Two Lessons on Prosperity From Obama's Cousin

I came across this op-ed today by Dr. Milton Wolf in The Washington Times entitled 'German Miracle" Barack Obama doesn't see.  Wolf is actually a cousin of President Obama.  I have the feeling he may not get invited over to The While House very often.  Dr. Wolf writes,

Obamanomics has produced the weakest, most anemic recovery since the 1930s, when another generation’s big-government planners turned their great recession into the Great Depression. To be fair, President George W. Bush certainly did not give the best economic handoff - he too was addicted to spending - but to be clear, President Obama has unarguably fumbled the ball. He has, to borrow his own phrase, put his “boot on the neck” of American businesses with his increased taxes and regulatory burden; he has grown government with his wildly increased spending and outright take-overs; and he has weakened the dollar with his “quantitative easing” printing press.

The devastation caused by Obamanomics is now undeniable. According to Investors Business Daily, 2 million net private-sector jobs have been lost; unemployment has increased by 1.5 percentage points; long-term unemployment is the worst ever on record; the dollar is 12 percent weaker; the number of Americans on food stamps has increased by 37 percent; the Misery Index (unemployment plus inflation) has increased by 62 percent; and the national debt has exploded by an alarming 40 percent. Mr. Obama is on pace to saddle America with more job-killing debt than all the first 43 presidents - combined.

It didn’t have to be this way but Mr. Obama is trapped in the mistaken belief that America’s problems can only be solved by growing our government ever larger. When all you have is a hammer, everything looks like a nail. 

Dr. Wolf points to the instructive lesson of Germany after World War II for a proven path forward that we could learn from.

In the aftermath of World War II, a defeated and devastated Germany was under American occupation, controlled by Keynesian economists including the American price-control czar himself,John Kenneth Galbraith. The American overseers, as well as Germany’s new Social Democratic Party, favored maintaining the Nazi’s top-down, government-directed economy with its price and wage controls and restrictive regulations, which, unsurprisingly, created economic stagnation and crippling shortages of basic goods.

One bold German economist who understood the power of freedom dared to disagree. In a swift and masterful move on June 20, 1948 - a Sunday - economic director Ludwig Erhard freed the German market (and the people) by abolishing most of the restrictive price controls and other burdensome governmental regulations while he simultaneously solidified monetary policy with the introduction of the deutsche mark. The American Keynesians and German socialists were aghast but Erhard was quickly proven right.

Germany’s economy responded with a roar heard round the world. Within weeks, businesses sparked back to life and crippling shortages were eliminated. Within a year, the war-torn western zones united to become West Germany which quickly and overwhelmingly outpaced the Soviet-controlled East Germany. Within a decade, West Germany’s economy doubled, leaving behind Allied “winners” of the war, France and England, despite the Marshall Plan largesse these nations enjoyed. Within a half-century, the Berlin Wall crumbled and with it, the Soviet’s Evil Empire. This is the story of the “Wirtschaftswunder,” the German economic miracle.

While checking Dr. Wolf out I found that he also writes a blog.  I thought his blog on "How the Free Market Spreads the Wealth ) and Gives Us Cool Things Like iPhones) was particularly on point considering the class warfare rhetoric that is so popular today.  Another lesson worth considering from President Obama's cousin.

When we say free market, what we really mean is free people. At the core of the free market is voluntary, rather than compulsory, cooperation. For a capitalist to be successful -- for you to be successful -- you must first please someone else. You must meet someone else's needs. And therein is its genius, its elegant simplicity. 

[C]apitalism, paradoxically which starts with self-interest but is guided by freedom, maximizes social welfare.

No human construct will ever achieve perfection but the free market is not only the most effective and efficient method of allocating our limited resources in a manner that maximizes a society's prosperity but it is also the most compassionate. It creates a voluntary, rather than forced, redistribution of wealth.

Check out this video that says (and shows) it all.  "Would You Give Up the Internet for $1 Million?  The vast majority of people would not.  Doesn't that make all of us wealthy??