I had an interesting exchange with my old friend and colleague Jon-Christian Suggs on Facebook after the election. He made this comment about our philosophical differences:
“In his speech last night, the President noted that we are a ‘self-governing’ nation. I think that our differences are located there, in that your vision places more emphasis on the “self” part of that adjective and mine more on the “governing” part.”
What better inspiration could I have for my first post-election newsletter? It is true. My vision of the economy places much more emphasis on self than on government. I believe in the principles of self-determination, self-reliability, self-discipline, individual freedom, individual responsibility leading to self-improvement, and any other kinds of self- you can think of. And I believe the role of self-interest is the driving force behind the economy.
Self-interest means that individuals will act in ways that will enable them to achieve greatest satisfaction or provide the greatest benefit. In the market system, self-interest means that producers will try to do things that are best for themselves. This usually means that they will try to maximize profits. Adam Smith says in The Wealth of Nations, his great book on market economics, producers are led by an “invisible hand to promote an end which was no part of his intention.” In order to maximize profits, producers benefit society by producing those things people want at prices they can afford. If they don’t, profits will disappear and the business will go broke.
Professor Suggs, with whom I flew over Vietnam, sees government rather than the role of self-interest as the driving force behind the economy. He would dismiss individual responsibility and freedom. The government will provide. Government will redistribute wealth from those who are willing to work to those who aren’t and from the future to the present to satisfy the wants of the 47%. He agrees with President Obama who has stated thousands of times, it seems, that everyone should pay their “fair share.” Nobody has defined “fair share.” He will replace the invisible hand of capitalism with the iron fist of government. Government will determine what will be produced, not the market. A 123, maker of electric car batteries, failed after $249 million in taxpayer support. Taxpayers lost $535 million supporting Solyndra, Obama’s favorite green company. Vestas Wind Systems is reducing employment by 3,000. Husqvarna is cutting 600 jobs. Obama, as promised, is putting coal companies out of business. Employers are converting full-time employees to part-time. The list goes on. For more information on the effects of the election visit
Obama was re-elected by those who place more emphasis on the “governing part,” and their number now exceeds those who emphasize “self.” It will so be until the coming economic collapse. The cost, now over $150 trillion, is unsustainable.
A character in Ayn Rand’s Atlas Shrugged said ”There will be no chance for the poor until the rich are destroyed.” That seems to be the objective of Obama’s progressive government.
Chuck Holmes, Your Common Sense Economist

Posted by at November 11, 2012
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