We Don’t Need an Investor-in-Chief
How was anything ever invented before government started “investing” in new technologies? One wonders these things, given the seriousness with which Keynesians seem to believe that if they don’t choose the economic winners and then throw large sums of money at them – other people’s money, of course – then there will be no innovation or growth. The latest example of this faulty attitude involves a plan by the President to spend $500 million “investing” in manufacturing, or something:
President Obama on Friday will announce the launch of the Advanced Manufacturing Partnership (AMP), an initiative that would provide more than $500 million to encourage investments in promising technologies.It is the administration’s second initiative in less than a month intended to boost U.S. manufacturing.
…“Today, I’m calling for all of us to come together – private-sector industry, universities and the government – to spark a renaissance in American manufacturing and help our manufacturers develop the cutting-edge tools they need to compete with anyone in the world,” Obama will say, according to prepared remarks.
What do Obama and his bureaucrats know about manufacturing or what “cutting-edge tools they need to compete with anyone in the world”? He doesn’t seem to know, for instance, that we’re already in a manufacturing “renaissance”, in so far as manufacturing output continues to grow to new heights, breaking its own record, year after year.
Perhaps an even better question is: what makes Obama qualified to spend other people’s money better than they would themselves? Government “investments” are necessarily made according to political criteria, as the first priority of a politician is to get reelected, not turn a profit. And in order for these vote-seeking politicians to spend money on their schemes, it must first be removed from the productive sector of the economy, where individuals with actual skin in the game are much better suited to find investment opportunities that will pay off.
If President Obama really wants to promote investment, he should remove the existing disincentives to savings and investment, such as the capital gains, dividends and death taxes, among other destructive taxes on capital formation. Simply put, we don’t need an Investor-in-Chief to direct investment capital to promising sectors and businesses, we simply need government to get out of the way and to stop making it so difficult for private investors to do so in the first place.
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William Greider over at the Nation wrote a short, but wacky piece called Goodbye Keynes, Hello Hoover that’s just so