January 12th, 2011 // 11:06 am @ Oliver DeMille
Republicans and Democrats have increased government spending for years. Bush’s budget was drastically higher than Clinton’s, and President Obama has continued increasing spending.
The White House blames the Bush Administration for the economic meltdown it inherited, and rightly so.
But now independents, conservatives and many working-class Americans have reached a point where they feel frustrated that the Obama Administration has not fixed the economy — indeed, many feel that a number of programs have made things worse.
Big corporations have significant cash reserves right now, but they are unwilling to spend it with the Obama Administration’s general dislike of business. Capital goes where it is treated well, and right now that’s not the United States.
In fact, many businessmen are concerned that things will get worse before they get better, that the government will continue to make war on business, increase regulation, buy up and control more of the economy, and generally harass free enterprise.
Many believe we will see a return of recession in the next few quarters, and even if we achieve double the economic growth of the 1990s (which is obviously unlikely) it would take us over two years to get back to normal levels of unemployment.
With Moody’s report on August 21, 2010 that jobless claims are rising, “the economy is weakening,” “the rate of growth is slowing” again, and “unemployment is going to rise higher,” this is even more important.
Yet Washington is increasing regulation on business, making investment and entrepreneurial ventures more difficult, and sending the message that business is not really welcome anymore in the United States.
We need a major economic boost in the worst way, and instead our leaders are showing aversion and at times even loathing for the entrepreneurial spirit that grows any free economy. What are we thinking?
The British Way
More to the point, where is the national leader that will reboot the economy? The answer is: in England.
If that’s surprising, consider the evidence. The new British government, led by David Cameron, is taking drastic action to fix Britain’s economy. This path is difficult, but it is based on the reality of the new world economy. Americans should pay close attention.
Specifically, the new English budget balances the government’s books, shrinks most government departments by a quarter, and brings down programs and costs in schools, health-care services, welfare and many other areas of spending.
The government is “handing power to parents to run the schools,” putting doctors in charge of health care, and attempting to change “a culture in which Britons have looked to government for services and answers they could provide themselves.”
The Obama and Cameron administrations both inherited a major economic mess, but they are responding in nearly opposite ways.
So here we are in 2010 with a striking scenario: Washington is drastically increasing government spending and regulating at levels that would probably impress Marx and certainly Keynes, while Britain is reducing government and incentivizing free enterprise in ways reminiscent of Hayek or Milton Friedman!
It’s the “world turned upside down” (a song played at the end of the Revolutionary War when the British found out their invincible empire had given in to the American rebels).
President Obama and his team deserve credit for making GM profitable again and for moving forward plans to sell it back to the private market. And they are making similar progress with Chrysler.
Additional burdensome regulations and taxes on business are still being proposed, however. One recent political cartoon shows President Obama standing near a dying man named “Economic Recovery” saying, “The bloodletting didn’t work. Maybe we should try some leeches.”
For many in the business community, (whether or not it’s true) the White House appears more of an enemy than a friend. The British leaders at least seem to be on the side of trying to help those who run businesses rebound and succeed.
Of course, it remains to be seen if a nation with as much government intervention in the economy as Britain can make it work, but certainly any good news for business and enterprise is positive for the world economy.
In addition to Britain, nations including Canada, Israel, India, Brazil and even China are doing more than before to actively incentivize entrepreneurs, investors and small business.
The U.S. should take notes: Government overspending and a campaign of alienating investors and small business isn’t really the best way to boost the economy or overcome massive unemployment.
At some point, the United States will either choose to reemphasize its powerful free-enterprise roots or it will decline in world power, freedom and prosperity. Perhaps now, with the British trying to lead the way, is the right time.
He is the co-author of the New York Times, Wall Street Journal and USA Today bestseller LeaderShift, and author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.
Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.