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Businesses reliant on government and not business can’t survive in the market. The public doesn’t demand what the bureaucrats want. So, state-propped-up industries such as Evergreen Solar inevitably fail. If the administration’s unprecedented subsidies to corporations—euphemistically called “investments” by the president—are so wise, why do actual investors (the ones who make a living at this sort of thing) balk? The question answers itself.
A command economy, in which the government dictates through coercive regulation what cars will be made and through subsidies what companies will profit, can’t satisfy the needs and wants of the people. It replaces the democracy of the market, where 310 million consumers vote with their money on what products they like, with the autocracy of planners, where a few state officials decide winners and losers by remote. You should prefer electric go-carts to trucks. You should prefer collectivized medicine to your family doctor. You should prefer windmills to coal. So, you will. This is force. This is arrogance. This is doesn’t work.
The results prove far more damaging to our economy than billions in wasted tax dollars. Subsidies pervert the entrepreneurial impulse from pleasing consumers to pleasing a few guys in Washington. The subsidies give rise to a loathsome creature, the government entrepreneur, whose success depends on connections, lobbying, and perhaps bribery, but not on developing a popular product. Talents that might have been used to satisfy market demand have been reoriented to fulfill the bureaucrat’s command. It’s a waste of capital. Worse still, it’s a waste of human capital.
Predictably, attempts to manage a private economy with 310 million moving parts (by people who have never worked in the private economy no less!) has been disastrous to the private economy. Don’t believe it, the president insists. He assured his fawning Minnesota audience that “we’ve had a string of bad luck” around the world this year and that the economic slump started before his presidency “dating all the way back to 2007, 2008.”
President Obama cautioned his Minnesota audience not to “buy into this notion that somehow government is what’s holding us back.” Clearly a man thinking about establishing a federal “Department of Jobs” doesn’t.
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