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Brian Wesbury
Chief Economist
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Bob Stein
Deputy Chief Economist
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 | The White House on Building a Strong Economy — Grade: D+ |
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| Posted Under: Government • Press |
The Administration has taken up the mantle of growth. In a speech on June 14 in Cleveland, OH, the President said:
"And what's lacking is not the capacity to meet our challenges. What is lacking is our politics. And that's something entirely within your power to solve. So this November, you can remind the world how a strong economy is built — not from the top down, but from a growing, thriving middle class."
Capitalism is an organic, natural process that utilizes prices to send signals. When a capitalist system is allowed to function properly (freely), it generates cooperation, specialization, and service towards others. Every part (bottom, middle, and top) works together to lift living standards. But the key to creating wealth is the entrepreneur. Entrepreneurs tirelessly look for the best, most efficient, most profitable ways to allocate resources. Those who do this well accumulate more resources; those who fail lose resources.
The very nature of this process creates people at the "top" — those who earn profits from their efforts. To demonize these people is the antithesis of capitalism. Trying to level the playing field by regulating, taxing, or otherwise thwarting their efforts harms the entire system, which in turn hurts those in the middle and at the bottom. The idea that an entrepreneur only helps herself is a false idea. Entrepreneurs profit by providing goods and services that other people value.
Losing sight of this process — and pitting the middle class against the entrepreneur — is political. Moreover, if followed through to its conclusion, it would actually harm growth and therefore the middle class itself.
Click here to read my entire piece at the 4% Growth Project.
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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