The danger of top-down government should be very obvious to those experienced in management and education. It’s a sure way to stifle entrepreneurship, innovation and imagination.
Government should react to economic signals it gets from the private business sector — not the other way around. It needs to be an enabler or get out of the way. When bureaucracy gets huge and grinds out myriad rules, the private sector flounders, not knowing what to do, when to do it and what the bottom line costs will be.
Bureaucracy is always one step ahead, promulgating even more rules. (The Federal Register, which contains all federal regulations, grew by 27,811 pages by May 12, 2013. Also, 2010 was a banner year with 81,405 pages, of which 46,758 were dedicated to rules.) It is particularly onerous for small business to stay abreast of this tsunami of rulemaking, since they can’t afford large staffs of lawyers.
And the private sector and this progressive liberal administration work at cross purposes. Small businessmen are pretty basic, cautious guys — not ideological. So the signals they send are straightforward with no political overtones. For example, the Obamacare scare. The endless numbers of regulations that will flow from HHS Secretary Kathleen Sibelius are unknown — even to her — and the thousands of IRS agents yet to be hired. This scares the entire medical field, businesspeople and ordinary citizens. And everyone knows the transformation of the American health care delivery system is still a train wreck in progress.
There are so many other discreet issues. For one: In recent years business has been unable to recruit skilled workers. The signals from business have made it abundantly clear to the various involved federal agencies, e.g., Departments of Labor and Education. Unfortunately, the message is filtered by ideologues on the other end with political agendas and constituencies. The H1B visa cap for highly skilled temporary workers is unrealistic, and the employment-based green card visa program is backlogged. The only sector where increasing employment has run smoothly is the federal government.
Speaking of the Obama administration working at cross purposes with private industry, China — a communist country which has adopted capitalist models — does just the opposite. It is an interesting study — as well as Venezuela and Bolivia — because the leaders of all these countries have — as did Barack Obama — recently committed to rapidly transforming their economies.
President Hu Jintao, who just stepped down after 10 years in office, said, “The functions of government must be separated from those of economic enterprises … matters requiring administrative examination and approval must be reduced … and government should not intervene in microeconomic operations.” Yet our president, his entire executive branch and his liberal base totally disagree. They want all the power. The private sector must comply.
The current Chinese president Xi Jinping — long before his elevation to the presidency by the Communist Party – paradoxically has said he is a strong advocate of growing big business — not government — as a strategy to narrow income imbalances. By creating what is called socialism with Chinese capitalist “characteristics,” China has lifted 720 million Chinese out of poverty since the 1980s — more than twice the population of the United States! He was sent this signal from his ambitious communist comrades: “Turn us loose as venture capitalists, and we’ll provide the jobs.” He did — and they did.
This philosophy is antithetical to the Obama doctrine of economics. Sure — he and his inner circle of power can always point to campaign speeches he made pledging his support for private-sector business, the need to eliminate burdensome regulations and his undying support for venture capitalism in a free-market economy. But watch what he and his bureaucracy do — not their rhetoric.
Progressive liberals are all about a government-centered economy, which, as an economic model, is the polar opposite of China, a communist country! Go figure.
President Obama wants to transform America, and so did the Chinese leadership. They just went in opposite directions.
Evo Morales was elected president of Bolivia in 2005. A community organizer like our president, a union activist and socialist, he is Bolivia’s first indigenous president, who takes all his economic signals from his supporters. He has already nationalized large parts of the economy, is committed to constitutional changes to institutionalize a strong central government and land and wealth distribution. A Morales-packed constitutional court has just unanimously ruled he can run for a third term although the constitution says otherwise. (Theirs too must be a living document.) Inflation, unemployment and underemployment are his major concerns. Interestingly, Bolivia and Venezuela have the largest proven natural gas reserves in South America.
Nicolas Maduro, former vice president and successor to Hugo Chavez as Venezuelan president, is an activist, socialist, former bus driver and community and union organizer. He is cut in the mold of Chavez, a “Bolivarian” socialist, who started his political career as an army lieutenant colonel. Beloved by the poor, who voted in a referendum to abolish term limits so he could be president for life, he was despised by the middle and upper classes. He took all his signals from the poor — nationalizing large segments of the economy (oil), attacking the press, shutting down the legislature and spending lavishly on social programs. Food shortages, inflation at 30 percent and falling oil prices have destabilized the economy.
Bolivia and Venezuela are now big, government-centered economic machines that had rapidly transformed to socialism using populist strategies similar to those employed by President Obama, who captured a majority coalition of Latinos, blacks, those dependent on government who pay no taxes, unions and the 19-29-years-old demographic, only 39 percent of whom believe government is doing too much.
The Bureau of Labor Statistics reported that that for the first time in American history the majority of union members are government employees — another rising force in the Democratic Party.
The optimism of the Republican Party over the administration’s recent scandals is misplaced. The Democratic coalition has made their signals abundantly clear: They will not bite the hand that feeds them. They slavishly endorse the Obama agenda — an anti-business, government-centered economy.