Christopher Grey is CFO and co-founder of CapLinked, an online platform for connecting entrepreneurs and investors. He was a senior executive and managing partner in private equity, finance and banking for 15 years and directly involved in the origination and management of billions of dollars of debt and equity investments in various industries. He founded Crestridge Investments and Third Wave Partners, and was managing director of Emigrant Bank, the nation'sMore ↓Less ↑
Recent surveys of the voting public have shown that a majority (58 percent by one poll) of American voters believe Barack Obama is a socialist. This has led to a chorus of discontent from the mainstream media and Democratic Party officials such as DNC Chairman Tim Kaine. They’re upset and confused at how “misinformed” most voters must be to believe this.
Of course, the voters are not misinformed. Despite all the propaganda from the mainstream media and the Democratic Party trying to convince them otherwise, the voting public has been able correctly to discern the obvious fact that the Obama administration and the current Congress run by Nancy Pelosi and Harry Reid are pursuing a socialist policy agenda.
The evidence is overwhelming, even if the powers that be want to deny it. Obama is on record saying that one of the major purposes of the new health-care law is to redistribute wealth and income. Congressional leaders are on record saying and voting to show that they believe the best way to create jobs is through more government spending rather than lower taxes, less regulation and incentives for businesses.
Obama and the Democratic Congress have pushed through the largest increase ever in federal regulation of the banking and health-care sector. The entire residential real-estate finance industry has been effectively nationalized using Fannie Mae and Freddie Mac.
They want to do the same thing to the utility and energy sectors using the excuse of trying to protect the environment. They’re moving as close to nationalizing these industries as they possibly can with all of these new regulations and government controls.
The socialist agenda doesn’t stop there by any means. They’re pushing for the largest tax increases in history starting next year. Tax rates on dividends, which are already taxed at the corporate level, would double or more. Capital-gains taxes would rise by 50 percent. Ordinary income-tax rates, what most small businesses pay, would rise by 30 percent. The death tax would skyrocket from 0 percent to 55 percent.
What are they going to do with all of this additional tax money? If they tell you it’s going to reduce the deficit, don’t believe them for a second. They’re going to spend every penny of it and then some to redistribute more wealth and income and hire more government employees to further expand regulation and control of private businesses and individuals. This administration already has created more new “czars” and departments than anybody since Franklin Roosevelt, but they’re just getting started.
Nancy Pelosi recently said that she believed more unemployment benefits were the best way to create jobs. By that ridiculous logic, if everyone were collecting unemployment, she believes everyone would be employed. Only a true socialist ever could say something so absurd and expect people to take it seriously.
It is no mystery to anyone who understands market economics why no private-sector jobs have been created despite massive stimulus spending, record corporate cash on the sidelines and ultralow borrowing rates. The top 1 percent, or the “rich” as the Democrats like to call them, is responsible for nearly all of the private job creation in this country. This group has been under attack from Obama and this Congress every second since they’ve come into power. What we have here in economics is called a capital strike, and exactly the same thing happened during the Great Depression.
A capital strike occurs when private capital is unwilling to take the risk of investing because they believe that they’re not being properly compensated for the risk. This is market economics 101. Higher tax rates mean returns have to be higher. More regulation means returns have to be higher. Fear of additional government intervention and changing the rules of the game means returns have to be higher.
All of these are risks that private capital needs to consider when deciding to invest. Hiring someone to do a job is an investment. It is a risk. At the same time, the government has artificially inflated asset prices, especially in real estate. What this does is further depress the expected returns that private capital can expect to earn from investing in those assets.
The bottom line is that if this government would just stop its relentless war on the top 1 percent and get out of the way, the market would start creating plenty of private-sector jobs. There is plenty of private capital out there in this country and abroad that wants to invest in America and hire American workers. It is not investing right now because it is afraid of what crazy socialist thing this government will do next. It’s really that simple, but these socialist politicians don’t want to acknowledge it because it doesn’t fit with their ideology that the government creates jobs and prosperity rather than the private sector.
Instead, these socialist politicians would rather keep attacking the top 1 percent, the people who create all the private-sector jobs. They would rather attack people who call them socialists. They would rather attack anyone who disagrees with them as being an enemy of regular people, a right-wing fanatic or a greedy capitalist.
This kind of rhetoric is very powerful, and some people believe it. It’s comforting for some people to believe that the only thing standing between them and a safe, secure, high-paying job with health insurance and a pension is some small group of wealthy right-wing conspirators.
Unfortunately, nothing could be farther from reality. The irony is that these socialist politicians and their antibusiness, antigrowth policies are the biggest reason companies aren’t hiring.
As is too often the case in politics, evil is sold as being good and good as being evil. The old saying, “Satan in a Sunday hat” comes to mind in this current debate. In other words, sometimes those who present themselves as being righteous and selfless are completely the opposite.
As for these politicians who complain about being called socialists, maybe they should do everyone a favor and stop being socialists.