NOVEMBER 2016 FORBES ASIA | 11OBAMA’S FEEBLE APOLOGIA
FOR THE ECONOMY
BY STEVE FORBES, EDITOR-IN-CHIEF“With all thy getting, get understanding”
FACT & COMMENT
PRESIDENT OBAMA HAS written
an “open letter” of several thousand
words to The Economist about capital-
ism, immigration, the economy and the
economic areas on which his successor
should focus.
The whole thing encapsulates the
wrongheaded and obstinately held
thinking that has brought the U.S. and
the world economies to a near halt.
The duration of the stagnation—and
the feeling that there really is no end in
sight—is breeding increasingly ugly politics.
The essay also has its share of Obama’s trademark
disingenuousness that has fanned the political divi-
siveness that he so piously denounces. For instance, he
declares that “capitalism has been the greatest driver of
prosperity and opportunity the world has ever known.”
Yet as President of the U.S., the bastion of free enter-
prise, he has successfully pursued a socialist agenda
that has Karl Marx applauding from the grave.
Smart socialists years ago recognized that govern-
ment doesn’t need to seize “the means of production”
to control the economy. Instituting sweeping and
intrusive rules and regulations that make the survival
of whole industries and companies dependent on the
whims of government bureaucrats is suicient. Finance
is the lifeblood of an economy, yet banks have been
subjugated by the Dodd-Frank Act. Regulators are also
using that legislation to try to rope in insurance com-
panies, mutual funds and any other entities that deal
in finance to garner more control for Washington. The
Federal Reserve has engaged in a regime of credit al-
location that has led to the credit malnutrition of small
and new businesses. With no authority it has given
itself a bond portfolio totaling some $4.2 trillion.
We also see what the horrific so-called Afordable Care
Act is doing to health care, which encompasses almost
20% of the economy. Fossil fuels have been under relent-
less bureaucratic attack. Colleges and universities jump
to attention whenever a Washington
agency sends a mere “advisory” letter;
such letters have been used to gut due
process regarding all sorts of alleged
ofenses, the result of which stifles free
speech and promotes thought control.
For-profit educational institutions
have been targeted for extinction.
The IRS continues to suppress groups
deemed hostile to Big Government.
Obama never misses an opportunity to
advance his goal of federal control of
local law enforcement. Even the Internet—the most dy-
namic force in modern times precisely because it’s been
free from government control—is being brought to heel
with 1930s-style FCC regulation. And on and on it goes.
Is it any wonder that for the first time in memory the
creation of new businesses lags the closing of existing
ones? Or that the economic recovery from the sharp
2008–09 downturn has been the worst in U.S. history?
Despite the most serious and unrelenting attempt in
our history to give the economy a socialist overhaul, the
President’s wordy missive states that “the economy is not
an abstraction. It cannot simply be redesigned wholesale
and put back together again without real consequences
for real people.” Yes, and you can keep your doctor, too.
Regardless, Obama’s real feelings about free markets
come through: “Economists have long recognized that
markets, left to their own devices, can fail. This can hap-
pen through the tendency toward monopoly and rent-
seeking. ... More fundamentally, a capitalism shaped by
the few and unaccountable to the many is a threat to all.”
Free markets don’t fail. Bad government policies
fail. Every major economic disaster has at its source
government error. A global trade war triggered by the
U.S. Smoot-Hawley Tarif, followed by enormous tax
increases, gave us the Great Depression. Our destruction
of the gold standard gave the U.S. the horrific inflation
of the 1970s. The deliberate weakening of the dollar in
the early part of the last decade and other regulatory mis-