On Tuesday, President Obama delivered a speech in Kansas (or is that Texas) where he revealed his true goal; totalitarianism. Journalist Henry Hazlitt said “Totalitarianism in its final form is the doctrine that the government, the state, must exercise total control over the individual.”
A transcript of the full speech can be found here. Two excerpts are included below.
Now just as there was in Teddy Roosevelt’s time there is a certain crowd in Washington who for the last few decades have said lets respond to this economic challenge with the same old tune. The market will take care of everything, they tell us. If we just cut more regulations and more cut more taxes – especially for the wealthy — our economy will grow stronger. [snip]
Now, it’s a simple theory. And we have to admit, its one that speaks to our rugged individualism and our healthy skepticism to too much government. That’s in America’s DNA. And that theory fits well on a bumper sticker. But here’s the problem: it doesn’t work. It has never worked.
Let’s parse Obama’s words. In the first sentence, Obama places blame on the crowd in Washington who has responded to the economic situation with the same old tune. Obama implies several decades of deficit spending, unsustainable national debt, more entitlement programs, more government control over the economy, and more government intervention in our lives has not worked. I agree wholeheartedly! But that’s not the message Obama attempts to convey. Not to mention, Obama has been part of the “crowd in Washington” the past seven years.
However, in the next two sentences, Obama places blame on the markets and tax cuts as the primary cause of the country’s economic woes. Obama continues by acknowledging individualism and self-reliance but reveals that individual liberty and skepticism of government are nothing more than a cliché; a bumper sticker slogan or a tweet.
Obama concludes that free market capitalism, individual liberty, and self-reliance have never worked. There it is in black and white for all Americans to understand. Undoubtedly, if free markets and liberty have never worked Obama implies a new governing philosophy and economic approach is necessary.
Individual Liberty and Self-Reliance
If individuals are not self-reliant then who will they be reliant upon to sustain their lives? Under what conditions must individuals subsist to receive the sustenance required to maintain their lives. Individuals must be made dependent on others to simply live. Who will provide the food, shelter, clothing, and other goods and services people need or want?
Life is the right of all rights. Man’s responsibility for his life requires him to employ his physical or intellectual abilities to produce. The product of his efforts is his property. Property rights are the implementation of man’s economic liberty to sustain his own life.
Obama believes your property — what you earn and produce — belongs to the government, and government arbitrarily determines how much of your property you can keep. If it is morally wrong for one person to steal property from another then, collectively, it is morally wrong for the government to confiscate your property and redistribute it to preferential special interests or others in society. Under the guise of compassion and benevolence an all powerful, centralized government believes it can discern fairly from whom they take and to whom they give.
Free Market Capitalism
The country has not functioned in a truly free market economy for one hundred years or more. The economy can best be described as a mixed economy; some capitalism mixed with central government economic planning and control over the banking system. Obama believes a mixed economy has failed. Yet, Obama overlooks what proponents see as the benefits of a mixed economy; a capitalist society with socialist economic government control providing everything for society. Precisely, where does Obama intend to take the country economically if a mixed economic model doesn’t work?
Certainly, Obama doesn’t espouse a return to free markets and more individual liberty, and Obama blames the current mixed economy model for the country’s woes; therefore it is rational to conclude Obama wants to further consolidate the power of the central planners, banking cartel, and the government to the detriment of free markets, liberty, and personal responsibility.
In a free market economy two parties voluntary agree to exchange a good or service to their mutual benefit. In a free market system market participants determine supply and demand, prices, wages, interest rates, imports and exports, and production and consumption. Today, the majority of these economic activities are directly controlled by the banking cartel and the government, or heavily influenced and regulated therefore perverting and retarding free market activity.
The money supply, interest rates, borrowing, inflation, credit, liquidity, and unemployment are primarily controlled or heavily influenced and regulated by the government and/or the Federal Reserve. Historically, production and growth occurred through savings and balance sheet equity. Savers were rewarded and businesses invested/expanded through savings and through the equity on their balance sheets.
In today’s perverse economic model savers are punished by low interest rates established by the Federal Reserve as a result of $15 trillion of debt service. After accounting for inflation and currency debasement, savers lose 4-6% annually on their savings. Meanwhile businesses expand through credit from banks by taking more debt onto their balance sheets. Banks extend credit to businesses and individuals through fractional reserve lending policies resulting in systemic leverage and risk through demand for future dollars. Today, GDP growth is dependent upon credit/debt expansion rather than increases in productive output.
The Federal Reserve debases the currency and uses Federal Reserve Notes with less purchasing power to sustain the profligate spending, debt, and interest due on the debt. The debt is denominated in the same currency that wealth/stored purchasing power is denominated in. We know from experience the government and the banking system will do everything in their power to keep the current system afloat. They will always sacrifice the currency to save the system. This means our store of purchasing power will degrade if not evaporate through government action. It is politically expedient for the government and the Federal Reserve to inflate.
Life, liberty, and property rights are first principles enshrined in the Declaration of Independence and protected by the Constitution. An article by George Handlery summarizes the Founders and Framers view.
The Founders and Framers had confidence in the common man and recognized man has the capacity to govern himself. This ability to reason qualified man to improve his personal condition as well as the welfare of his peers.
The Founders and Framers reasoned that man was able to express his enlightened, reasoned-governed interests and to find the means best suited to accomplish this. Therefore, man was able to exist as a self-directed and autonomous individual.
Obama’s speech expressed fundamental beliefs antithetical to the country’s founding principles. Obama does not believe man is enlightened or reasoned, nor does he believe individuals are capable of finding the means to sustain themselves. Obama believes government is responsible for your individual sustenance.
An inherent conflict arises from Obama’s beliefs. That is, if man is not capable of self-governance and self-direction then what qualifies man to govern or direct others? Obama’s governing philosophy is premised upon this contradiction.
Moreover, Obama’s speech exposes his true goal; to increase government control over the economy and individual liberty.
That is totalitarianism in a nutshell.