At a recent fundraising President Obama remarked that Republicans may have the wrong idea of Democrats and Obama. According to a recording taken at the fundraiser, reported by CNSnews, Obama had this to say:
“We don’t think government can do everything,” he said. “We don’t think that top-down solutions are the right way to go. We believe in the free market. We believe in a light touch when it comes to regulations.”
“We don’t want to tax all businesses out of business,” Obama said. “But we do think that there’s a role to play for government.”
Despite that claim, there are several instances that show Obama does not believe in the free market, but instead supports a Crony Capitalist system where the government intervenes on behalf of some businesses, and intervenes in opposition to others. The Department of Energy loans made to solar companies like Abound Solar and Solyndra are an example of Crony Capitalism, when the government took tax dollars and gave them to favored businesses, most likely because of the donations Obama and other politicians had received from these companies. The free market would put more decisions in the hands of the people who produce, taxpayers, to make the decision about which companies exist.
Also deviating from free market capitalism, Obama said on the campaign trail in 2008 that “…if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them”. He was speaking about his desire to kill the coal industry with regulations in the name of green energy. This is a particularly good example of Crony Capitalism, because the favored and disfavored businesses are in the same field. Through government action Obama expected to kill the coal energy industry, and through government action he also expected to fuel the solar energy industry. The government was who who picked the winners based on the tax dollars handed out, and picked the losers based on the burdensome regulation, which Obama admitted was designed to put coal companies out of business. Quite obviously Obama’s claim that he supports free markets is completely false.
As a testament to the ills caused by Crony Capitalism, many of the solar companies that received tax funded loans (including Solyndra and Abound Solar) went out of business and will be unable to pay back the loans. This means that despite the government favoring these solar companies, they did not produce the product for which they were given the loans. This shows that under Crony Capitalism, capital is not given to the best business with good technology and a sound track record, but instead to the friends of whoever gets to hand out the money–in this case Obama and his administration.
And likewise, at the last calculation taxpayers have lost $10 billion on the GM bailout which favored one particular car industry instead of allowing their assets to be sold to better run or new car companies. This means GM failed to produce an in-demand product which a free market would have dictated.
Other instances of Crony Capitalism (as opposed to free market) include the “Monsanto Protection Act” a law which favors big agriculture to the detriment of small farms, and subsidies to various industries whose artificially lower prices put their small competitors out of business. He may say differently, but Obama certainly does not believe in the free market.