On Incentives

"Never penalize those who work for us for mistakes or reward them for being right about markets. It will go to their heads, is counterproductive and, in any event, material compensation will not correlate with their ability to predict the future next time."

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Writings & Speeches

The Speech Obama Never Made

I know there’s been a lot of talk in the last few months about the role of government in our lives. The fact is we are at risk that my opponent’s party would dismantle much of what has been accomplished over decades. They have been waiting since the days of Franklin Roosevelt to do exactly that. Just listen to what they say — what they whisper behind closed doors; ask yourselves who drives their agenda. But first, my fellow Americans, reflect for a moment on what we have. Look around. What do you see?

  • Social Security;
  • Minimum wage and hour laws;
  • Protection of our national natural resources;
  • An environment, immeasurably cleaner and safer and healthier;
  • Child labor laws;
  • Unemployment compensation;
  • An environment which facilitates innovation and research through government support;
  • Workman’s compensation;
  • Purer foods, safer drugs;
  •  Financial support for college education;
  •  Parks, recreational facilities, highways, ports, dams, bridges;
  •  Medicare;
  • Public  schools;
  • A government which has supported in hundreds of ways, the private sector;
  •  Land-grant colleges;
  • Civil rights;
  • A legal system which protects our freedoms every moment;
  • Civil liberties which have supported our right to live by different lifestyles;
  • It is your government which has initiated equal pay for women.
  • It is your government which has provided us with a military second to none.
  • It is your government which has encouraged competition, prohibited predatory pricing and prevented monopolistic pricing of goods and services.
  • It is your government which has provided support for the elderly, the disabled, the poor, and, yes, even those who didn’t need it.

That is what you see.

The list can go into the hundreds of large and small interventions.

The fact is we have established a covenant, a consensus between government and the private sector and labor. It has taken a long time to establish that consensus. Yes, reasonable people will debate when and how to rebalance that consensus and adjust the relative position of each in response to changing political, international and economic conditions. But a consensus is there. My opponent’s party, however, would fundamentally degrade that consensus and what it has produced, and, indeed, would repeal much of what has been done:

  • Vouchers instead of Medicare; 
  • Privatization of Social Security;
  • Criminalization of lifestyles;
  • Weakened regulation protecting investors and consumers;
  • Making sure the upper 2% even further increases its distance from everyone else;

But not to worry, they say — in return, all interest earned on saving and bank deposits would be free of tax — that 2/10 of 1% interest! So, if you are fortunate enough to have $25,000 in the bank, you will save exactly $12 a year from their tax benefit. But in the interest of fairness, they say that great advantage would be denied all millionaires.

Let me sum it up. I find their positions, their proposals, their policies, dangerous and intolerable. That is why they are vague as to details, but their intentions are clear. Just pay attention to what they say behind closed doors, who they appeal to. Just listen to their major supporters. Just listen to what they stand for. Just listen to their rhetoric when they seek party support. Just listen to their whispers. Their policies would undo decades of advances in the human condition.