A step in the wrong direction
One of the emails on my computer Wednesday after the election read, “Obama wins, Financials Dive.” The DOW index dropped 303 points the day after the election. I took it as a confirmation that investors have little confidence in the president’s fiscal policies. It’s pretty easy to realize what side of the fence I stand on. I watched the election results to the bitter end last Tuesday night. I suppose it wasn’t a big surprise that Obama was reelected for another four-year term, but I am perplexed about what this country is about. Clearly we have a social makeup that has changed and people expect more from government—a lot more.
Just two weeks ago, my wife and I were in Italy visiting all her aunts, uncles and cousins. I don’t speak any Italian but my wife does and she served as my interpreter. The economy in Europe is in tough shape. I don’t think the U.S. has endured anything like they have in Europe or Italy. The EU has about 18 million people unemployed and any job they get is, for the most part, short term. And many of her cousins said that they don’t expect to see the economy get any better.
Our governance problems here in the U.S. are nothing compared to Italy’s. It is a country of 70 million people and they have a legislative body of 900 people; we have 545 people in our legislative system and a population of 320 million. If I were king for a day, the first thing I would do is get rid of at least 600 of Italy’s legislators. One thing I’ve learned over the years is the larger your legislative body is, the more legislation, more laws, more regulations and more government there will be. And I was told that 100 of their legislators have been indicted for fraud. There is a lot of corruption within Italy’s government and the Mafia is alive and well.
One of the main topics of discussion with my Italian family was their government pensions. They are good middle class folks who are very generous. Government pensions are vital to them and they have grown to depend on government to maintain their life. Their pensions aren’t large, but as they put it, large enough to survive on, and with free health care, they do live a long time. One uncle was 102 years old and after mandatory retirement, he has been retired for 42 years. He is fortunate because he has a private pension along with the government pension.
The younger part of the large family was also concerned about pensions and the effects of inflation and a declining euro. They have lost considerable buying power.
We wanted to help the older side of the family and went grocery shopping for them. I purchased a half a tenderloin for them, assuming they don’t eat much beef and little tenderloin. I showed them how to cut it, but they wouldn’t go along with an inch and a half steak so we settled on a half inch, then they killed it by cooking it to well done.
Some of the family run small businesses and told us how difficult it was to operate with high taxes and high social and regulatory costs. One of them sold their bar to become just a bartender because he would earn more. Small independent business is under tremendous pressure from the government and the risk reward equation is out of balance because of government’s heavy hand. Many of them said they were working harder and earning less, which is a familiar American problem. They don’t have much hope that things will improve soon, if at all.
Our Italian family would be fairly typical of most middle class western European families. There is, without a doubt, income redistribution and a heavy dependence on government social programs. After spending two weeks in that environment, it codifies my thoughts that the western European type government is a tremendous burden on society. The government consumes far too much of the wealth, which doesn’t provide their citizens much opportunity to start businesses, create jobs and create wealth.
Our recent election of Barack Obama allowed us in America to take one more step towards a western European style of government. ObamaCare, new tax schemes and Obama’s views on class warfare and income redistribution all confirm my view.
When it comes to managing an economy, I feel that the people will do a better job than government. Big government is unaffordable and inefficient. I’m for more states’ rights and getting more decisions made at a local level on both social and fiscal issues. One thing for certain, governments can’t have good social policies without sound fiscal policy. And governments can’t manage markets; no one can. — PETE CROW