This week, President Obama said something that made me shake my head.
While speaking outside Phoenix, AZ's Desert Vista High School on Tuesday, the president rejected accusations of favoring "socialism" in the housing markets.
"I know that sounds confusing to folks who call me a 'Socialist,'" he said. "I think I saw some posters there on the way in."
"But," he continued, "I actually believe in the free market."
Here's the thing...
After five years of top-down government policies that have done little to spur economic growth, we're skeptical about the president's love for unfettered capitalism.
Just look at the following seven "free-market" policies implemented by President Obama during his four-and-a-half years in office:
He enacted a government takeover of the rules and regulations in the healthcare market, and mandated that every American must purchase health insurance (a move that bordered more on corporate fascism than free-market ideology). This "signature" law remains the furthest thing in the world from a market-based solution. It makes it virtually impossible for health insurance companies to operate without the government breathing down their necks at all hours of the day; it forces consumers to purchase a product they may not want or need; and, it does nothing to promote an open marketplace where companies can compete on quality and price.
He allowed his energy secretary to hand billions of taxpayer dollars to campaign bundlers and fundraising allies in the form of green loans. This occurred even after Department of Energy analysts raised flags about the functionality of each project at the expense of other alternative energy projects that were more deserving of the funding. These crony actions socialized massive taxpayer losses and gave us the names Solyndra, Beacon Power, Fisker, and Satcon Technology. According to a recent report, as many as 50 companies that received Department of Energy money are either bankrupt or in serious danger of crashing.
He allowed a drastic increase in EPA regulations that made it harder for coal producers to operate in their market, thereby shutting down coal power plants for good. According to the Associated Press, more than 32 mostly coal-fired power plants will close this year and another 36 plants may close due to new EPA rules regulating air pollution. Many more that had been planned to help meet the country's growing need for electricity have been scrapped, while President Obama continues to tout windmills and solar energy (as if he has the ability to bend the second law of thermodynamics in his favor).
He has allowed U.S. Federal Reserve Chairman Ben Bernanke to pump $85 billion a month to the banks and protect his Wall Street allies rather than returning to fiscal discipline that he championed while campaigning in 2008. This stimulus plan by Bernanke has directly manipulated the market to the point that companies are addicted to government action in order to prop up share prices. The very idea that the Fed may even consider tapering has led to sharp pullbacks this week.
After attacking Fat Cats on Wall Street, the president appoints them to important government positions that allow them to influence the market. The ideal example was his appointment of Mohamed A. El-Erian, the CEO of Pacific Investment Management Company (PIMCO), as the chairman of his Global Development Council. In 2008, PIMCO invested steeply in government-sponsored enterprises (GSEs) and El-Erian stated that his company "partnered with the government." No conflict of interest there...
Under President Obama's policies and oversight, the largest Wall Street banks have grown by 30% and now control enough assets to represent nearly 97% of U.S. gross domestic product (GDP). That level of concentration isn't a free market, it's an oligarchy. The banks are now so powerful, due to Washington's crony nature, that these institutions can hold the American taxpayers ransom while crime after crime goes unpunished. His former economic advisor, Jon Corzine, misallocated $1.2 billion in consumer funds, but nothing has happened to him because of the former MF Global boss's connections. In a free market, Corzine would have been barred from the financial markets and would be making license plates for taxpayers.
He allowed the National Labor Relations Board to sue The Boeing Co. (NYSE: BA) when the company announced it would be moving from a union-heavy state to a right-to-work state in South Carolina. Boeing was unhappy with its union contracts and decided to move across the country in order to build a plant to construct its new fleet of aircraft.
These are just a handful of "free-market" solutions set forth by our president - a real Adam Smith.
The reality is that the president hasn't embraced free-market capitalism.
Instead, he's embraced crony capitalism in the alternative energy markets, socialism for the bank bailouts, neo-feudalism with higher taxes and Fed policies, fascism with the healthcare markets, and statism with the ongoing programs that have spied on American citizens.
The only hope for this country is real, accountable capitalism.
Sadly, we don't have any champions of this philosophy in the administration...
Words of wisdom for President Obama: Perhaps if the president could speak directly to the world's past leaders, he'd do things differently... here's what one would likely advise...
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.