By: Eric Schmidt
The Presidency of Barack Obama is a new age for America. It is also, quite possibly, the signaling of the death of capitalism in America. The very traditions and ideals that helped to make this country great are now being abandoned for special interests and instant gratification. Quick fixes are not the answers our nation needs in a time of fiscal uncertainty. We are witnessing, with each passing day, new powers being ushered unto the federal government without so much as a pause to question the legality of it all. Is our government supposed to be in the business of manufacturing cars and distributing home loans? We are moving so fast that everyone is asking whether the stimulus plan will work, not if it’s really permissible. The long-term repercussions of Obama’s economic policies are leading us down the road of socialism, which is especially bad news for those of us preparing to enter the workforce.
A case example of socialism in work is Europe. The theme of economic collectivism on the Continent after the Second World War has transformed European economies into paradigms of socialist policies. The results speak for themselves. European economies have been mostly stagnant since World War II. According to the Heritage Foundation, the European Union in February 2007 had 22 members over the US unemployment average of 4.5%. Gross Domestic Product, which Europeans were boasting in 2000 would exceed America’s in 2010, has become sluggish and has not yet surpassed that of the U.S. The EU trade area has an annual average growth rate of 2.1%, compared with America’s 3.3%. These are all results of the ideological mindset of Europeans. They seem determined to maintain socialist and protectionist policies, as respectively evidenced in the state ownership of many major European industries, such as Airbus and Europe’s Common Agricultural Policy.
What is especially relevant to young people and students, however, is the employment rate of countries that have endorsed a socialist agenda. The employment rate for Europeans aged 15 to 64 in the EU is around 63%. The United States stands around 72%, according to the Heritage Foundation. The National Bureau of Economic Research places European unemployment at 12%. The reason for such high numbers is because the economic environment is not conducive to hiring. European companies are bound by law to guarantee their workers certain immediate benefits and high starting salaries. It is very difficult to fire someone due to the power of labor in European governments. This approach to business is unhealthy for growth and not very utilitarian. Overall, the society loses. If companies are afraid to hire because of the expense and legal ramifications, they won’t! They will make do with what they already have. This diminishes the potential for commercial expansion. European students find it very difficult to get internships and jobs upon graduating. The European model of economic and labor statutes that Obama might adopt will drastically reduce the chances for students struggling with loans to get jobs and internships.
A direct contrast to Europe is New Zealand’s embrace of capitalism. Beginning in the 1950’s, New Zealand was a protectionist, agricultural nation that soon developed into ‘Fortress New Zealand’. The government imposed high tariffs and virtually micro-managed agricultural production for decades. There were rampant subsidies for special interests groups, especially farmers. A collusion of three economically devastating events eventually convinced the people of New Zealand to liberalize their society. The oil crisis of the 70’s, Britain joining the EU, and the financial crisis of 1984 all brought New Zealand’s socialism to its knees. Britain was New Zealand’s main purchaser of agricultural goods and its departure to the EU left many farmers uncompetitive and impoverished in the new international market. The oil crisis and financial crisis were severe jolts to the economy that resulted in the government running out of cushioning funds. When bankruptcy hit, reform took off running. It took 6 years, but finally the people of New Zealand decided to throw off the shackles of collectivism. This small island nation in the South Pacific is now well known to be a vibrant, modern economy that has far surpassed any of its previous records of agricultural output. Today, It ranks 5th of 27 OECD nations of comparable size and wealth. Its unemployment rate reached an all time low of 3.4 % in December 2007. New Zealand embraced the free market and the world commercial network to become a monetary powerhouse of the Southern Hemisphere.
New Zealand is enjoying 3.4% unemployment while Europe averages 8%. Clearly there is a market for new workers with experience in New Zealand. In fact, a recent trend has been the exodus of knowledgeable persons from Europe, especially Britain, to fill New Zealand’s demand for talent. A capitalist society is one that promotes employment. A socialist state favors a cautionary and protectionist system that leaves many people jobless and acting as an anchor for the rest of the economy. Students will see their employment opportunities drastically reduced if Obama carries out an agenda similar to that of Europe. There will be a holistic decline of the American economy, all in the name of helping labor. We, as students, can only hope these policies aren’t enacted until after we’ve graduated and found employment.