Last Updated:April 23 @ 08:02 am

Kudlow: Reagan Praised Entrepreneurs - Obama Trashes Them

By Lawrence Kudlow

Does anybody remember, back in the depths of the recession of 1981-82, how President Ronald Reagan kept his chin up and exhorted American businesses to work hard and produce an economic recovery?

Reagan had a program of tax cuts, limited domestic spending, deregulation and a strong defense aimed at overturning Soviet communism. He argued in speech after speech that his domestic plan would produce higher economic growth and lower unemployment, and that prosperity would generate the resources to fund a strong national security.

Cynics proliferated. But Reagan stayed with it, praising free enterprise and entrepreneurs. And eventually, sunny skies replaced gloomy clouds. "Morning in America" appeared in 1983-84.

But here's the key point: When Reagan praised our capitalist system and the businesses inside it, he provided a  psychological  lift to accompany his fiscal program. That was leadership.

Now contrast President Reagan's performance with President Obama's recent attack on business. Instead of exhorting entrepreneurship, Obama demonized it. Here's the money quote: "If you've got a business, you didn't build that. Somebody else made that happen."

That's a  put down  to business recovery, not an exhortation. Reagan praised entrepreneurs into recovery. Why must Obama trash them into recession?

Great innovators like Thomas Alva Edison, Henry Ford and Andrew Carnegie didn't rely on government. There was hardly any of it in those days. More recently, Steve Jobs, Bill Gates and Larry Ellison used  genius  to put brand-new ideas into production.

And then you've got a whole smaller class of entrepreneurs: the electricians, bakers, clothing designers and financial planners. They don't depend on government. It's always been a question of the American genius of entrepreneurship that makes the country run. And that's  optimism.  It's not name-calling or negativism. But it is the reliance on government under Obama that has undermined the morale of our economy.

In an interview this week with Tim Geithner, the treasury secretary said the problem with the economy is insufficient government spending. But I would argue that government spending  is  the problem.

A week earlier, I interviewed Alan Greenspan. I asked him about the impact of over $1 trillion in federal spending. He answered, "Well, actually, strangely as it may seem, the data are showing that it's negative." Greenspan said businesses -- especially smaller businesses -- are essentially on a capital strike. They see large-scale deficits and debt and assume that prohibitive tax rates cannot be far behind.

Greenspan also said the U.S. government has borrowed so much money it has drained scarce capital from the private sector. Nobody wants to build long-term assets, like factories, buildings and houses.

Obama does not understand that his government-centered model is doing vastly more harm than good. That's why, three and a half years in, he's got slumping numbers on jobs, retail sales, manufacturing and home sales, and a gross domestic product rate that could be 1 percent or less. We may be on the front end of another recession without even going through a real recovery.

And the center of economic gravity has shifted in the wrong direction. Food stamps are soaring. Social Security disability benefits are rising faster than jobs. And roughly half of U.S. households are receiving federal-transfer-payment assistance. This is a European-style model, not an American one.

Then you have some of the dumbest fiscal ideas ever, like the new one from Sen. Patty Murray. She wants all the Bush tax cuts to expire on Dec. 31, 2012 -- an event that will surely lead to recession -- and then have Congress magically vote for middle-class tax cuts in 2013. This is incredibly foolish (and improbable).

But like Obama, Murray has it out for successful earners, investors and small-business owners. In order to tax them, she is more than willing to risk recession.

Raising the tax on the upper-two income brackets would slam the 3.5 percent of small-business owners who generate 53 percent of the small-business income, according to the Joint Tax Committee. And  that's  where the jobs are.

Ernst & Young estimates a job loss of 710,000 if those upper tax brackets are raised. And when you combine all that with scheduled new taxes from Obamacare, you're looking at substantially higher tax rates than anything Bill Clinton ever had. And of course, Clinton  cut  the capital gains tax. But today's Democrats want to raise it (along with taxes on dividends and estates).

This whole assault on success by left-wing politicians is a staggering reversal from the spirit of Ronald Reagan. You can even go back to FDR: His big-government, tax-the-rich policies failed, but at least he preached that happy days were coming again.

Most Democrats today don't understand or recall the history of American economic success. That's why this country desperately needs change in the White House  and  the Senate if we're to stop this American economic decline.

---

COPYRIGHT 2012 CREATORS.COM

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23 Comments

  1. jb80538Comment by jb80538
    July 21, 2012 @ 9:10 am

    obama knows absolutely nothing about running a business. He needs to go away!

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  2. genesalComment by genesal
    July 21, 2012 @ 9:32 am

    Incompetence breeds inadequacy. The story of O’s life.

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  3. joelinpdxComment by joelinpdx
    July 21, 2012 @ 9:51 am

    The big difference, Reagan was a seasoned manager having run California’s government for eight years. Obozo is learning to run the US government OJT…and he isn’t learning it very well.

    Obozo came to his position with the lessons learned at the knees of Saul Alinsky and other socialists and communists. He wants to make America the great wealth redistribution society. He wants to take from the haves and give it to the “Occupiers” who are pledged not to work for a living.

    For Obozo, I repeat the words of Mrs. Thatcher (although I know he’ll never get it), “The trouble with socialism is that eventually you run out of other people’s money.” It’s really a pretty simple thought…Obozo is just too simple to understand it.

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  4. feduptaxpayerComment by feduptaxpayer
    July 21, 2012 @ 10:05 am

    While piecing together quotes for political advantage as Kudlow has done here is all fun and games, reality is we don’t want to pay bills for gov’t services now that we’ve gobbled them all up. We borrow a third more than we spend and make future promises to ourselves we can no longer afford. Reagan did it and now Obama does it, all because we as citizens lack the maturity as a nation to admit, whether we like it or not, that it’s payback time.

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    • jimComment by jim
      July 21, 2012 @ 4:39 pm

      You are (sadly) right. We have kicked the can down the road and it’s about to go over a cliff.I live on a fixed retirement income and REAL disability pay, both of which I paid into the 34 years I was able to work. I’m therefore “entitled” to my benefits. BUT, and this is a BIG BUT, Some of us who are in the lower classes may have to volutarily agree to a cut in, say, the 2-3% range and kick the millionaires and billionaires completely off the SS rolls just to ensure our future benefits will at least be enough to feed and provide shelter for all of us. We have, in short, run out of other peoples’ money. Now we need to “suck it up” and go like we Americans always have.

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  5. JDZComment by JDZ
    July 21, 2012 @ 10:09 am

    What continues to confuse me is why anyone with reasonable commonsense does not see what is happening to our country under these politicians that continue to push “social justice” policies without any rational limits on what the economy and taxpayers can afford. The obvious financially related metrics like unemployment, national debt, budget deficits, the eroding tax base, and huge sums of borrowed money that are all negative for the economy and financial health of the country are all there for everyone to see.

    It is like huge numbers of the voting public are either apathetically ignorant or are just in denial and refuse to face up to our critical situation. They continue to vote for liberal politicians that tell them not to worry that they will continue to “have their backs” and what, “provide for them”? Much like Obama has promised them starting in 2008 but actually cannot deliver anymore as he just continues to dig the hole we are in much deeper.

    I live in California which has been run by a liberal legislature since Gerry Brown was Governor in the early 1970′s even though Reagan and Schwartzeneger spent some time as Governor. The liberal policies pushed by liberal activists and public service unions have turned the state from the strong leadership example for the country into the worst example of how to run a state. It is a mess out here and it is going to get worse before it gets better. And, the denial of the root causes of this prominent negative slide is so obvious when you just use good commonsense and step back and look at what is happening. It is now happening at the national level.

    We see high unemployment, uncontrolled government borrowing and spending, huge and rapidly growing national debt, more and more Americans enrolling in government subsidy programs like food stamps, disability, and unemployment, and fewer Americans paying federal income tax. The dynamics of our situation are disasterous.

    Barack Obama’s policies are making all of these metrics worse and I am convinced that he has put his “social justice” obsession above what is best for our country at large and is willing to risk the future of America to satisfy HIS ideological objectives. This latest inadvertent admission of how he feels about entrepreneurs and individual achievement confirms his hatred for capitalism. He should never…NEVER..have been elected to a national political office, let alone the Presidency.

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    • jimComment by jim
      July 21, 2012 @ 4:48 pm

      To stimulate jobs, you have to have had at least one job yourself. When I was a kid, “Community Organizers” and their followers were called GANGS. We ought to require that any man running for president must have worked at SOMETHING during his life and drawn an honest day’s pay for an honest day’s work. That would disqualify B.O.

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  6. Pingback: Kudlow: Reagan Praised Entrepreneurs – Obama Trashes Them — ExposeTheMedia.com

  7. feduptaxpayerComment by feduptaxpayer
    July 21, 2012 @ 11:00 am

    JDZ is another American in denial. We have a budget problem in this country, not a spending problem. JDZ sounds like one of these guys on a military pension bitching about handouts.

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    • JDZComment by JDZ
      July 21, 2012 @ 11:06 am

      I guess I found the culprit. Do you really pay your “fair share” of taxes? Your are definitely one of those in denial of what is going on in his country if you think it is a budget problem. Now that we know who you are and what you are, let the games begin. Go for it.

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    • genesalComment by genesal
      July 21, 2012 @ 11:19 am

      It is a budget problem, DUE TO A MAJOR SPENDING PROBLEM. We could balance the ‘Budget’ for 10,000 years and will have accomplished nothing.
      That’s before you even make 0ne payment on the debt outstanding.

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    • feduptaxpayerComment by feduptaxpayer
      July 21, 2012 @ 7:25 pm

      Apologies JDZ. I am not the culprit, don’t even know how to vote on this site. First time here. I had the text editor on, tapped out a couple of sentences more or less as a note to myself and inadvertently, the half-witted comment above turned up here. First time I have been on this siteso sorry.

      As to paying “my fair share” of taxes, that’s a tough one. I feel like we all get more out of our government than we pay for in taxes, that’s for sure. I am very satisfied with government services overall, and don’t really have any agenda or want to play any games. Just think it’s time we all started paying for the privledge and pleasure of living in America, myself included.

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  8. JDZComment by JDZ
    July 21, 2012 @ 11:01 am

    I noticed that I got a “1″ vote on my post by someone which, to me smells a bit. I didn’t think I was that radical in my views. Do you think that we have some dumbo liberals coming onto this website attempting to affect perceptions of our commentary? Obama lovers tuning in to what we are saying maybe?

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    • genesalComment by genesal
      July 21, 2012 @ 11:21 am

      They’ve swarmed this site along with the atheists and other detractors and deflectors.

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    • yourworstnightmareComment by yourworstnightmare
      July 21, 2012 @ 2:04 pm

      How can you tell what the ‘votes’ for you were and really, why does it matter? It’s no secret that no matter what your opinion, someone will disagree and find you (or me) unreasonable.

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    • paanoflyComment by paanofly
      July 21, 2012 @ 2:39 pm

      @ JDZ and genesal re: liberals posting here

      I’m a Libertarian and dislike both major parties almost equally, but reserve the most disdain for the social-democrats now controlling the senate and the executive. That said, I would not deny anyone their first amendment right to speak their mind no matter how misguided that mind may be. Though I disagree most vigorously with 99.9% of what the social-democrats say and do, only open discourse and intelligent argument will win the day. I believe Thomas Jefferson first said, “I may disagree with what you say, but I will defend to the death your right to say it.” Counter their ignorance with accurate facts and logical argument.

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    • genesalComment by genesal
      July 21, 2012 @ 4:08 pm

      I beg to differ with you. Open discourse between Conservatives and the Social-Democrats as you put it, Socialist anti-Constitutionalists, as I put it, is now and has been for some time become futile. I don’t hear intelligent arguments or discussion coming from the Socialist side, all I hear is parrot noises. People parroting their savior O’. Yes, they might have the Right to come here and Troll and Flame and trash the discourse we’re trying to have but that doesn’t make it Right.

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  9. JDZComment by JDZ
    July 21, 2012 @ 11:54 am

    Genesal,

    You are absolutely right that it is also a budget problem with spending far over revenues coming in to pay the “bills” which then forces the massive government borrowing to bridge the gap. Typical solution by liberals is to raise taxes and fees combined with more borrowing instead of cutting spending except on our national defense which they really could care less about. They will always go after defense spending and use that as part of their extortion techniques to get what they want for the ballooning entitlement expenditures.

    This has been the scenario we have watched for years as our government behemoth continues to grow and require more and more money to feed it with government entitlement and “social justice” programs being the fastest growing financial liability that is unsustainable both near term and longer term.

    The Obama administration has been operating without an approved budget for over three years and what is with that?

    There is definitely a budget problem, isn’t there?

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  10. jhcsrComment by jhcsr
    July 21, 2012 @ 12:40 pm

    From your article: “Obama does not understand that his government-centered model is doing vastly more harm than good.” I disagree. I think Obama knows exactly what he is doing & the results are exactly what he wants.

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    • perbobComment by perbob
      July 21, 2012 @ 2:00 pm

      jhscr

      You are 100% correct. All the hand-wringing about the “O” not knowing wazzup is total BS. His Administration, liberal Congress and MSM finally got their team onto the field to bring this country permanently to it’s knees. Our nation has been so dumbed-down & duped-up that everyone just can’t wait to slurp-up all the koolaid being served to us.

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  11. yourworstnightmareComment by yourworstnightmare
    July 21, 2012 @ 2:00 pm

    With all due respect, I don’t think Obama hates entrepreneurs. I think he appreciates people who start new businesses as much as anyone. However, when he wants to tax people making over a quarter of a million dollars a year, I think he realizes that most of these people are not job creators, they are wage earners. I work for a large bank in a non-managerial position. While I have a good salary, it’s less than a quarter of a million dollars. My boss does make over a quarter of a million dollars, though. There are roughly 10 layers of management above him. I’m sure they all make more than he does. If any of these people had their taxes raised, they would not hire fewer people or lay people off. I think these people are the majority of the people who make over a quarter of a million dollars a year. Many friends from high school did become small business owners. To be frank, many of them only became prosperous because they were able to ‘cook the books’ a bit to hide income from the government. As I’ve come to know other small business owners, it’s my opinion that almost all do this. They’d prefer payment in cash and may give a small discount if customers comply. They purchase things for their homes and family members, call them business expenses and then use the receipts to lower their tax burden. At restaurant meals with groups of friends, they offer to pay with a card and then be reimbursed with cash. Large corporations hide their income in foreign banks on a Caribbean Island or in Europe. GE, Microsoft, Exxon, Caterpillar, Citibank – the list of large corporations that pay no or little in taxes practically matches the Dow. Perhaps the revenue side does have to be looked at, at least in making the burden fairer.

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    • perbobComment by perbob
      July 21, 2012 @ 2:50 pm

      WOWZERZ…I eyes glaze over. Slow down on that koolaid friend.

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    • feduptaxpayerComment by feduptaxpayer
      July 21, 2012 @ 7:36 pm

      Youworstnightmare. Amen. I am with you on figuring out a way to make the tax burden fairer. People like you w/ a job really get screwed over on taxes as compared to people who are self-employed. The widespread cheating to which you refer is viewed by some as tax incentives to encourage the replacement of salaried employees with independent contractors.

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    • newrepublicanComment by newrepublican
      July 23, 2012 @ 12:31 pm

      Be totally fair to the GE and MSMs of the world. The FED GOV passes the tax laws that allow for tax breaks for defined winning topics such as technology research and development, exploratory research, etc. The FED GOVT needs to STOP defining the winners and losers via tax breaks … go to a flat/fair/etc. system that ELIMINATES the IRS and the problems becomes vastly more simple.

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