Capitalism is By Far the Best Economic System

If you owned a factory that manufactured steam locomotives you wouldn’t have much luck staying in business these days. Markets change, technologies change, products become obsolete or noncompetitive in the marketplace, factories close due to foreign competition, factory owners die, companies move overseas, etc.

In other words there are natural forces that are always acting on the economy. There is nothing that we can do about them. If diesel-electric locomotive technology replaced the steam locomotive by being vastly more efficient and sensible, then that’s it – game over.

If you are more than 50 years old you remember when IBM was the king of computers. Back in the 1960s the letters IBM were recited with awe. Today you hardly hear about IBM. Meanwhile Wang Computers, Studebaker cars and the CB radio also have disappeared. And electronic ping-pong, the first widely-played computer game, today looks like something from the Stone Age. They were all casualties of naturally and rapidly changing times.

The Ancient Greek philosopher Heraclitus said that the one certain thing is that we are in a constant state of change. And we all know that if we don’t accommodate that change that our economy will suffer. That is why companies must change with the times and seek to ward off the harmful forces acting on them. Sometimes they succeed and live on for years or decades, but other times they stagnate and close.

Unfortunately businesses also are up against destructive man-made forces that are direct and intentional products of socialism. These forces include excessive taxes and regulations imposed by government; artificially high wages and ridiculous work rules imposed by labor unions; corruption and bureaucracy in government; and widespread environmental overregulation.

To eliminate these harmful man-made forces we should simply eliminate the Democrat party ideology, which would help us all. And then we could have vastly greater freedom and prosperity since free-market capitalism is ruled by natural economic laws and historically has produced vastly more jobs and prosperity, creativity, happiness and optimism than socialism ever has.

(Advertise on Nikitas3.com! Contact me through the Contact Me button above. Thanks)

This is why Americans are flocking by the tens of millions to the conservative states like Texas and Georgia, and why Democrats are left with control of the increasingly miserable liberal states like New York and Vermont that are losing their younger, skilled and educated populations and are becoming older, poorer and sicker… just the way liberals want them, so that they are easy to control.

We conservatives and capitalists recognize that creating jobs and wealth is hard work. That is why the whole world is not rich; creating wealth requires brains, capital, diligence and some luck too. It also requires as much freedom as possible. We know that prosperity cannot survive when government exerts more than a modicum of control.

Just look at the utter despair in government-controlled communist North Korea with its widespread poverty, oppression and starvation after communism has been described for more than a century as utopia. Meanwhile capitalist South Korea, just over the border and closely allied with the United States, has modern living standards as high as anywhere in the world with an open economy and free elections.

Then we get relentless whining from liberals about “tax inversions” and “corporations shipping jobs overseas”, that somehow these are the result of greedy companies operating in a free global economic environment and choosing to depart the US in the name of profit. Yet there are good reasons for both actions:

Tax ‘inversions’ happen when US-based corporations are sold to foreign owners that move the company headquarters out of the US to escape high taxes here. Yet this is nothing more than a natural reaction to high costs imposed by government. There has been a significant exodus of companies in the last 5 years as the US corporate tax rate has soared to the highest in the world.

There is a simple solution: Lower the US corporate tax rate which now is 35%. Even tax-crazy Japan lowered its rate. A lower rate encourages companies to stay here or to come here to do business, bringing jobs and prosperity with them. But Democrats keep the rate sky-high and then complain when companies leave. This is psychotic behavior. Why do they do this?

Answer: Because socialism is not about “solving” problems as it claims. Socialism is a system that adheres to a strict ideology – like always imposing more and more taxes – even though this ideology always creates problems. Socialist politicians then complain about the problems that they themselves created in order to get people riled up and to get their votes. It is a vicious cycle.

If Democrats actually cared about American jobs they would start by helping to lower the corporate tax rate to keep jobs here. But they never will. They will only go in the opposite direction because that is their template. The rate would be 75% if most Democrats had their way. And then they would complain even louder about the flight of businesses and corporations to lower-tax nations.

How about the charge that US corporations are “shipping jobs overseas”?

Well, they sometimes do, like the US auto companies Chrysler, General Motors, and Ford which have been building foreign plants for decades. These companies have been expanding overseas importantly for two reasons – the increasing US tax rate imposed by Democrats; and to escape crushing labor costs imposed by American labor unions which are allied with the Democrat party. These high costs are the reason that Obama had to bail out General Motors and Chrysler in 2009.

Labor unions ran the US freight railroads and the US steel industry into collapse in the 1970s with outrageous wage demands, farcical work rules and endless strikes. The railroads have since rebounded strongly under free-market deregulation called the Staggers Act of 1980.

And while steel production fled overseas in the 1970s it now is reconstituting in places like Pennsylvania, Ohio and Indiana. One of the significant and profitable new US steel producers today is called Steel Dynamics, with 6,300 great jobs.

And who funded and guided the startup of Steel Dynamics? It was Republican Mitt Romney, through his Bain Capital investment firm, the firm that liberals trashed throughout the 2012 presidential election.

On the other hand “transplant” companies like BMW from Germany, Hyundai from South Korea, Airbus from Europe, and many others, are building manufacturing plants here in the US, but in the non-union, low-tax South, making excellent products, earning profits and paying great wages and benefits.

The Southern workers do not even want the unions. They know that the unions would kill their jobs and their companies, just as unions killed almost the entire post-World War II industrial infrastructure of America with confrontation, strikes, violence and unsustainable wage demands.

Nikitas3.com knows about this from personal experience. The unions drove the major employer, General Electric and 11,000 jobs, out of my Massachusetts hometown with decades of strikes and confrontations. The unions were warned for years to end the confrontation, but they just pushed the accelerator to the floor with the Democrat party cheering them on.

Government corruption also kills business and jobs. This is why there are no jobs in inner-city black America, which is controlled with an iron grip by the most corrupt elements of the Democrat party.

Meanwhile rural Americans are experiencing massive job losses because environmentalists are destroying opportunity with endless lawsuits, regulations and obstructions, all man-made roadblocks to jobs and prosperity.

This entry was posted in Current Events (More than 1,500 previous editorials!) and tagged , , , , , , . Bookmark the permalink.