When did we get to the point that we reject the basic concept of entrepreneurship?

We've all - or at least most of us, depending on our age - have heard the phrase "invent a better mousetrap and the world will beat a path to your door."

It meant that if you came up with a better idea, people would pay for it. It also meant that if you were clever and creative, you could have better success.

This is the core basis of entrepreneurship - something that everyone says we need more of. You come up with a better idea or better way of doing something and you enter the market to see if others agree.

Maybe you find a more economical way to offer a service or process. Because of some innovation you've come up with, you can offer an item at less than what people are already paying.

Maybe your price is the same as what is already on the market, but you've got a better item or one that fits the needs of the consumer better, like in the mousetrap example. Certainly, there are plenty of mousetraps, but if yours does something the others can't, and people like the idea, they'll pay more.

Living by the water, we have mice. I willingly pay more for the traps that don't require me to come anywhere near touching the mouse when caught.

This is what forms the core of our nation and fuels the American Dream. Coming up with a better idea, marketing it and supporting ourselves and our families with the profits ... maybe growing into a large firm with a company and fortune to pass on to our descendants.

But what if government worked against you? What if the politicians tried to stop your innovation?

Yes, I'm referring to those same politicians who talk about entrepreneurship and tout that small businesses are the drivers of our economy, hiring more people than large corporations do.

What if they were doing everything they could to prevent you from offering a better product at a better price?

That's exactly what's happening in Washington, D.C., with Uber.

Uber is company that offers on-demand private transportation in various cities across the United States and Canada. You sign up, use your smart phone to request a ride, a car picks you up and takes you to your destination and they can bill your credit card on file. No more waiting for a cab. No more worry about having cash or credit cards to pay. No need to memorize bus schedules. And probably a cleaner, nicer looking ride. What's not to like?

Apparently, everything - if you're a taxi cab driver or company who now has competition.

So what do you do? You use the power of government to stifle your competition.

As Uber explains:

On Independence Day, Uber announced a roll out of a lower cost service that we call UberX. A less expensive Uber option on an all-hybrid fleet. We’re pretty excited about it and think it’s a great idea for cities across the country. What some of you probably noticed is that there was no roll out of this service in the District. That is because, only days earlier, the DC City Council informed us that they intended to pass an amendment to the taxi modernization bill that would make it illegal for Uber to lower its prices or to offer a low cost service in any form.

The Council’s intention is to prevent Uber from being a viable alternative to taxis by enacting a price floor to set Uber’s minimum fare at today’s rates and no less than 5 times a taxi’s minimum fare. Consequently they are handicapping a reliable, high quality transportation alternative so that Uber cannot offer a high quality service at the best possible price. It was hard for us to believe that an elected body would choose to keep prices of a transportation service artificially high – but the goal is essentially to protect a taxi industry that has significant experience in influencing local politicians. They want to make sure there is no viable alternative to a taxi in Washington DC, and so on Tuesday (tomorrow!), the DC City Council is going to formalize that principle into law.

This isn't just in DC - it's here in Ohio, as I detail at Ohio Watchdog: We're just a bunch of hapless rubes. Whether it's duct cleaning, roll-your-own cigarettes or food carts, government has become nothing more than a tool to be used against potential business competitors or to accomplish what your fail to achieve at the bargaining table (unions) or elsewhere (various non-profit groups who lobby for funding).

When did our government become a tool for stopping entrepreneurship? Why would any person who swore to uphold the Constitution of the United States think it acceptable to wield the regulatory power to protect an industry from competition. Why would any elected official agree to measures that actually hurt the very people they're supposed to serve? Why would any governmental body think it is okay to 'screw the public' by insisting that you pay higher prices - for anything?

These are rhetorical questions. I know the answers - I just have a hard time believing our nation has come to this point.

Quotes of the Day - Milton Friedman

These quotes are from Nobel Prize-winning economist Milton Friedman.  This first one points out a key difference in perspective on government:  one that sees government as a master to be served vs. the view that government is a tool to protect our rights. 

"To the free man, the country is the collection of individuals who compose it, not something over and above them. He is proud of a common heritage and loyal to common traditions. But he regards government as a means, an instrumentality, neither a grantor of favors and gifts, nor a master or god to be blindly worshipped and served."

This quote goes to the heart of anti-capitalism:

"The key insight of Adam Smith's Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another."

Quote of the Day - capitalism and compassion

“I believe in capitalism. The reason: capitalism confers its greatest benefits on those at the bottom of the income ladder. If I didn’t believe that, I wouldn’t be a capitalist. And Milton Friedman thinks the same way.” ~ Gary Becker, Nobel laureate and University of Chicago economist

If you don't understand the problem, your solutions make things worse

I don't know if you saw this, but if not, you need to! It's a graph comparing the private sector experience of presidential cabinet appointments since 1900 - and it shows that President Barack Obama's cabinet has significantly less business experience than his predecessors.

It's probably no surprise that Republican presidents drew heavily from the private sector, while just under 30% of President John F. Kennedy's cabinet had such experience. But Pres. Obama doesn't even reach 10% - and that lack of experience and understanding of what it takes to create jobs and wealth clearly shows in his policies and actions.

As this post on RedState.com explains:

This ignorance of what drives the private sector was proven by Barack Obama himself this week, at his so-called “Jobs Summit,” where the POTUS stated:

Despite the progress we’ve made, many businesses are still skittish about hiring. Some are still digging themselves out of the losses they incurred over the past year. Many have figured out how to squeeze more productivity out of fewer workers. And that cost-cutting has become embedded in their operations and in their culture. That may result in good profits, but it’s not translating into hiring and so that’s the question that we have to ask ourselves today: How do we get businesses to start hiring again?

Heaven forbid! Productivity? Profits? Does Mr. Obama believe that businesses exist to hire people? I’m sorry, sir, but it is ALL about the profits. Productivity, and in turn, profitability, is improved either by enabling a constant number of people to produce more, or by reducing the number of people and maintaining constant production. New hiring may improve producTION, but not necessarily producTIVITY. Obama’s ideology, like that of his staffies, is disconnected from the realities of a capitalistic economy. And the policies he supports are similarly disconnected.

And now we come to the by-product of the Administration’s disconnect on private sector economics. If the policies of Barack Obama are truly damaging to business, we would expect to see that demonstrated in the marketplace. And indeed we’ve seen it.

The author then details three strikes against the Obama administration, including comments and statements from various CEOs that prove the damage the policies are doing to our job market.

And now the President thinks that the only way to address the economy is to spend our way out of the problem - failing, again, to recognize that government spending is a primary part of the problem and that more spending won't make it better.

But what do you expect from someone who's never had a 'real' job, had to make a payroll, show a profit for shareholders or meet the demands of a market?

We've 'hired' a man to run an organization without acknowledging that he'd never run an organization before - and in fact didn't know how. Now we're dealing with the consequences of putting in charge someone who thinks the economic system which brought us so much prosperity is evil and needs to be destroyed. We should not be surprised that the outcome is less jobs, more government intrusion and control, more taxes for us and the end of our liberty as we know it.

***Side Note: Pres. Obama's statement above reminded me instantly of some students I once met.

As a commissioner, I attended the first and last class in a special program for high school students - students who were having so much trouble that this program was a sort of last resort. In the first class, they were asked why companies exist. Their answers were 'to give back to the community,' 'to give to charity,' and 'to give me a job.'

I was astounded by the basic lack of understanding that a company exists to make a profit for the owner/investors. Of course, these students with this attitude were not going to make good employees and, eventually, get ahead, because they had no understanding of the economic system and how being valuable to the bottom line would advance them.

Fortunately, by the end of the class, these students were highly impressive. They expressed and demonstrated an understanding of the free market system and how they could use that system to better themselves. They were able to greet me professionally and make a very good impression - something they would have thought was ridiculous at the start of the class.

I bring all this up because the problem starts in childhood when we do not teach the basics of how our free market works - and how it can help people achieve their goals.

Perhaps Pres. Obama should take the class.
***

Things I'd blog about if I had all day

* There's an interesting analysis of the Van Jones resignation and what it says about President Barack Obama and his administration in the Washington Examiner. While I was driving yesterday, I heard Rush Limbaugh's take on this as well.

Both author Michael Barone and Limbaugh questioned how someone like 'green jobs' czar Van Jones, a self-avowed 'truther' could end up in the Obama administration, especially given his other beliefs and associations. Could it be that the Obama administration didn't know? Or is it that they knew, and approved?

Either way, it spells long-term trouble for the president. If he didn't know about Van Jones, what else doesn't he know about the other czars in his administration who are in charge of multiple initiatives and public funds? If he did know and brought him in anyway, is it an indication of Obama's belief in and/or support for such theories or philosophies?

Perhaps only time will tell.

* This same article also had an interesting opinion on 'green jobs' which I fully share:

"If there were money to be made in green jobs, private investors would be creating them already. In fact big corporations like General Electric are scrambling to position themselves as green companies, gaming legislation and regulations so they can make profits by doing so. Big business is ready to create green jobs -- if government subsidizes them. But the idea that green jobs will replace all the lost carbon-emitting jobs is magical thinking."

I only hope our local mayoral candidates will remember this fact about the free market.

* Michael Moore's new movie premiered this week and basically says that capitalism is evil. Here's my question for all candidates, especially those who say they are Democrats (as that party has embraced this filmmaker and his films): Do you agree with Michael Moore that capitalism is evil?

The answer to that question will tell more about the candidate than any policy or position paper or press conference.

I'd also like to know what the everyday Democrat thinks of this opinion? Is this really what my neighbors, who are registered as Democrats, think of our economic system?

Or is that some people are evil and do bad things - and that even good people will make bad (evil) decisions?

* There's been a lot of discussion about the conservative opposition to the health care bill and government-run health care versus Medicare and Veteran's Services health programs.

Here's the thing: I oppose the concept of Medicare and of the government forcing our Veterans to use a government-run program for their health care needs. I can find no authorization in the Constitution (except the 'general welfare' clause which our founders specifically said should not be used as a catch-all for anything government wants to do) for such programs.

However, individuals have participated in and paid into the Medicare program and expect a return for that investment and promise. So it wouldn't be 'fair' or 'right' to suddenly eliminate a program people are participating in, or expect to provide for them in the future.

There is another way, though, that those on the left fail to consider. Instead of continuing to collect the money from today's payers in order to fund yesterday's enrollees (which is causing the bankrupting of the system as it goes broke), modify it so that the individuals get the funds back and make the decisions about how to spend those funds on their own. That way, they get more purchasing power for their money since the government isn't taking its share (for government salaries, program administration, etc...) right off the top.

What would happen if we suddenly returned to the individuals their portion of what they'd paid in and then said, 'we trust you to make good decisions that are in your best interests without us telling you what to do?' Or would there be too many who truly believe that people cannot make good decisions which is why the government must do it for them?

Again, the answer to that question tells us everything we need to know about the person giving the answer.

* I heard a sound clip on one of the talk shows yesterday about a businesswoman in California at one of the health care town hall meetings - it should be heard by everyone, especially the elected officials.

What go her so upset to begin with was that she had taken the time to call and write her representative. But she said that when she did so, she got a form letter response saying 'thank you for your support', which obviously indicated no one had really read what she'd written; or she was condescendingly told by staffers that the representative really knew better than she did.

Her point was that as a business owner, there were two things Congress could do immediately to help 'solve' the claimed health care 'crisis': 1) tort reform and 2) open up the market between states. She then said something startling: there are 1,300 insurance companies in the nation but only six that are available in California for her to choose from.

Can you imagine? Over 1,300 companies that could be offering plans and competing for our business, but only six that Californians can select? I have no idea how many there are in Ohio, but could it be a similar amount?

Opening up inter-state competition wouldn't cost a thing. And it could be done by Congress pretty much immediately. Why not try it and see if providing such immediate 'choice and competition' would have any effect before setting up huge bureaucracies to 'provide choice and competition'????

The only reason why that would be opposed would be in lawmakers thought they'd somehow lose either control, power or campaign funds in doing so.

It's an instant way to provide exactly what they say they want to provide without costing taxpayers a single penny. Why wouldn't they do so if 'choice and competition' were truly the goal?

* Hourglass 1941 blog has a second video of Rep. Mary Jo Kilroy refusing to answer questions about H.R. 3200, America's AFfordable Health Choices Act of 2009, will be paid for. Instead, she walks away. She should either admit she doesn't know or explain how the bill will be funded. Perhaps she just afraid that doing either would look worse than just walking away?

Calling it 'capitalism' doesn't make it so

In a recent New York Times column, Richard W. Stevenson wrote:

In a series of comments in recent weeks, Mr. Obama has begun to sketch a vision of where he would like to drive the economy once this crisis is past. His goals include diminishing the consumerism that has long been the main source of growth in the United States, and encouraging more savings and investment. He would redistribute wealth toward the middle class and make the rest of the world less dependent on the American market for its prosperity. And he would seek a consensus recognizing that an activist government is an acceptable and necessary partner for a stable, market-based economy.

The article, 'Redefining Capitalism After the Fall,' reminds me of George Orwell's 1984 wherein the definition and meaning of words are modified by government. Just like the old joke: "How many legs does a dog have if you call its tail a leg? Four - calling it a leg doesn't make it so." If you take socialist-type practices and call them capitalism, it doesn't mean it's capitalism.

But let's look at what Pres. Obama has suggested.

"His goals include diminishing the consumerism that has long been the main source of growth in the United States, and encouraging more savings and investment."

There's a lot to be said for encouraging individuals to save and invest. However, such an approach is completely contrary to what government has done. Congress, under both Presidents Bush and Obama, has taken various steps to encourage spending - everything from direct 'stimulus' checks (which didn't 'stimulate' the economy) to the latest 'stimulus bill' which borrows against future generations in order to spend now.

How do you say people should save and invest when you are encouraging them to do the exact opposite? And if saving and investing is good in the long term, why are we not encouraging such activity now? How can people (or government) borrow now, incur huge debt and then expect to have any money left over to save in the future?

"He would redistribute wealth toward the middle class..."

Well of course he would. He said exactly that to Joe the Plumber. The problem with this scenario is, as Margaret Thatcher said, eventually you run out of other people's money. Under such schemes, the threshold of whose wealth is 'redistributed' continually goes down, meaning that those 'middle class' people who think they're going to be getting someone else's wealth find themselves classified as 'wealthy.'

As it is, Obama has said that 'rich' starts at earnings of $250,000. According to the most recent data from the IRS (2006), the top 10% of filers, those earning more than $108,904, paid more than 70 percent of all taxes. If you have two union members in a household working overtime, it is very likely they earn enough to put them into the top 10%. If the top 10% are paying 70% of all taxes, that means that 90% of the people are paying only 30% of the bill. How much more does wealth need to be redistributed?

Obama also wants to:

"...make the rest of the world less dependent on the American market for its prosperity."

While I certainly want other nations to be economically successful, I still want them to depend upon the American market. We live in a global economy and I want other nations to depend upon the American market. I want the United States to be in the driver's seat when it comes to the economy. I want our citizens to be the client the world's businesses want to satisfy. But the way to do that is through capitalism - not through a mandated version of what government thinks we want or need.

Finally, Obama says he:

"...would seek a consensus recognizing that an activist government is an acceptable and necessary partner for a stable, market-based economy."

Well that's not capitalism, which is precisely the point. The last thing our founders had in mind for this nation was an 'activist' government. They saw the results of 'activist government' and fought a revolution in order to free of us from such oversight.

Just look at the words: 'activist government' and 'market-based economy.' If government is determining the economy, it cannot be 'market-based.' Either the market determines the economy or government does. And you cannot redefine capitalism to remove the market-based aspect and replace it with government-based and still have 'capitalism.' Socialism or fascism, maybe, but not capitalism.

Leftist like to say that the so-called 'failure' of the economy is a result of our capitalism, failing to realize that the U.S. has moved so far from a free-market economy due to government interference, regulations, subsidies, support, etc. It isn't the failure of a free market that brought us to today's economy, it is the idea, practiced in many areas, that government can dictate to that free-market and still have a free market. If government hadn't mandated loans to individuals not determined, under normal circumstances, to be qualified, do you really think the burst of the housing bubble would have been so severe? When you order banks to consider unemployment insurance payments as income, is it any wonder that people who didn't have a job had trouble making their loan payments?

Of course, leftists also believe that the solution to problems government created is...more government.

Additionally, capitalism includes the possibility and consequences of failure - something government has now determined to prevent, via bailouts, loans and the 'too big to fail' concept. That's not capitalism, either, as capitalism requires reward commensurate with risk. If I risk nothing because I have a government willing to bail me out, I'm likely to take on riskier propositions. The situation becomes worse as a result of government guarantees against suffering the consequences of severe risk, i.e. failure.

Of course, the 'government' really isn't doing this. We, the taxpayers are - those same taxpayers who wouldn't invest their own personal funds in such endeavors are doing so, through taxation and distribution by government, after the failure has been achieved.

Again, that's not capitalism and calling such doesn't make it true.

It is these types of goals and ideas that have so many Americans worried and concerned over the future of their nation. While we're not a socialist country, yet, we see signs that we are moving in that direction and when Pres. Obama says those are his goals, is it any wonder every day citizens took to the streets to protest such aims at the Tea Parties?

For more on the free market, I highly suggest this article from the Foundation for Economic Education.

A majority believe capitalism is better than socialism

Rasmussen is reporting their latest poll that says 53% of those surveyed believe that capitalism is better than socialism.

They found that 20% believe socialism is better and 27% are not sure.

But the scary part of the poll is when they break the numbers down by age.

"Adults under 30 are essentially evenly divided: 37% prefer capitalism, 33% socialism, and 30% are undecided. Thirty-somethings are a bit more supportive of the free-enterprise approach with 49% for capitalism and 26% for socialism. Adults over 40 strongly favor capitalism, and just 13% of those older Americans believe socialism is better."

These numbers have got to be a result of the several factors, including the education children have gotten and the lack of historical perspective that young people often have.

I can only conclude that we've stopped teaching the consequences of socialistic economic systems in school - that such systems have failed every time they've been tried. Or that such systems are touted as equally valid under the moral relatively viewpoints. Or that such systems result in 'social justice' and are therefore to be desired for promoting 'common good' over individual responsibility and achievement.

Perhaps this difference in opinions by ages is to be expected. They old saying goes that if you aren't liberal when young, you have no heart and if you aren't conservative when older, you have no brain. Maybe, as they grow older, become investors (who choose capitalism by a 5-to-1 margin), and have the perspective of world history, they will change their minds.

One can only hope.