Rich Gov, Poor Gov: Why Obama can't Fix the Economy
by: Scott Martin posted: 2009-06-15 22:08:00
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Last night, as I reread Robert Kiyosaki's 1997 Bestseller Rich Dad Poor Dad, I realized why Barack Obama will be unable to do what is necessary to fix America's economy. It's not just that he believes in government intervention in business, although that's a big part of it. But what makes it even worse is that President Obama is Poor Dad.
For those who haven't read the book, let me give you the gist so you can follow along. The author uses a fable, loosely-based on his life growing up. The purpose is to compare and contrast the differences between his highly-educated and professional father (who he refers to as Poor Dad) and his best friend's father, an informally educated, business savvy mentor (who he calls Rich Dad). I don't wish to debate the merits of the book, which I believe are plenteous if you can distinguish the good advice from the bad. It's irrelevant here, because I am only going to focus on the advice that is, in fact, generally good and true.
Let's get into it...
1. Poor Dad accumulates liabilities, while Rich Dad accumulates assets.
Rich Dad believes that most people spend their whole lives never getting out of the rat race because they accumulate liabilities instead of assets. They accumulate lines of credit, mortgages that they will never pay off, toys that depreciate the minute they are bought, etc...
This is not true of Obama in his personal finances. He has gotten some good advice recently. While President Obama didn't accumulate much of anything until his book revenue started coming in. Since then, he has shown that in his personal life, he understands building assets. He and his family are doing well.
But as we regularly see with Obama, what is good for his life is not what he advocates for America. What has Obama proposed and accomplished since taking office? The Federal Government has purchased one liability after another. Obama has purchased failing financial institutions, auto companies and picked up consumer credit debt. He has set America on a path of borrowing that seems as if it will never end. And if he gets his way, it never will.
That's because he also hopes to create a health care system that would eventually become the largest entitlement (government debt) program in the history of the world. He seeks to turn American productivity (an asset) into a cap and trade program (a liability) whereby productive companies will be taxed punitively for the very productivity they have created.
Obama has clearly signaled his intent to use the Federal Government to accumulate liabilities and punish America's greatest assets.
2. Poor Dad believes the rich owe the poor.
My two dads had opposing attitudes in thought. (Poor Dad) thought that the rich should pay more in taxes to take care of those less fortunate. (Rich Dad) said, "Taxes punish those who produce and reward those who don't produce."
So he promises to raise taxes on the top 5 percent of income earners, which only serves to unnecessarily punish the poor, who rely on the rich for jobs. Now relate this one to Obama's nanny state mentality, where we are the kids:
(Poor Dad) said, "The reason I'm not rich is because I have you kids." (Rich Dad) said, "The reason I must be rich is because I have you kids."
So Obama says that America is going further into debt because he has to take care of us kids, instead of deciding that America's finances must be made sound, so that us kids don't have to spend the rest of our lives taking care of government.
3. Poor Dad doesn't give charitably, Rich Dad gave liberally (by which I mean "not at all like a liberal.")
My Rich Dad gave lots of money away. He gave to his church, to his charities, to his foundation... (Poor Dad) always said, "When I have some extra money, I'll give it."
Both Obama and Joe Biden are Poor Dads, here. They are both downright stingy in their personal lives, with Obama apparently changing the above quote to: "When I'm trying to get elected President, then I'll give it."
Biden, in fact, makes an even better Poor Dad than Obama, having bragged that in all his time in Congress, he's still never really made anything of himself. (Joe Biden: Stingy, Hypocritical Bastard)
Poor Dad thinks government gives, not people.
4. Poor Dad thinks management (capital) exploits labor.
Rich Dad: "When it comes to money, most people want to play it safe and feel secure. So passion does not direct them. Fear does... (Obama loves to talk about the fear of average Americans today, which he sympathizes with and utilizes to make them more dependent on government.)
Some people say I exploit people because I don't pay as much as... the government. I say the people exploit themselves. It's their fear, not mine...
And besides, more money will not solve the problem. Just look at (Poor Dad). He makes a lot of money and he still can't pay his bills."
My point is not that the working class shouldn't make what they are worth. My point is that labor is not worth what capital is worth, because it is capital that takes the risk of losing all that it invests. If management loses all its investment, labor still gets paid for the time it worked. This is part of the trade-off between choosing your profession.
The safe route is generally not going to result in Obama trying to limit your pay. No, that is a penalty reserved for the capitalist, in Obama's world.
5. Most importantly... Poor Dad, while highly educated, doesn't understand economics.
Kiyosaki notes that knowledge of personal finances and economic principles are simply not taught in school, unless one actively seeks them out. I know this to be true, as I recently graduated from Arizona State University, and I never was required to take an economics class. In most courses, college professors belittle capitalism. It certainly is not understood by most professors, who have never had to succeed in anything but academia, where their ideas are never put to the test.
Poor Dad was brilliant, but knew nothing of how wealth is created. Clearly, neither does Obama. For he is the most Anti-business President this country has ever seen.
Democratic presidents are not famous for appointing businessmen, merchants, or entrepreneurs to their cabinet or senior White House staff. These are people who have started or run private businesses, created jobs, met payrolls, and made profits. Thus they might be sensitive to how government can help or hurt business enterprises, especially during an economic downturn.
The number of such people appointed by Obama: zero. Members of his cabinet and White House staff come predominantly from government, academia, think tanks, and the law. True, several were business consultants, Defense Secretary Bob Gates and Veterans Affairs Secretary Eric Shinseki served on corporate boards, and White House chief of staff Rahm Emanuel spent four years as an investment banker between government jobs.
But there's no one who ran a company, hired or fired workers, or was an entrepreneur. Obama doesn't qualify either. He worked as a lawyer, law school instructor, and community organizer. As a community organizer, he did many things, but starting a profit-making business and creating jobs weren't among them.
When Obama speaks of getting America back to work, of "creating or saving" jobs, has knows nothing of which he speaks. He has never created a job. He has never made a profit for a shareholder. He believes that government creates jobs, while business screws labor.
When Obama announced last week the acceleration of his economic "stimulus," he was referring only to programs run or funded by the federal government. He offered nothing, not even a tiny tax incentive, to encourage investment in business and private job creation. This reflects Obama's policy initiatives across the board. They rely entirely on more government spending, regulation, and control.
For these reasons alone, President Obama cannot and will not come up with policies that will improve the economy over the long haul. Sure, our economy should improve eventually, if only because America's greatest asset is its productive citizenry and the fact that things can hardly get worse. But Poor Dad's policies will never restore America to what it could, and should, be.
For that, we need someone who thinks like Rich Dad.
