Sunday, September 19, 2010

The Great Divide?

As election season comes rushing up in early November, the rhetoric from the left and right is increasing in amount and volume. The problem with our electorate is that many people seem to coalesce around a single idea or react to what is happening now that bothers them. The politicos know and understand this and blast  messages aimed at this discomfort. The changing demographics of our country (older) are driving the political landscape and discussions in regards to underfunded entitlement programs, health care issues and education. Lots of blaming people (GWB) for all of our problems but in reality all of this is simply a smokescreen to drive agendas that result in a shifting of financial resources from one group of people to another. The real choices are around whether one believes that government is better suited to take care of all of our needs or is a system of incentives and free markets better suited to serve all of the people? This country was founded on the idea of the right to make choices free of government intervention. Do some people win and some people lose in this system? Yes but the losers still do pretty well on a comparable basis to what other countries in the world offer. In a perfect world people the idea of government supplying all basic services though heavy taxation is appealing to many but the problem today is globalization which at the core means the free flow of capital to where is can best be deployed for a return to the investor. Onerous regulation and taxation will chase capital and investment to other parts of the world and the UAS will become even more uncompetitive than we are in many industries. Is our current President pro business or not? His supporters say yes but I would argue that he does not even understand business having never been involved with one and had to risk his own capital and navigate the layers of regulation, requirements and taxation in order to operate successfully. Policy decision at the federal level in the 90's lead to the collapse of the housing and mortgage markets which had gotten totally out of control. So now the markets readjust those asset classes and price them where they should have been in the first place. This is painful for those who made poor decisions and over extended themselves. Whose fault? It does not matter. What matters is how we as a nation respond to these issues and so far we have not responded very well. Time will tell how well the Obama administration is perceived to have reacted to the challenges they have had to deal with. I think that his lasting legacy will be "It was all George Bush's Fault". Hmmmm. Always blaming others.
So do we have a great divide between the rich and poor- with no middle class? Does it really matter? Socialist countries have few rich because they leave to pay lower taxes elsewhere. Is life better there? The standard of living today in the USA is far greater, across the spectrum, than it was 20 years ago, 40 years ago and 80 years ago. Life expectancy is continuing to rise each year, and new businesses are created every day that employ thousands of people and create valuable products and services. Do we want to lose that here in America? I hope not. So the real decision is do we want the freedom of choice or do want to have the government take care of us? Whichever you think is the best model, there is a candidate. It will be interesting to see what the American people want when it come right down to making the choice.

No comments:

Post a Comment