sexta-feira, Abril 06, 2012

Pretzel Logic

Obama’s Pretzel Logic:
But by introducing revolutionary manufacturing processes for the mass production of low-end vehicles, Ford was able to drastically lower the price of a product (cars) that were previously available only to the wealthy. Ford didn’t create desire to buy cars, that existed independently. But he greatly expanded the quantity of inexpensive cars which allowed that demand to be fulfilled through consumption. In the process he created wealth for himself and his workers (his efficient techniques meant that workers could demand high wages) and higher living standards for society as a whole.

Obama believes that prosperity came only in the 20th century after the government began redistributing wealth from rich people like Henry Ford to the middle and lower classes. He ignores the fact that America’s greatest growth streak occurred in the 19th rather than the 20th century, and that America had become by far the world’s richest nation before any serious wealth redistribution even began.

The unfortunate part for the President is that wealth must first be produced before it can be redistributed. But redistribution always creates disincentives that result in less wealth being created. All societies that have attempted to create wealth through redistribution have failed miserably. This should be obvious to anyone who spends more than a few minutes studying world economic history. But the President is on a mission to get reelected and his ace in the hole is to fan the flames of class warfare. It’s a tried and true political strategy, and he looks ready to ride that hobby horse until it breaks.

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