“These Hands”: Making the Moral Argument For Choosing the Private Economy Approach
There is an interesting article today in the Wall Street Journal entitled “Henninger: America’s Two Economies”. In that article, the author, Daniel Henninger, expresses how the current choice Americans are facing in the election of 2012 relates to a choice between two economies, i.e. the private economy and the public economy. Here are few quotes from the article:
For a long time, the United States had one economy. Now we have two economies that compete for America’s wealth: A private economy and a public economy. The 2012 election will decide which will be subordinate to the other. One economy will lead. The other will follow.
Today the private and public economies are in head-to-head competition for the nation’s wealth—with the private economy calling that wealth capital or income, and the public economy calling it tax revenue and making moral claims for spending tax revenue.
Barack Obama’s routine use of the traditional private-economy term “investment”—in energy, education and such—is the public economy claiming capital for its needs.
President Obama is telling the private economy it must subordinate itself to the public economy’s moral efficacy. The passage in 2010 of the Affordable Care Act, with no Republican support, was justified as a 1960s-type act of moral necessity. The private economy, in his view, can’t compete on that basis. (emphasis mine)
Well said, Mr. Henninger! This very much so plays a part in the choice that Americans are facing right now. So far, this effort to subordinate the private economy to the demands of the public economy has been veiled in terms of “fairness” and “making sure everyone has an equal chance at success”. It’s nice to see someone rip away that veil to reveal in no uncertain terms exactly what is being hidden behind the veil!
There is indeed a moral argument that could be made for choosing to place the private economy as a higher priority over the public economy at this point in time. I’ll try to express my own argument for this choice, but I hope other people will do the same as well.
First, let’s try to define this choice in the context of approach. What kind of approach is President Obama telling us he will be taking if he is re-elected? The approach that is being offered to us as Americans is that government will take on an even greater and larger role than it currently has (via centralized planning and state-managed capitalistic endeavors) of becoming the driving force of our economy rather than relying on the traditional forces of supply and demand that have governed the private economy for years on end (and contributed much to our nation’s success over the years as well!)
Government will extract the funds needed from the private economy in any and all means possible (such as increased taxes and regulations) for the purpose of funding the public economy. ”Equal opportunity” (in the context of jobs) will then follow by means of increased expansion of government-sponsored spending programs (such as education, infrastructure, transportation, housing, etc.) and/or enforcement of regulations imposed on the private economy.
Realistically speaking, this is what President Obama is proposing for America’s future.
As American citizens, the outcomes of the election in November could very well be the most important choice of our lifetime, because by that choice we define where our country goes from here. For that reason, it is critical that we evaluate what President Obama is offering as objectively as we possibly can in light of the current situation our nation is facing. (Note: the link provides 40 different statistics of where things stand now. Rather than try to list them, I’m simply providing the link to the site. But those statistics have to be taken into context in the current situation!)
With that in mind, setting ideology aside for a brief minute, let’s look at the potential for success if we choose putting the public economy over the private economy. Is it possible that what President Obama is offering would actually work? Maybe, to a limited extent. Why limited? Because certain conditions would have to hold true consistently in order for this approach to work. What kinds of conditions? Here are a few (along with my own personal opinions in response to each).
1) There would have to be a strong balance maintained between the private economy growth and public economy growth. The public economy can’t go overboard on the demands that it places on the private economy. Why? Because the private economy derives its success due to the risk that is taken by individuals, and those individuals have to evaluate a risk/reward analysis that they personally can live with. (Put individual citizens in a situation where they are reduced to nothing more than a means to an end and objects to serve the purpose, being driven like pack mules for the sake of meeting the demands of the public economy, taking on risks without any noticeable reward in return…chances are we’ll see a very significant decrease in willingness to take those risks!)
2) The success of President Obama’s approach relies on and depends on government to act in an unbiased, nonpartisan manner where investment of public economy funds is concerned. (Not likely to happen, especially under the leadership of President Obama…we’ve already seen massive evidence of deference to special interest groups by this admin and four more years would yield more of the same)
3) President Obama’s approach would also require that government spend public economy funds wisely and prudently. (Not likely to happen under President Obama’s leadership either…see both TARP and Solyndra for explanation)
There are other conditions that probably would have to be met in order for this approach to succeed. I’ve just named a few that I can think of. Even if the people of our country were gung-ho about taking this kind of approach, we really do have to be realistic about considering who would be ultimately responsible for providing the leadership for this type of change and whether that person has proven that they are genuinely qualified to provide that leadership.
On the other side of the equation, we have the choice of taking the approach that we should put the private economy as a higher priority over the public economy (or at the very least ensuring that an appropriate balance is maintained). There are conditions that have to exist for the success of this approach as well. Here are a few on the private economy side:
1) An appropriate environment that encourages investment in the private economy would have to exist
2) Limiting the role and scope of government as it pertains to regulatory matters
3) Balancing the need for revenues with encouraging growth and development in the private economy
There are two other questions I can think of that we should ask. The first is which of the two kinds of approach identified has the greater scope of potential? And in light of the hard cold reality of the economic challenges our nation is facing right now, which of the two is the wisest choice for us to make?
I can’t make that choice for other people. My own opinion is that the potential to overcome the economic challenges we are facing is greater by far in choosing to put the private economy ahead of the public economy. This doesn’t mean that I think we should completely and totally ignore the plight that a lot of our fellow Americans are facing right now, because I don’t.
Going back to something that Mr. Henninger mentioned, that (in his opinion) President Obama is of the belief that the private economy can not compete in terms of a moral argument that supports choosing the private economy over the public economy. I disagree with that particular viewpoint. I think there is a very strong moral argument that can be made to support choosing to place the private economy as a higher priority over the public economy, especially right now.
From the viewpoint of presenting a moral argument, the RIGHT choice for us to make is to choose the approach that provides all of us, both individually AND collectively, with the greatest potential in overcoming the challenges that we the people are facing and the broadest scope of options that would allow us to overcome those challenges as quickly as possible.
In many ways, economics is much like politics in the fact that the greatest impact is at a local level. It is at this level that we have the greatest opportunities. And it is by the sweat of our own brow, the determination of the human spirit, and the labor of our own hands that we have the greatest potential to get this country back on the right track!
Morally and ethically, choosing to place the private economy as a higher priority than the public economy is the RIGHT choice for us to make.
What it comes down to, for we the people, is will we make this choice???
“These Hands”…it’s all right there, in our own hands, folks.