Capitalism Is Not Charity

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.

Author Bio:

John Daly couldn't have cared less about world events and politics until the horrific 9/11 terrorist attacks changed his perspective. Since then, he's been deeply engaged in the news of the day with a particular interest in how that news is presented. Realizing the importance of the media in a free, democratic society, John has long felt compelled to identify media injustices when he sees them. With a B.S. in Business Administration, and a 16 year background in software and web development, John has found that his real passion is for writing. His first novel, entitled "From a Dead Sleep", is now on sale! He lives in Northern Colorado with his wife and two children. Like John on Facebook. Follow John on Twitter.
Author website: http://www.johndalybooks.com/
  • 6mm Tungsten Carbide Ring

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  • T Geloso

    Burt,

    Why don’t you tell us what you think the function of the federal gov’t is.
    My guess is to be paid lackeys of the super rich and the multi-national corporations. Y/N ?

    • John Daly

      T, Why don’t you tell us why you think Burt wrote this column?

  • Drew Page

    I am 67 years old. I and the Baby boomer generation grew up during the most prosperous time in American history. At the close of WWII, there was only one place where every other country in the world turned when they wanted to buy anything manufactured. From heavy duty earth moving equipment, steel beams for building construction, cranes, bulldozers, trucks, cars, ships, planes down to household appliances — all were manufactured here and were sold to the rest of the world. That resulted in the growth and expansion of American businesses and manufacturing plants, full employment and the growth of wages and benefits for the American workforce.

    This period, more than any other, saw the creation and growth of the ‘middle class’. A man could find a good job most anywhere without a college degree. He could support his family, buy a house, have an automobile and save a little money while his wife raised their children at home. With full employment, most people had health insurance and pension plans provideded by employers. From the end of WW II in 1945 until 1975, the economy kept getting better and better.

    Around that time, America went off the gold standard. When oil producing nations learned that our currency was no longer backed by gold, the price of oil trippled. Inflation skyrocketed. Up to that point, the Big Three U.S. automakers were putting out inferior quality, gas guzzeling cars at ever increasing prices. We woke up one day to find the price of gasoline went up from $0.35 to $1.00 a gallon. Shortly thereafter, we began to see a flood of Japanese cars we called “rice burners”. They were funny looking little things, but they cost half what an American car cost and got 25 miles or more per gallon, instead of 10. Within a couple of years those “rice burners” had a 30% market share. The Big Three had to lay off 30% of its workforce, as did all the suppliers of the auto industry. Those still working had a thirty year history of annual increases in wages, insurance and pension benefits and we weren’t about to settle for less. But, we were finding that there were others in the world quite anxious and willing to work for far less in wages, benefits and pensions to manufacture all those things that we used to make.

    To supply Americans with manufactured goods at low prices and to maximize their profits, American businesses began outsourcing manufacturing jobs to foreign countries. Not only were wage demands lower in foreign countries, so were taxes. Businesses did not have to provide insurance benefits and pensions. They didn’t have to deal with continual union demands for higher wages, better benefits or shorter hours. They didn’t have to deal with endless government interference in the form of regulations and red tape.

    Many Americans began to complain of jobs being outsourced, but continued to buy products made in foreign countries. One need look no further than the parking lots of the former Big Three U.S. automakers. How many UAW workers were/are driving vehicles made in Germany, Japan, S. Korea and Sweden? Look at the success of Wal-Mart. Why do so many shop there? They shop there because of the low prices, yet nearly everything in the store is made in China.

    Americans want job security, high wages, guaranteed health insurance and generous pensions, but don’t want to pay the higher prices that union made in America products demand. We do not want to accept the premise that we can’t have it all — so we put our faith in politicians who tell us that we can have it all. About half the country believes this nonsense and the other half doesn’t. This November should prove interesting.

    • T Geloso

      Drew,
      To supply the American market is at least the veneer of what they’d like you to believe. but it’s manipulative and disingenuious.
      US corporations, are by law charged with the duty and responsibility of making as much money as they can. This could credibly applied to forigen ones as well. For who, is another question. That’s it, nothing else.
      If there’s lower prices that comes from and after that, then so be it, but it’s NOT a primary concern.
      Haven’t you ever heard of the phrase, charging what the market will bear, NOT what’s a fair amount given all the facets of getting the particular product market as a pricing policy.
      The CEO’s, COO’S etc. couldn’t care less what secondary effects their policies have. All they care about is the money they can make for themselves thru the company. Just another marriage of convienence.
      To do this these people show what sociopaths they really are by being ruthless to anybody that gets in their way for whatever “reason”. Anybody doesn’t just mean Americans. The low wage earners, the enviornment of whatever nation. Other countries are no less abused in a different ways then we Americans are.
      I figured out a long time ago, I’m not in this life to become the equivlent of a hunk of beef to be carved up to prop up the bottom line of some ruthless sociopath(s).
      I calls ‘em as I sees ‘em.

  • ted wight

    Finally. Yes all this falls on deaf ears. The Republicans/Conservatives need to win. WIN. This is the Second Civil War of the United States, less bloody but just as important as throwing off the bonds of slavers. This president and the philosophy for which he stands will bring slavery to three hundred million Americans ultimately and poverty to the rest of the world. We need to gear up for the fight of our lives and go tooth and nail against the President of the Democrats. And WIN.

  • ted wight

    unfortunately the likes of bill gates buy into this charade by his massive charitable organizations. they are wonderful, no doubt, but it is his capitalist endeavor that changed the lives of tens perhaps hundreds of million people for the better by standardizing the software for the personal computer. that he doesn’t shout out this contribution incents the obamas of this world to diminish free enterprise. shame on you bill.

  • Robert A. Hall

    No, Capitalism is Freedom. Freedom from want included. I will link to this from my Old Jarhead blog.

    Robert A. Hall
    Author: The Coming Collapse of the American Republic
    (All royalties go to a charity to help wounded veterans)
    For a free PDF of my book, write tartanmarine(at)gmail.com

  • John In MA

    Obama simply has a different use and meaning for, “You are either with us or against us.” “Us”, in his case is him – okay, maybe his administration. And he is spending all his political capital pointing out those who are against him. Elected class, news outlets, corporations holding cash, people earning money, etc. Even the most ardent liberals I know, and I live in an area where they are predominant, are tiring of this approach. Does he have enough capital to keep it up and make it through the election?

  • Homer

    Profit is a Bad Word in the Obama and Socialist jargon. In that sense, all your arguments fall on deaf ears. They simply slip off.
    Occording to that approach, what different does it make if your business will make more or less money? It’s sole purpose it to provide jobs, not to make money for the investors.

  • Ken Hansen

    Personally, I don’t understand the benefits if borrowin money from the Chinese to fund subsidies so that American solar panel factories can be built and borrowing even more money from China to subsidize the purchase of the panels built in the subsidized factories so that American companies can ‘compete’ it what is widely acknowledged as a commodity market… If we had the money to pay for all these subsidies that would be one thing, but to borrow the funds from China so that we can compete in a commodity market against their own heavily-subsidized solar panel industry.

    The only money in the solar market is the China’s and if they control the market they win, and if they lose, they win because of the interest they collect on the debt used to prop up their competitors!

    • 5hands

      The interesting and insightful fact that China builds most of the solar panels that are in use around the world, yet only employes a small amount for their own use. They build coal powered plants to continue their industrial powerhouse. Apparently they know that solar power, in it’s current form ,is a poor return on investment!

      • Ken Hansen

        The elephant in the room is that US labor costs are way, way to high to profitably produce commodity products, yet politicians continue to deny this fact as they try and offset high labor costs with borrowed money…

        • Bob Weber

          Exactly, and the only way to address labor costs is to either lower/eliminate regulations like minimum wage or create tariffs on imported goods. No one wants to discuss either of those options so we get hand wringing and doublespeak instead.

  • Barker

    The only thing lazy about Americans is their inaction in politics – at a time when it is crucial to stand up against Obama and his communist friends.

    Unfortunately, too many of us would rather hear Hollywood gossip than warch FOX News or hear the truth from Rush Limbaugh, Hannity or Glenn Bsck. Or they get their slanted news from Obama’s buddies on ABC, CBS, OR NBC.
    How many folks have read Bernie Goldberg’s book called “BIAS” telling how the mainstream news media distorts the news with warped reports and outright lies.
    The people who really need to read it are so brainwashed that they don’t even know it exists. Or many are the liberal parasites who live off the hard working taxpayers in America.

  • Roadmaster

    For Progressives, charity comes from gubmint. The cheap bastids never dig into their own pocket. They love taking it out of other people’s pockets, though, and giving it to many who don’t need or deserve it.

  • Ken Hansen

    Two notes – first, the top 1% pats 49% of all federal income taxes yet, oddly, they only earn 20% of all income… Wouldn’t their ‘fair share’ of income taxes be closer to 20% than north of the 40% they are now paying?

    Second, the Boeing factory case is stupid – the unions allege Boeing built the factory in SC to ‘hurt’ the union, what often goes unreported is that as Boeing built the SC factory and after the union rolls in Washington state increased – Boeing increased the number of union workers while the union claims Boeing was trying to ‘hurt’ them? That’s a funny way to hurt the union…

    It really is amazing how the only jobs this administration is interested in ‘stimulating’ are union jobs, be they ‘market rate’ private construction companies or public sector employees. Can no one in the administration admit that jobs that constantly need federal funding to continue are simply unaffordable, and that creating one year of subsidies to string along public sector union jobs at the cost of TEN YEARS of increased taxes is, to use their favorite word ‘Unsustainable’?

    BTW, there’s a typo in the story – it’s a ‘billion’ dollar plant in SC that Boeing built, not ‘being’.

  • Ken Besig, Israel

    The trouble is that capitalism is perceived as charity because the American government has for years supported that perception publicly and financially. The OWS protesters have been raised with the belief that they deserve to be supported by the government because they have been from birth and they see that so many other people are. Apart from Social Security and Medicare and other essential services, the government supports all sorts of nonsense like poets, artists, museums, crony capitalists who lobby the government, and on and on.
    Capitalism in America has been slowly over the years turned into a form of charity by the government and it will be difficult if not impossible to change that reality.

  • judith logue

    I wish the USA economy problem were so simple as Obama’s so-called “socialistic” Robin Hood approach in the name of a political win. Sally Struthers or even Cain, Romney, Bachmann, Perry, et al are hardly good enough to solve in a few years what has taken years to put in place.

    The polemics of conservative vs. liberal are fun to debate, and fabulous catharsis, for the angst of everyday life. But, I think a more in-depth analysis with more solution-focused thinking and options would be even more interesting, practical, and helpful. How about some of your intelligent practical advice, with actual options, for EITHER AND BOTH liberals and conservatives, Bernie?!
    Just some Goldilox(R)Thinking early in the day.

    • Glen Stambaugh

      Judith, these philosophies are generally polar opposite. One leads to dependency & ruin. Why and how would one do “either or both”? I cannot imagine any practical or intelligent solution to trying both. Note also, that Bernie did not write this.