The Wall Street Journal had a great editorial by Bret Swanson on Friday about how Obama Ran a Capitalist Campaign. Here are the two best points, in my opinion.
First, Obama ran a brilliant campaign. But there is an inconsistency between the policies that Obama is calling for and the way that he ran his campaign:
If Barack Obama ran for president by calling for a heavier hand of government, he also won by running one of the most entrepreneurial campaigns in history.
Will he now grasp the lesson his campaign offers as he crafts policies aimed at reigniting the national economy? Amid a recession, two wars, and a global financial crisis, will he come to see that unleashing the entrepreneur is the best way to raise the revenue he needs for his lofty priorities?
Second, if Obama is going to be effective as president, he should govern from the same principles that were behind the approach he took to his campaign:
The key question now is how will Mr. Obama govern? Will he stick with the policies he ran on or adopt the approach that he won with?
The only way a president can maximize economic growth is to unleash diffuse networks of entrepreneurs. As economist Bob Litan of the Kauffman Foundation says, “Government can’t compel growth.” But Mr. Obama’s plans — “card check” legislation to allow workers to unionize a workplace without a secret ballot election; curbing free trade; a government-led “green economy”; and higher tax rates on capital and entrepreneurs — do not reflect his campaign’s deep trust in individuals.
A thought experiment, Mr. President-elect: What if as your campaign raised more and more money it was taxed away and given to Mr. McCain to level the field? Or think of this: What if you were not allowed to opt out of the public financing scheme that left Mr. McCain with a paltry $84 million, about a quarter of your autumn total?
Well said. This brings to the fore the biggest thing that I don’t understand in the thinking of some highly intelligent people such as president-elect Obama. Here is my attempt to articulate it.
Our nation is built on the premise of decentralized freedom. Democracy is the political embodiment of the truth that human beings flourish most when they are left free. Individuals are better off, and society is better off, not when we try to coordinate people’s efforts through centrally planned programs and policies, but when we give people room to pursue their own interests, create, and invent.
The internet embodies this principle even further. It is a visual manifestation of the power of decentralized networks — which is really what democracy is, and what free-market capitalism is.
Yet, some of the people who best understand the power of decentralized networks — Obama’s remarkable internet-based campaign being a case in point — nonetheless fail to affirm this principle when it comes to economic growth. So instead of applying the same principle of freedom that is behind democracy and the internet to economic growth, their tendency is to opt for more centralized, planned, government-centered approaches to economic policy. And the same could be said about many related issues, such as health care.
That is what I do not get.