Business Investment: Willkie’s Lessons for Obama and Moore

Last month, Obama implored businesses to “get in the game” and increase investments; “now is the time to invest in America.”

More recently leftist agitator Michael Moore said, “[Businesses are] sitting on the money, they’re using it for their own — they’re putting it someplace else with no interest in helping you with your life, with that money. We’ve allowed them to take that. That’s not theirs, that’s a national resource, that’s ours. We all have this — we all benefit from this or we all suffer as a result of not having it.”

Note that Obama and Moore share a collectivist vision of property. Obama does not want businesses to invest in particular projects most likely to earn them a profit; he wants businesses to “invest in America” as a collective whole, without regard to personal advantage. Moore’s collectivism is more overt and severe: he follows Marx in declaring produced wealth the property of the nation state.

But the real cause of lackluster investment is not shortsightedness or “greed” on the part of businesses owners and executives. If they thought they could make money, they’d invest! Instead, the real cause of continued high unemployment and sluggish economic growth is the economic uncertainty created by leftist politicians and activists like Obama and Moore. Robert Higgs, for example, has written about this.

Consider just a few of the ways that power-hungry politicians have fostered uncertainty. ObamaCare with its waivers and Constitutional problems is intentionally left to bureaucrats to implement by fiat. Democrats keep talking about raising taxes and implementing new taxes like the VAT. The FTC and DOJ keep threatening to persecute successful companies under antitrust laws. Vicious laws like Sarbanes-Oxley discourage corporate formation. Obama and his minions have diverted billions of dollars to the politically connected as corporate welfare. Anti-energy activists continue to impede development of real domestic energy sources (as opposed to windmills and wasteful solar panels.)

With all this politically-caused uncertainty, many business leaders simply cannot predict whether they’ll see a return on their investments.

If Obama and Moore want businesses to invest, they should stop threatening to confiscate the earnings of businesses and get the hell out of the way.

Interestingly, this same debate played out during the Great Depression.This is Wendell Willkie, a book I discovered through Amity Shlaes, contains the text of a debate between Willkie and Robert H. Jackson held January 6, 1938. Following are some of Willkie’s remarks (see pages 70-73 of the 1940 book from Dodd, Mead, & Company).

“Mr. Jackson has previously spoken of a ‘strike of capital’ against the government. … The main problem is to restore the confidence of investors in American business, and to do this will require more than pleasant speaking on the part of government. For several years the government has taken definite action to show its hostility to business. It must now take definite action to demonstrate the sincerity of its desire for cooperation. …

“For example, there seems to be no important disagreement today on the need for a reduction in the undistributed profits tax and the capital gains tax, both of which fall with particular severity upon small businesses and both of which restrict the expansion of industry.

“[Other needed reforms include] modifying those restrictions upon the buying and selling of securities that hamper the investment of funds…

“And above all… the American people should be spared the confusion of hearing what one government official says in friendship today denied by another in hostility tomorrow.”

While I do not agree with all of Willkie’s proposals, his basic appraisal of the cause of the “strike of capital” is accurate. It is a lesson the Obamas and Moores of the world would do well to heed.


Anonymous commented March 5, 2011 at 1:38 AM
I am so scared that Americans actually listen to what Michael Moore has to say. He is a classic Ayn Rand character. I live in a city where many residents loved “Capitalism: A Love Story.” One of my friends (used lightly) even posted on Facebook that capitalism hasn’t done anything for her. Well, I think my persistent replies made her regret writing it–but she never changed her opinion, of course. I am really becoming frightened about how American citizens are already so controlled and regulated by the government. Most people I know would sit around and allow our country to become fully socialist. Obviously, Michael Moore can’t wait for that moment. Scary!


Kate Yoak commented March 5, 2011 at 8:12 PM
Scary is right, Kim. I only have one question about our future. Does it go the way of Atlas Shrugged – and do people wake up too late to prevent the collapse, or do enough of them see it coming and say “enough” while there is still time? I believe, there is hope for the latter. The faster the socialists attempt to make change, the more likely it is that they will be noticed. Fingers crossed.