Obama Destroys Salaries

It does not appear that things can get any worse in what used to be the stronghold of the free world. Exponential public waste, unaudited government debts, unacceptable fiscal deficit, the stress of the socialization of medicine, the worsening of the financial picture of social security, new pressures on people to finance irresponsible and inept employers, confiscatory taxes, increasing slaps at education, disarticulation of prices because of the constant manipulation of the federal reserve and the increasing deterioration of the currency are all prevalent characteristics of politics in Washington.

As it is known, unemployment is due to the government’s interference with contractual labor relations. On the other hand, the poverty or wealth that circumstances permit doesn’t matter; there shouldn’t be an excess of that indispensable factor for the production of limited goods and the provision of required services. Wages and income in real terms are due to the profit rates of capitalization of internal and external savings.

When there are falls in the rates of capitalization due to unwise economic measures — such as what is happening in the United States — this doesn’t free the working market, so unemployment rises. Employment is maintained only where there are no controls, as in the black market of illegal immigrants who work at market wage, while many who work legally become unemployed.

In an announcement made several weeks ago, Obama has set aside another $50 billion that will be used to employ people in public administration through various works. This was done while ignoring public sentiment. We are here to object to the idea of using us to increase employment, for this means taking away additional resources from people who are consumed by the capitalization rates, which, in turn, lower real wages. Obama uses this procedure for the sole purpose of concealing and mitigating a possible defeat in November’s congressional elections, although the cost has to be assumed before it adds more weight to the already very large waste and expenditure to finance debt, tax and inflation (or a combination of these three elements.) This huge additional expenditure cannot be alleviated by some circumstantial tax deductions and by opportunists who intend to deceive the public to obtain captive votes.

Even in this case, Obama’s idea is to increase taxes on the oil industry, which, by affecting the capital structure of these companies, will cause prices to rise, activity to become less competitive and jobs to be transferred to other fields. There have already been many obstacles in this field that were proposed to have stemmed from British Petroleum’s accident (which I wrote about at the time) to accentuate the setbacks and disruption in the energy field.

The issue is not one of parties but of principles. Always keep in mind that the current mess was started by former President George W. Bush when he tried to support the outrageous and absurd idea that we “abandoned free market principles to save the free market system.” Also problematic were his colossal deficits, the fastest growth rate of the last 80 years in the expenditure-output ratio and his asking Congress five times to extend the debt ceiling and quirky government and monetary arrangements in the housing market which led to a severe crisis. Then came Obama with a lot more of the same (and worse efforts). So the U.S. is headed for another disaster of proportions that will expose the painful state of the economy, which is always liable to inexistent capitalism.

I note that there is a serious problem in having someone who is incompetent in a position of power, and even more so if he or she has uncontrollable impulses to express feelings that are burning inside — uncontrolled blazes — as is the case with the American president. The situation will worsen, although he is embedded in the public’s imagination with a stern gesture and a raised finger, as if he had discovered the philosopher’s stone. Hence the saying: “There is nothing more dangerous than an idiot with initiative.”

For all these reasons, it is so rewarding and encouraging to see the millions of people gathered around the values promoted by the tea party — which does nothing more than what the Founding Fathers did — and the intention to get rid of the dinosaurs from both parties who remain stiffly in their seats in Washington, surrounded by their show of wealth, queasy by the red carpet of power and completely out of touch with reality. In this respect, we should be attentive to what can happen in these upcoming elections, for they may eventually result in an indication of the race for the winning presidential ticket in 2012.

That’s why we are so stimulated by the remarkable activities of institutions such as the Cato Institute, the Independent Institute, the Foundation for Economic Education and the Mises Institute, which are entities that bring together outstanding professionals who publish books, essays and articles and conduct seminars and lectures financed by individuals, corporations and foundations that understand the great importance of these tasks to reverse the effect of what is happening in this great country.

It is ironic that some of those surrounding the president are declared supporters of Marxism. Fidel Castro denounced this philosophy subconsciously, saying in a report by Jeffrey Goldberg for The Atlantic that “the Cuban model does not even work for us anymore,” an innocent reply to the journalist’s question as to whether “the Cuban model is exportable to other countries.” This interview took place in the presence of Julia Sweig, of the Council for Foreign Relations, Fidel’s wife, one of his sons and Randy Alonso, a high government official in charge of the media. Three days after that interview, Fidel turned on his sayings and this time, in military uniform, read a long prefabricated speech, written by the alarmed bureaucrats who surround him, in which he expressed that he had been misinterpreted and that “my idea, as the whole world knows, is that the capitalist system no longer works for the United States or the world.” (sic!) Thus the big villain of the prison-like Cuban island, who has spent more than half a century as a tyrant, attempted to step away from this by inserting the sincerity of age into his last speech.