They Just Don't Get It

On March 7th during his State of the Union address, President Joe Biden declared war on America. President Biden and many other Democrats see corporations as an enemy, an adversary. This may be because we have too many lawyers in Congress and not enough business people. But corporations, along with small and medium sized businesses and the people that run them, are not the enemy of America, they are part of America.

President Biden just doesn’t get it. The private sector and the public sector should be partners. But that does not mean that the people are victims ground to bits between the machinations of these two institutional behemoths. An appropriate balance between the public and private sector guarantees maximum freedom of the people as neither sector gets so powerful that it can dominate. And the people benefit from this balance of power in the form of jobs, savings and general prosperity.

This is the way the Founders intended the country to function. Domestic tranquility and the general welfare benefit from the invisible hand of market forces as envisioned by Adam Smith in his book, The Wealth of Nations. The competitive nature of the free market keeps supply and demand in balance through the price mechanism. Changes in prices result in changes in the supply and demand of products and services, or vice versa. These markets work very well when there is a high level of trust between the market participants and consumers. The appropriate role of government is to assure that this trust is well deserved.

Article 1, Section 8 of the US Constitution gives Congress the power to fix the standard of weights and measures to give confidence to citizens. This is the basis for the government’s powers to regulate business behavior. But the goal is not to strangle profit out of business but to assure consumers of the safety and quality of the products they purchase. Jeff Bezos provides a great service at a great price so I don’t really care how wealthy he is. If he tried to increase his wealth by raising prices I have the option to choose other vendors for my purchases. Competition is the cure for high prices, not regulation.

The Founders considered government a necessary evil. Maybe not quite evil but potentially very evil. The purpose of government is not to rule people. Nor is it the purpose of government to take care of people. The purpose of government is to build trust. The government runs the court system so that the people have a mechanism for the redress of their grievances. The government regulates commercial activity to assure consumers that the products and services they purchase are safe. A partnership between the public and private sectors will greatly benefit the people. If people trust that products and services are safe and reliable, trust that contracts will be honored, trust that free markets will not be captured by monopolists then the entire country will prosper.

It is not the job of government to determine which profits are excessive, that is the job of competition. It is not the job of government to confiscate the wealth of investors in order to use that wealth for its own purposes. Much of President Biden’s State of the Union address detailed a plan to impose confiscatory taxes on billionaires and corporations. The passion of President Biden’s tax rhetoric is more indicative of priggish envy than it does of good governance. It smacks of hypocrisy from a man whose family has raked in millions from his position in government.

To extract these confiscatory taxes from American companies as well as its citizens, President Biden’s 2025 budget raises the corporate tax rate from 21% to 28% to which we must add state corporate taxes up to 9.8% for a total of nearly 40%. This compares to corporate tax rates in the Nordic welfare states that Bernie Sanders admires so highly of 21% to 22%. Perhaps President Biden does not realize such taxes will make American products more expensive compared to our international competitors and thus less competitive. Perhaps he doesn’t realize that domestically these taxes will largely be passed on to American consumers. Perhaps he doesn’t care.

He also proposes a confiscatory wealth tax of 25% on families worth more than $100 million, despite other countries abandoning such taxes after they proved unworkable. And despite such onerous taxes his budget forecasts a deficit of $1.8 trillion which is a deficit of 6.1% of GDP so that his government can spend even more and more money on welfare and transfer payments. Keep in mind dear reader that these estimates are based on the government’s pie-in-the-sky belief that all these taxes won’t change corporate and citizen behavior to avoid paying such heavy taxes. Tax collection will be less than forecast (that’s always the case) so deficits will be even larger than the government’s optimistic estimates. Don’t expect a growing, prosperous economy if you treat the most productive and innovative half of the country as an enemy.

This is not a budget that will enhance the peoples’ trust in government. This is a declaration of war on the principles that made America great. The American Dream cannot be achieved with government handouts. The American Dream is achieved by working hard, deferring spending and saving for the future. The Biden administration’s idea of the America Dream is the peoples’ nightmare. President Biden just doesn’t get it.

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Speaking of trust, there is no man less worthy of our trust than former president Donald Trump, a man who escaped financial obligations as his businesses wallowed in bankruptcies at the great cost to his business partners. A man who routinely stiffed suppliers to his businesses and abandoned former loyalists to their fates for serving him.

Bankruptcies were part of his business plan. He was quoted by Newsweek in 2011 saying, "I do play with the bankruptcy laws—they're very good for me." Of course, although the bankruptcy laws were very good for Donald Trump, they weren’t very good for his bankers, creditors or investors. He even stiffed poor Rudy Giuliani, who is awash in massive legal bills as a result of his efforts on behalf of Donald Trump. I say poor Rudy because he has fallen from being America’s Mayor for his valiant efforts after the 9/11 attacks to a pathetic shill for a corrupt leader.

Do you think that a man who was an untrustworthy business partner, and is an untrustworthy ally would make a trustworthy president? I don’t understand why MAGA Republicans are such staunch supporters of Donald Trump. He doesn’t lift a finger to support those who have gotten into trouble by going out on a limb for him and he has thrown any advisor with an independent thought under the bus. Such will be the fate of many a MAGA Republican.

These guys just don’t get it. Neither Mr. Biden nor Mr. Trump really understand what made America so great, so unique, let’s just say it – so exceptional. Americans don’t need a nanny state. They don’t need a so-called Great Leader or one-day dictator. They need to trust each other so that we will continue to be exceptional. A truly great leader would be one that helped to build that trust among American citizens.