SOMEBODY Had To Do It!
In these crazy times, when the whole world looks to government to save us from our poor decisions, when even some conservatives get all squishy and hope for a bailout of, say, General Motors (oh, um – that was me, wasn’t it?), when the leader of France scoffs at those crazy Americans and their love of capitalism, it’s about time someone stood up for free markets. And, yes, record low approval ratings and all, it was my beloved President Bush who finally said what needed to be said:
…[W]e must recognize that government intervention is not a cure-all. For example, some blame the crisis on insufficient regulation of the American mortgage market. But many European countries had much more extensive regulations, and still experienced problems almost identical to our own.
History has shown that the greater threat to economic prosperity is not too little government involvement in the market, it is too much government involvement in the market. (Applause.) We saw this in the case of Fannie Mae and Freddie Mac. Because these firms were chartered by the United States Congress, many believed they were backed by the full faith and credit of the United States government. Investors put huge amounts of money into Fannie and Freddie, which they used to build up irresponsibly large portfolios of mortgage-backed securities. And when the housing market declined, these securities, of course, plummeted in value. It took a taxpayer-funded rescue to keep Fannie and Freddie from collapsing in a way that would have devastated the global financial system. And there is a clear lesson: Our aim should not be more government – it should be smarter government.
All this leads to the most important principle that should guide our work: While reforms in the financial sector are essential, the long-term solution to today’s problems is sustained economic growth. And the surest path to that growth is free markets and free people. (Applause.)
This is a decisive moment for the global economy. In the wake of the financial crisis, voices from the left and right are equating the free enterprise system with greed and exploitation and failure. It’s true this crisis included failures — by lenders and borrowers and by financial firms and by governments and independent regulators. But the crisis was not a failure of the free market system. And the answer is not to try to reinvent that system. It is to fix the problems we face, make the reforms we need, and move forward with the free market principles that have delivered prosperity and hope to people all across the globe.
Like any other system designed by man, capitalism is not perfect. It can be subject to excesses and abuse. But it is by far the most efficient and just way of structuring an economy. At its most basic level, capitalism offers people the freedom to choose where they work and what they do, the opportunity to buy or sell products they want, and the dignity that comes with profiting from their talent and hard work. The free market system provides the incentives that lead to prosperity — the incentive to work, to innovate, to save, to invest wisely, and to create jobs for others. And as millions of people pursue these incentives together, whole societies benefit.
Free market capitalism is far more than economic theory. It is the engine of social mobility — the highway to the American Dream. It’s what makes it possible for a husband and wife to start their own business, or a new immigrant to open a restaurant, or a single mom to go back to college and to build a better career. It is what allowed entrepreneurs in Silicon Valley to change the way the world sells products and searches for information. It’s what transformed America from a rugged frontier to the greatest economic power in history — a nation that gave the world the steamboat and the airplane, the computer and the CAT scan, the Internet and the iPod.
Ultimately, the best evidence for free market capitalism is its performance compared to other economic systems. Free markets allowed Japan, an island with few natural resources, to recover from war and grow into the world’s second-largest economy. Free markets allowed South Korea to make itself into one of the most technologically advanced societies in the world. Free markets turned small areas like Singapore and Hong Kong and Taiwan into global economic players. Today, the success of the world’s largest economies comes from their embrace of free markets.
Meanwhile, nations that have pursued other models have experienced devastating results. Soviet communism starved millions, bankrupted an empire, and collapsed as decisively as the Berlin Wall. Cuba, once known for its vast fields of cane, is now forced to ration sugar. And while Iran sits atop giant oil reserves, its people cannot put enough gasoline in its — in their cars.
The record is unmistakable: If you seek economic growth, if you seek opportunity, if you seek social justice and human dignity, the free market system is the way to go. (Applause.) And it would be a terrible mistake to allow a few months of crisis to undermine 60 years of success.
Well said, Mr. President, well said…and way to make the most out of one of your last major speeches…
Exactly whose arguments is he addressing here? What segment even of the Democratic Party is saying, “You know what didn’t work here? Free markets! Let’s not have those any more” ? I also like that he falls back on the usual Republican dichotomy: Asian economies good, European ones bad. Never mind that they have more in common with each other than either does with us. And never mind that European economies have far more in common with our economy than they do with the Soviet Union or Cuba. There’s demonization to be had here, folks! No time for rationally explaining the choices we face!
The arguments, not uniquely offered by the Left, that include the phrase “the culture of greed”. Included on the list are Obama, McCain, and a long list of other politicians and pundits.
“And there is a clear lesson: Our aim should not be more government – it should be smarter government. ”
He didn’t say, “And, on January 20th we will take the first step on that path”.
“And the surest path to that growth is free markets and free people. (Applause.) ” 1% of our country is behind bars.
“Free market capitalism is far more than economic theory. It is the engine of social mobility — the highway to the American Dream. It’s what makes it possible for a husband and wife to start their own business, or a new immigrant to open a restaurant, or a single mom to go back to college and to build a better career. It is what allowed entrepreneurs in Silicon Valley to change the way the world sells products and searches for information. It’s what transformed America from a rugged frontier to the greatest economic power in history — a nation that gave the world the steamboat and the airplane, the computer and the CAT scan, the Internet and the iPod. ”
Um, I’m pretty sure the Internet “came from” the government. Same with aeronautics research. Whatever, though, even if we assume that away as muddy water, “free market capitalism” is not necessary, only the “capitalism” part. Our market has been anything but free. The government NEEDS TO BE INVOLVED with projects that require a large amount of infrastructure. Like, say, airplanes (require a huge footprint and clear airspace, security [now at least]). You think everything would just function perfectly without an organization like the FAA/TSA? Screw it, we don’t need to regulate airplanes! And, in a communism, if you want to make a restaurant, I’m sure there would be a need for such a place (he must really like that mexican food down in Texas).
Free markets allowed Japan…? What? Have you ever heard of the keiretsu? You could argue that is what caused their stock market crash in the late 80s, and you would be partly accurate, but there were plenty of other factors that really wreaked havoc (like when WE got involved).
This simplistic history of how all the technological breakthroughs have come about has nothing to do with the type of ‘ism’. It has to do with increased productivity from computers, superconductors, ease of manufacture of all kinds of stuff, mechanization of tooling, etc., etc., etc. Automation got all the industrialized nations where they are. Human beings and their ideas are the root, not the government structure.
Funny, nowhere in there does it mention the positive effects of that stimulus package…probably “prevented” a recession by cooking the books. Or postponed it until Barack gets into office. Will the right buy it when he says “I inherited a recession”?
Hmmm…as I suspected, a bunch of socialists around here (I kid, I kid – or do I?). Look, Ryan, you’re misreading the context. Bush spoke on the eve of the G20, where he is about to meet with some Europeans who are, in fact, denigrating free markets, much like Mike here, who kind of destroys your argument that no one on the left is saying these things, by the way. I gave you a link to look at what the French leader is saying, from the Economist, no less. If you haven’t read it, I suggest you do so.
I maintain that it is absolutely essential for the American president to defend free markets. Obama had better be prepared to do the same, or I will drop my support of him quicker than you can say “protectionist”. Does that mean no role for government? Of course not. But if this country loses its love of economic freedom, it loses just about everything…
And European capitalism looks nothing like British or American capitalism – we’re far more simpatico with Asian versions. The Europeans are heavily regulated, with a lot of nationalized industries and protectionism – and Bush’s point was that the Euro Zone area officially went into recession quicker than we did, so the much-vaunted increased regulation is not the panacea some think it is…
I’m not “on the left”. I just hate dogma in general. I hate classifications that are used incorrectly. I’m a stickler for that for some reason. And, stick to my words, not the ones you put in my mouth. “Free markets vs. socialism”…while in theory these might be mutually exclusive, in practice you can take elements from both and have a perfectly good nation. I’d say we’re more free market than not, but I personally don’t care what government programs my elected official wants to fight for, as long as they serve some purpose to a fairly large portion of the country. Charities and other privately funded programs are great and all, but if the federal government figures a good way to use my money that serves a large portion of the population, they can certainly have it if it actually works.
http://www.cnbc.com/id/27719011
4+trillion. That’s 1/3 of our GDP.
Just put it on the tab! This is not a left/right thing. This is a not stupid/stupid thing. And the order there is not important. You can’t even compare the situation. Did Europe spend 1/3 of its GDP on postponing impending disaster? I haven’t really been keeping up with their response to the crisis.