(Centennial Fellow) There is much doom and gloom out there in the economy. Many say America’s best days are over, and that we will be eclipsed by Europe or China. That just will not happen.
Thirty years ago everyone talked about how America was in decline, that Japan would pass us. That was until the Reagan administration turned our country back toward free markets (allowing greater innovation and a technological revolution), while Japan hit a glass ceiling (their production possibility frontier).
Europe’s economic problems are currently worse than ours (a deeply embedded culture of socialism and a dismal birthrate). China will soon hit their glass ceiling, caused by a lack of freedom (they still have a communist bureaucracy) and geographical disadvantages (having only one coast, while Siberia and the Himalayas define their other borders).
What we need to do is vote Obama and his ideological cronies out of office, which will happen next year. Then we can turn again to free markets, freeing our economy to soar once again. This can be done by lowering (if not eliminating) capital gains tax, lowering (if not eliminating) oppressive regulations, and begin drilling once again for oil (in Alaska, off our coasts, anywhere it can be found). All of these things were done by the Reagan administration in the 80s, the last time our nation rebounded from lethargy.
President Obama often claims he “inherited” a bad economy from the Bush administration. Nonsense! Financial markets don’t trail after events; they are leading indicators. They move by expectation of what the future will bring. The closer Obama got to the White House, the more cash was moved out of markets into someplace where socialist-minded bureaucrats couldn’t seize it, and the more investors panicked about what the economy would look like with an intrusive government pushing a left-wing agenda. Some may say I am ignoring the housing crisis, but that too was caused by excessive government intrusion.
The good news is that America is resilient. We are a free people who can succeed, if the government doesn’t get in the way and punish the successful while rewarding the indolent. Socialism has not yet produced the culture of entitlement in America to the degree that it exists in Europe. We also have great ports on two great oceans, military domination of the seas and air, reasonably stable borders, and a constitution which protects its citizens from government tyranny (if we care to keep it).
Don’t sell America short. We will rebound, if we can move once again to free markets. The year before Obama became president was a bad time to invest in the market, but the year before his removal will be a great time to get back in. As investors become more confident in America’s recovery, they will take the money kept in reserve and reinvest it, but only after they regain trust once again in a free America.