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.

Skousen Discusses Completed Franklin Autobiography

Economist Mark Skousen, a direct descendant of Benjamin Franklin, completed the founder’s autobiography from letters. Recently Skousen came to Denver for the American Economic Association conference, and he made time to speak at a Small Business Chamber of Commerce event. Skousen also discussed his history as an economist and financial advisor, the subject of a future video.

Christmas Could Be Challenging for Colorado’s Old Timers

The following article by Linn and Ari Armstrong originally was published December 24, 2010, by Grand Junction Free Press.

These days at Christmas most of us enjoy the opulence of the season. We might drive our shiny automobiles past sparkling lights on our way to the movies, the mall, or a restaurant. Under the tree many of us will find video disks and games, iPods, Kindles, or maybe even a new flat-screen television.

We owe our wealth and comfort today largely to the hard work of Colorado’s pioneers. This Christmas, it is worth remembering the challenges and struggles our forebears overcame and the more modest holiday celebrations they enjoyed.

We found several Christmas stories in a two-volume work from 1982, “Long Horns and Short Tales: A History of the Crawford Country,” by Mamie Ferrier and George Sibley. It covers the late 1800s and early 1900s.

“At a typical one room schoolhouse there was one teacher for all eight grades,” Ferrier and Sibley tell us. Apparently it is not the case that today’s students cause more trouble. At Maher (near Crawford) the school board hired John Stafford, who brought a bull whip to class to keep the unruly older boys in line.

“In the days before the automobile, movies, TV, and the like,” Ferrier and Sibley write, the school houses were used not only for class but for church, elections, and business meetings. Twice a month the local residents held a “literary” where people would sing, debate, and perform skits. To raise funds for the school, women would auction off boxed dinners and their company, and the “young ladies brought… as much as $25.”

Christmas brought a “gift exchange, singing of Christmas carols, and a program that included every child in the school.” Despite the modesty of the celebration, “a good time was enjoyed by all,” our authors assure us, and we do not doubt it.

Ferrier and Sibley nicely summarize the spirit of Christmas in those ground-breaking times. “In the homes Christmas was celebrated with a big dinner and lots of company. Gifts were much different from those of today. Most children received only one gift and the hand knitted mittens and stocking caps.

“There might be a few oranges which was a real treat as they were not purchased during the rest of the year. Home-made rag dolls were common. Older boys might be given a single shot .22 rifle; older girls got things for their hope chest, hair ribbons, and handkerchiefs. The men were sure to get neckties or socks. Today children are given so many toys that they don’t appreciate any of them. In pioneer days the few things were treasured.”

The book about Crawford contains the brief autobiography of Laura Piburn Pace, who arrived in Colorado as a girl in 1884. She describes her home after her marriage: “The house was a two-room log cabin. The kitchen had a dirt floor and one small window. My furniture was wooden boxes nailed to the wall and stacked on top of each other… I made curtains out of flour sacks, embroidered them and crocheted edges on them and they were quite clever.”

One May Laura’s house burned down. “By August, 1911, the new house was near enough finished so we could move into it,” and “by Christmas Day we had a lovely farm home.”

Of course, some people today are struggling this season, hit by unemployment or the housing crunch; the Denver Post reports a rise in poverty. But today’s economic troubles pale in comparison to those of the Great Depression. Yet even in those dark days Coloradans found a way to enjoy and celebrate Christmas.

Writing for the Winter 1986 edition of “The Journal of the Western Slope,” Mesa State professor Paul Reddin describes how Grand Junction women coped with the Depression. He bases much of the article on interviews he conducted.

“During the Depression, the residents of Grand Junction worked hard, but they also found time to enjoy life. Much about their entertainment reflected the rural aspects of the region and a conviction that good times centered around family and friends,” Reddin writes. He adds that people then had the attitude that you should “make your own fun.”

The professor’s comments on Christmas are especially poignant: “Holidays, especially Christmas, brought family together. All enjoyed the fellowship of such occasions. If funds for gifts were short, grown-ups did not exchange them, using the available cash for presents for the children. Parents could practically always afford gifts for youngsters because a small toy car might cost as little as 15 cents, and a dollar would buy a nice present. For adults, the chance to visit with inlaws was more important than gifts.”

Earlier Coloradans, rugged of spirit, maintained a good outlook even in rough times, and generally they appreciated the things they had and made do with them. As you enjoy your glorious feast and the amenities of modern life, spend a moment to reflect on what has been made possible by Colorado’s hearty pioneers.

WWII Vet Seymour Glass of the 445th Bomb Group

Seymour Glass recounts his service in World War II as a lead radio operator with the 445th Bomb Group. Bob Glass (his son) and I interviewed him on September 4, and he gave me permission to publish selections.

First I recommend listening to Glass’s account of carrying a friend’s journal with him throughout the war and then returning it to his wife, who then sent a letter. It is a moving story.

In the first main video, Glass describes his 32 bombing missions. Glass notes that Jimmy Stewart served with his group before becoming an actor. Glass also describes how he came to serve in that position.

Next Glass discusses his plane coming under fire and assisting the injured. “When we were hit by fighters, and you had all ten [.50 caliber] guns going at the same time, the plane, as big as it is, as mammoth as it is, would chatter from all the vibrations of the guns,” he recalls. He also discusses his service blade — and that of an enemy.

In the final video, Glass discusses survival gear, currencies, photographs, and his Air Medal.

Thank you for your service, Mr. Glass.



Sam April 20, 2011 at 4:53 AM
A fascinating interview with a fascinating man! Thank you, Ari, for posting this, and thank you, Mr. Glass, for your service and for flying each one of those 32 missions.

Unknown October 23, 2011 at 8:20 AM
Ari, Thank you for recording this. It was fascinating and moving. His quiet pride in what he did and his sharp mind are inspiring. Thanks for recording this so it can be passed on.

Review Questions for Andrew Bernstein’s Capitalism Unbound

This set of review questions is part of the Liberty In the Books program, a monthly discussion group. These questions cover Andrew Bernstein’sCapitalism Unbound.

Reading I: Through Page 60

1. How does Bernstein distinguish today’s American economy from laissez-faire capitalism? (Page x)

2. How did American colonists oppose British economic controls prior to the revolution? (Pages 2-5)

3. In what ways did the U.S. Constitution protect individual rights? (Pages 6-8)

4. In what ways does capitalism protect economic liberty? (Pages 9-10)

5. What is statism, and what are some key historical examples? (Pages 10-14)

6. What is the relationship of “human rights” and “civil rights” to individual rights? (Pages 14-15)

7. What fantasy have enemies of capitalism promoted regarding living conditions before the Industrial Revolution? (Pages 19-20)

8. What were the actual economic conditions of pre-industrial Europe? (Pages 20-22)

9. What were the special problems regarding sanitation and house fires in pre-industrial Europe? (Pages 22-24)

10. What was Thomas Malthus’s theory of population? Under what conditions is he right, and when is he wrong? (Pages 24-26)

11. What is the relationship between intellectual freedom and material prosperity? (Pages 26-28)

12. Who are some of the heroes of the Scottish Enlightenment, and what were their accomplishments? (Pages 29-34)

13. What was the impact of the work of James Watt and Matthew Boulton in the clothing industry? (Pages 34-35)

14. What were the major industrial advances in the fields of metals, agriculture, and transportation during the early industrial era? (Pages 35-37)

15. How do people improve their material conditions, and how did the industrial revolution illustrate this? (Pages 38-41)

16. What is the connection between free minds and free markets? (Pages 41-42)

17. What were the economic impacts of the Northern Securities Company, what was the response by the federal government, and how did this response mark a turning point in American history? (Page 41)

18. What were the advances in communications, construction, technology, and transportation in 19th Century America? (Pages 44-49)

19. What were Andrew Carnegie’s achievements in transportation and steel production? (Pages 49-51)

20. What were John Rockefeller’s achievements in oil production? (Pages 51-52)

21. Were American industrialists “Robber Barons?” Why have they been described as such? (Pages 53-57)

22. Why does Bernstein write, “freedom is fundamentally freedom of the mind?” (Pages 57-59)

23. Why, in Bernstein’s view, has capitalism so often been denounced despite its profound benefits? (Pages 59-60)

Reading II: Pages 63 to 131

1. Why do so many intellectuals denounce capitalism? (Pages 63-66)

2. What is the connection between altruism and collectivism? (Pages 64-68)

3. Why does a welfare-state mixed economy dominate Europe and America? (Pages 68-70)

4. What does selfishness mean? (Pages 71-72)

5. What is a value? What is a sacrifice? (Pages 72-74)

6. How can values be objective? (Pages 74-77)

7. What is the relationship between reason and survival? (Pages 78-80)

8. Why is productiveness a virtue? (Pages 80-82)

9. Why is “cynical exploitativeness” not in one’s rational self-interests? (Pages 82-84)

10. How is rational self-interest necessary for benevolent goodwill? How does self-sacrifice undercut goodwill? (Pages 85-90)

11. How does capitalism protect one’s right to life? (Pages 91-93)

12. What is socialism? (Pages 97-98)

13. How did the West prop up socialist systems in the 20th Century? (Pages 99-100)

14. What were the results of 20th Century socialism? (Pages 98-102)

15. Does socialism allow a rationally planned economy? (Pages 103-106)

16. What is a coercive monopoly, and how do such monopolies violate individual rights? (Pages 107-110)

17. Can unions exist under capitalism? On a free market, what are unions prohibited from doing? (Pages 110-115)

18. What is the relationship between unions and employment? (Pages 110-115)

19. What are the harms of inflation? (Pages 115-116)

20. What caused and prolonged the Great Depression? (Pages 117-123)

21. What caused the modern housing bust? (Pages 123-130)

Review Questions for Amity Shlaes’s The Forgotten Man

Amity Shlaes’s book The Forgotten Man is an excellent book for a reading club. This was the first book we covered in Liberty In the Books (back when my questions weren’t very detailed). We split the reading into four monthly meetings, skipping some of the material. See also my detailedreview of the book.

Shlaes Reading I: Introduction, Chapter 1, Chapter 3

1. Who is the “forgotten man?”

2. Why is Hoover upheld by some as a an alleged champion of “laissez faire?”

3. What are some of the differences between Hoover versus Coolidge and Mellon?

4. What were the major federal policies of 1929, and what were their effects?

Shlaes Reading II: Chapters 4-6

1. What were the general Federal Reserve policies of the early 1930s, and what were their effects?

2. What was the intellectual climate during the Hoover/FDR era?

3. What was tax policy — and unemployment — by the end of Hoover’s term?

4. What were the themes of FDR’s campaign rhetoric?

5. What were the powers and consequences of the NRA and AAA?

6. What were the general trends in FDR’s monetary policy?

7. What was the basic nature of the struggle between Willkie and the TVA?

Shlaes Reading III: Chapters 7-9

[Sorry; no questions available.]

Shlaes Reading IV: Chapters 11, 13, 15, and Afterword

1. In what ways did the Federal government go after businesses and wealthy citizens?

2. What the were labor controls of the later 1930s, and what were their effects?

3. What was FDR’s response to the Supreme Court’s antipathy to some of his programs, and what was the result?

4. How did the fight between the TVA and private utilities play out?

5. What were the major themes of the 1940 election?

6. What is Shlaes’s take on the “recovery” of FDR and the results of his federal spending programs?

McPheters: FBI Agent, Mormon Bishop

Yesterday I dropped by the local Costco and was surprised to run across an author at a book signing. The author was Mike McPheters; the book isAgent Bishop, the account of his life as an FBI agent and Mormon bishop. I asked him if I could come back with my video camera, and he agreed.

In the following video McPheters discusses his past and his book.

[February 21 Update:] Then we discussed several political issues: welfare, the draft, drug policy, and immigration. My goal was to discuss some tough questions with a light touch; I wasn’t trying to provoke debate. I should note, though, that I regard the draft as a violation of individual rights, I oppose the drug war and believe it causes enormous harm, and I favor open immigration (with the caveats that I mention in the interview). I broke up our conversation by topic.

McPheters on Church and Welfare

McPheters on the Draft

McPheters on Drug Policy

McPheters on Immigration

Ralph Carr Shows Politicians Can Stand for Liberty

The following article originally was published December 21 by Grand Junction’s Free Press.

Ralph Carr shows politicians can stand for liberty

by Linn and Ari Armstrong

If you still have last-minute Christmas shopping to do, we have a suggestion. Adam Schrager, the thoughtful 9News reporter, wrote a book called The Principled Politician: Governor Ralph Carr and the Fight Against Japanese American Internment. This delightful account of important Colorado history came out in paperback earlier this month.

Carr served as governor from 1939 to 1943, an era spanning parts of two of the nation’s greatest challenges: the Great Depression and World War II. Carr responded to both these crises by defending liberty and individual rights.

As Carr entered office, Colorado government faced a $1.8 million deficit. Unlike many of today’s politicians, whose answer to deficits is to raise taxes and “fees” or increase government spending, Carr called for fiscal responsibility.

Schrager writes that Carr “announced plans to abolish many of the state bureaus and boards established by the last administration.” He also “proposed shifting the net income tax benefiting schools into the state’s general fund.” During a speech he “told the crowd that anyone who joined the civil service to have an easy job financed by taxpayers… could expect to be fired.”

We wish we could hear Carr’s common-sense wisdom reflected in today’s political debates. (All quotations are from Schrager’s book.) “The way to save money is to stop spending it.” “Spending and lending is unsound and… thrift and the full payment of debts… is simple and common honesty.”

While seconding the nomination of Wendell Willkie, who lost the presidential contest of 1940, Carr said, “If we are ever to save this country, we must first save business. Every one of you is in business — big business and little business, farmers, stockmen, laboring men, industrialists.”

Carr turned down a chance of running with Willkie (a wise move in retrospect) to continue his work in Colorado. Carr said, “What have we done to justify your returning us to office? We have taken the income of the state of Colorado. We have lived within it. We added not a dime of new taxes. We cut the levy for state purposes… and we balanced your blooming budget.”

Carr opposed Roosevelt’s expansive political controls: “The New Deal has usurped the powers of the state [and] undermined personal liberty.”

Carr added, “It is not disloyal to oppose and to question the policy of one who has not yet proved himself omnipotent and to require that he too be limited and circumscribed by those same ideals and standards governing others. We insist that the president recognize and follow the Constitution which created him.”

Carr summarized his basic political philosophy with an eloquence rare in politics: “The individual is supreme and government is established only to protect and foster his rights.” He later added, “Every time the individual submits to a central government for a solution of another problem of business or life, there is a consequent surrender of individuality, of privilege, of right.”

Carr argued that the term “liberal” had been stolen by the left. He said, “The true liberals are those who consistently follow the proposition that liberty means freedom to exercise individual rights unaffected by external restraint or compulsion… The underlying theory of the Constitution is found in the proposition that every man may use the talents which God has given him, may reach any goal toward which he sets his eyes, and may enjoy the fruits of his ambition, his study and his toil, provided only that he does not use his powers to injure his fellows.”

The fate of the nation changed on December 7, 1941, when Japanese bombers attacked the U.S. base at Pearl Harbor. Carr rose to the challenge, setting up “an emergency meeting of the Colorado Council of Defense for the next morning,” Schrager writes.

While most Coloradans responded to the crisis admirably, some turned to paranoia and racist threats. Some called Japanese Americans “vipers” and “yellow rats.” Various politicians and media personalities wanted to put them into concentration camps. The Denver Post wrote, “To hell with the Japs!” Nels Smith, governor of Wyoming, said “there would be Japs hanging from every pine tree” if sent to that state.

Carr rejected racism. He said, “We have among us many of a new generation of Japanese people born in the United States — sincere, earnest, and loyal.” He offered a “hand of friendship” to immigrants. He urged protection of the Bill of Rights and the “security, freedom, and opportunity” it offers.

In a public address, Carr granted the existence of enemy “fifth columnists” and assented to federal relocation policies. Yet he also spoke for “loyal German, Italian, and Japanese citizens who must not suffer for the activities and animosities of others.” He warned against “the danger of inflammatory statements and threats against these unwelcome guests” forcibly sent to Colorado.

Though we may not approve every detail of Carr’s career, he has richly earned his place in history as a man who defended liberty. We thank Schrager for telling his inspiring story.