Capitalism Is Not Charity

Capitalism Is Not Charity
John Daly
November 15, 2011

Does anyone remember those old television commercials that actress Sally Struthers did for the Christian Children’s Fund back in the 1980s? Man, they were effective. They’d show heart-breaking images of impoverished children in Africa while Struthers explained that for the price of a cup of coffee each day, you could feed, cloth, and educate those children. If those commercials didn’t pull on your heart-strings, nothing would.

I haven’t seen those commercials in some time, but I’m certainly reminded of them whenever I hear our president speak on the economy. President Obama seems to believe that the only reason we still have chronically high unemployment and anemic economic growth is because American businesses are too stingy – whether it be in hiring or taxation. After all, the president has done everything he can do to get people back to work… It’s only right that the private sector now fulfills its moral obligation – at least that’s the way he sees it.

Instead of starving children as his backdrop, he uses bridges that need repair or firemen, policemen, and teachers whose jobs need saving. And if the business world doesn’t fall in line with his vision for economic success, they’ve failed on their moral responsibilities to the country… and they must be called out and held responsible for the poor state of the economy.

Now part of this Obama strategy is clearly political. He doesn’t really believe that fixing some bridges and propping up government jobs is going to turn the economy around. However, he absolutely believes in social economic justice that relies on income redistribution as the answer for a healthy and fair economy. It’s the number one reason why he has such a hard time grasping basic capitalistic concepts for substantive economic growth.

The problem, of course, with viewing the economy as a charity is that contributions are seen as mere acts of generosity which are largely inconsequential to the donor… certainly not a risk with consequences. And that’s the very rationale the administration uses when publicly shaming the private sector to step up. They justify tax hikes by claiming they’re “patriotic” and have no negative ramifications beyond the rich just having to pay “a little bit more”. They call on CEOs to ignore economic realities, and to “stop complaining about government and get some action underway”, as Obama economic adviser, Jeffrey Immelt put it a few months ago.

There’s no consideration coming from this administration when it comes to cost-benefit analysis, risk versus reward, and what motivates business investment. It’s all about inflicting guilt and blame upon rich guys who are too “unambitious”, “soft”, and “lazy” to get up off the side-lines and give back to society. I don’t see Obama’s mindset changing.

So, if the president is determined on viewing capitalism as a charity, perhaps he can learn a few things from Sally Struthers…

Sally represented specific beneficiaries: Needy children. In Obama’s charity of the greater good, no one has any clue who the beneficiaries are. When it comes to taxation, the beneficiaries could be anything from bloated, wasteful government bureaucracies and politicians’ pet projects to foreign assistance for countries who support our enemies. Yet, the administration speaks of increased taxes as if their purpose is every bit as noble a cause as starving children. Tax payers understandably don’t believe they are respected by our leaders. They don’t see any fiscal discipline or transparency coming from Washington, yet they’re called on to support whatever government venture their money will fund.

Sally didn’t mock donors. She didn’t garnish support by calling people “fat cats”, “greedy”, or singling them out as the “one percent” who aren’t doing their “fair share”. It’s amazing to me that while the wealthiest 1% of our nation pays 40% of the total taxes in this country, they are the ones the administration chooses to vilify. Our country largely relies on the evil rich to fund the government services and entitlements the rest of us benefit from, yet we are told repeatedly by the president that they are neglecting their patriotic duty.

Sally walked the walk. She traveled to African countries and assisted in bringing aid to the children she advocated for. President Obama wants businesses to be charitable and hire new employees at their expense, even if it doesn’t make sense from a profitability standpoint. Yet, he has trouble contributing to private sector job creation at his own political expense. He supports shutting down a billion dollar Boeing plant in South Carolina to pacify labor unions which are a large part of his political base. That move would cost thousands of new jobs. Obama places moratoriums on oil drilling, and stalls plans for construction of the Keystone oil pipeline to appease environmentalists within his political base. Those moves cost tens of thousands of jobs.

Sally didn’t actively work against the humanitarian efforts she promoted. The United States has the second highest corporate tax rate in the world. The Obama administration expects businesses to hire employees and invest in the economy, but won’t leave them with adequate capital and certainty to do so. He’s like the older brother who grabs you by the wrists, and forces you to slap your own face while tauntingly asking you, “Why are you hitting yourself? Why are you hitting yourself?” If the administration won’t sacrifice federal revenue in order to simulate private sector hiring, why would Obama expect businesses to sacrifice corporate revenue in order to hire?

All of these anecdotes are pointless, of course, because capitalism is not charity, nor should it be treated as such. Ironically, it’s the actual charities in this country that are among some of the most hurt by Obama’s rejection of free market capitalism. Most are completely reliant on private sector wealth, so they’re suffering. Sally Struthers certainly can’t be happy about that.