, this number is about equal to the number of manufacturing workers who have lost their jobs due to productivity gains. Or maybe it isn’t a coincidence. Capital that is taken by the government for excess public-sector employment is capital that can’t be invested in new businesses and plants.
- Measured by stagnant SAT scores and a huge increase in per-pupil K-12 spending over the last 50 years, the productivity of public schools has declined by 70%. Universities have seen similar declines in productivity, due to a flood of student loans and grants, which remove the incentive for colleges to do more with less.
- It’s a well-known fact that most American students are deficient in math and science and are taking easy majors in college instead of majoring in science and engineering. But even students with the intellect and academic achievement to major in science and engineering are choosing more lucrative disciplines, especially finance. For example, five percent of Harvard undergraduates majored in finance in the 1960s, versus 20 percent now. They are going where the profits are. In the 1970s and 1980s, finance companies accounted for about 15 percent of all U.S. profits. By 2005, they accounted for 25 percent.
- Much of the finance industry operates as a government-sanctioned cartel, with profits virtually guaranteed by Federal Reserve policies and the real and implied backing of the federal government in the event of a financial meltdown. Obama preaches about obscene salaries and the need for companies to share their profits, but he is in bed with the cartel and embraces corporatism instead of true free-market capitalism.
- His selection of General Electric chief executive Jeffrey Immelt to be his business guru is telling. GE is one of the largest nonblank financial institutions in the country, a result of taking cash from its industrial businesses for decades to fund its financial arm of GE Capital. During the recent financial meltdown, GE Capital was able to issue billions of dollars in new debt at below-market interest rates because the debt was backed by the federal government’s Temporary Liquidity Guarantee Program--or more accurately, it was backed by you and other taxpayers. Even the industrial side of GE engages in corporatism by lobbying for subsidies for “green” initiatives.
- Obama used his political connections to land a $200,000 job for his wife Michelle in public relations at a Chicago hospital when they lived in the Windy City. Later as president, he lambasted the profits and executive salaries of the health care industry, an industry that is half-socialist and half-corporatist.
In closing, it’s difficult to decide what’s worse: what Obama said to the Chamber of Commerce or what he didn’t say. Either way, he should have worn a black uniform during his address in honor of Mussolini, whose corporatism he emulates.
“Mencken’s Ghost” is the nom de plume of an Arizona writer who can be reached at firstname.lastname@example.org.