They May Hate Capitalism, But They Sure Love To Loot It

by | Jan 19, 2012 | Economics, Taxation

Obama, Gingrich, Perry — they all hate capitalism, but they sure like the loot it gives them to be the career politicians they are. Where would career politicians be without capitalism? Don’t kid yourselves. The liberal-statist agenda is to raise taxes on the wealthiest (who already pay the great bulk of taxes), lower taxes on […]

Obama, Gingrich, Perry — they all hate capitalism, but they sure like the loot it gives them to be the career politicians they are. Where would career politicians be without capitalism?

Don’t kid yourselves. The liberal-statist agenda is to raise taxes on the wealthiest (who already pay the great bulk of taxes), lower taxes on the poor and middle class, and massively expand the welfare-entitlement state, especially for the middle class. The conservatives will only ask, “How are we going to pay for it?” But the real question should be: WHO is going to pay for it? Obviously, those who make the most money are the ones who are going to pay for most or all of it as both taxes and government expand over time. Yet these are the same people who provide the jobs for the great majority of the working and middle class. They are the “capital” in “capitalism.” How does hitting them up for more money help the middle class? The politicians will take the credit for the seizure of wealth and expansion of nice-sounding programs, but those upon whom the middle class and the career politicians depend for their paychecks are going to be burdened ever further. I just don’t understand how this is any kind of solution, any more than a drinking binge for an alcoholic does anything other than (briefly) alter his perceptions of reality.

My fantasy is that the most productive would go on strike on the basis of moral principle and self-defense, as they did in Ayn Rand’s classic “Atlas Shrugged.” I know there’s no chance this will happen. But what will happen is that those who do all the producing for the poor, the middle class and the politicians will become more and more strained in the wallet. Health insurance is straining and even bankrupting many employers, despite the tax credits. ObamaCare is only going to make it worse, because even as more people move to government insurance, taxes are only going to go up.

And, as ObamaCare goes into effect, government is preparing to use even more coercion to force employers to pay. Election outcomes have little to do with these overall trends, because nobody elected into office seems ready to reverse anything. This is all particularly important because America stands on the verge of expanding the already massive welfare-entitlement state from beyond the poor, and into the middle class. This is a HUGE step and an equally huge expense. The gamble here is the unquestioned assumption that the wealthiest who pay almost the entire bill are going to be able to keep producing that wealth to supply untold billions and billions in entitlement money in the coming decades.

Medicare and Social Security are already facing bankruptcy within our lifetimes.

How will much more expensive programs be paid for, and who will pay for them? And this doesn’t even include the hundreds of billions spent on subsidizing the investment bankers and all the other failing businesses.

This is not merely an argument for “fiscal conservatism” or restraint.

It’s much deeper than that. You cannot have capitalism without capital.

The more our government drains our economy of capital, the less capitalism there will be. Government is the vulture — not anyone who runs a business! This means higher unemployment, more bankruptcy, and generally less productivity and economic growth. The world will be a less comfortable and poorer place, as capitalism continues to fade away because of government spending and taxation. We cannot go on like we are.

It doesn’t really matter who’s in charge in the long run. Romney says he’ll do a better job “managing” the government intervention than Obama does, but Obama is the king of government intervention. And there’s no “manager” who can alter the toxic nature of government intervention itself. Government intervention generates more government intervention, and for one reason: People never question the efficacy (or the morality) of government intervention itself. Consider public schools, for example.

Everybody agrees they’re a failure. I know of nobody who claims these schools are even tolerable or adequate, much less excellent. They “guarantee” an “education” for all young people, but at the expense of quality education itself. This “guarantee” is also at the expense of the freedom and individual rights of people forced (taxed) to pay for schools they neither need nor want. The immorality and impracticality of the public school system has led to what is almost universally recognized as a disaster.

But the near-universal cry, when millions of tax dollars didn’t improve things, was to spend…billions of tax dollars instead. After all—isn’t education worth it? Now that billions upon billions of tax dollars don’t seem to be doing the trick…well, we’ll just have to spend trillions.

After all—isn’t education worth it? Where does it stop? I don’t know that it will stop. But I know that it will end. It has to, because federalized, socialized education will necessarily continue to fail, and will necessarily cost more and more money—so long as the premise remains that more and more money must be spent until “we get it right.” At some point, at the end of the road, this means a 100 percent tax-rate on every productive person and enterprise in the country.

In other words: It all has to collapse into a literally communistic form of government, requiring all citizens to work for the sake of the education establishment which always needs more money since it’s always failing. (After all…isn’t education worth it?) Granted, it might not play out this way, but that’s not a tremendous comfort. Why? Because the same irrationality is at work with Medicare, Medicaid and all the other government programs not authorized by the Constitution, and incapable of performing even on their own terms. With each of these programs, as with education, the government must spend more. And as these programs fail one after another, spend even more, and so on, and so on, until you end up at the end of the road: A 100 percent tax rate on everybody.

It may end sooner rather than later, especially in the aftermath of the massive government purchase of billions in bad mortgage debts. It’s amazing that it has gone on as long as it has. A great majority of Americans, with each election cycle, express disgust with “the system”

as we know it; and demand “change.” Democrats, when in power, outspend Republicans; then Republicans, once in power, outspend Democrats. I suppose the next step will be “Independents” outspending both the Republicans and the Democrats. When will people understand that the “system” is nothing more than this continued process of spending more money on things that patently and self-evidently don’t work, even on their own terms?

Insanity, as the saying goes, is doing the same thing over and over again, and expecting different results. We have been doing the same thing for decades, even for a century. “Spend-fail-spend more-fail more.” That’s the cycle. Failure can go on forever, but spending cannot.

As vast and great as human potential is (and as remarkably well as that potential would flourish in a genuinely laissez-faire, capitalistic society), it’s still finite. When government robs the most productive of more and more of their wealth, their lifeblood, their energies, their talents, and does so in the name of “morality”, as Obama does…well, the only thing you can truly predict is disaster and stagnation. Obama sits there in the Oval Office, angry and petulant, almost like a child. Bush is long gone. The Tea Party is impotent. Yet he has to blame somebody.

If he could speak freely, he would say, “Well, I’m being moral. We’re all our brother’s keepers, and that’s that. The economy be damned, so long as we’re moral.”

If this is morality, I want no part of it. Nor should anybody else who really wants civilization to keep progressing as it once did.

It’s still not too late to turn it around. But I see no signs of any turn around yet. Almost half of the population thinks Obama is at least doing an OK job. This is incredible. The level of cluelessness and evasion in American society is staggering. I suspect that most people are preoccupied with other things and assume that the experts “running everything” will somehow fix it. Better hold on tight, because as long as we keep doing what we’re doing, we’re barreling down a dead-end street.

Dr. Michael Hurd is a psychotherapist, columnist and author of "Bad Therapy, Good Therapy (And How to Tell the Difference)" and "Grow Up America!" Visit his website at:

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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