Atlas Shrugged In America By Elliot Young As part of the Founders Keepers Series

Ayn Rands Atlas Shrugged is second only to the Bible as the most influential and popular book in America according to a Library of Congress survey. It is required reading for many college philosophy courses, as well during management training at BB&T, Americas twelfth largest bank, and one of the only to refuse TARP bailout funds. Since its publication, it has faced numerous criticisms, most of them hatchet jobs by the elite ivory tower left and even threats of government censorship, yet it has continued to be one of the best selling novels in human history. Since Barack Obama took office, Atlas Shrugged and Randian ideas have enjoyed a surge in popularity with skyrocketing sales and library waiting lists, and even the production of a feature film, because it more precisely explains our current economic woes than most anything else. What happens in Atlas Shrugged is happening in America right now, with the antibusiness Obama Administration reviling the private industries, and capitalizing on the economic crisis to expand and repurpose its investment within sectors of the economy, setting quotes, compensation, and influencing prices of almost everything. Whats happening with American businesses today parallels what happens in Rands novel, with the government expanding its control and oversight of the American economy and private enterprise, the businesses respond by retrenching, ceasing to invest in the market, ceasing to innovate, and ceasing to expand. Whole industries contract, close down, or move offshore. Management is discouraged and reluctant to create jobs in an environment of excessive government control and meddling. With a recored national debt of just over 14.3 trillion dollars, the 3 trillion dollars that is tied up in private industry waiting to be invested is as important as ever, because at current rates, in just four short years, our national debt will be 22.5 trillion. What holds back this investment is uncertainty and fear stemming from an overbearing and a financially out of control government. No savvy investor or businessman would ever attempt to spend his way back from the red. This isnt poker table 4 at LaMirage, but apparently the government thinks it has an infinite credit line, and that the casino would never have the guts to collect. Thats where they are wrong. The debt-financed (not paid for) Obama stimulus plan is not only failing to create jobs, but causing an inflationary crisis, for which we can look to the Weimar Republic for a potential end. In addition, Obamas QE1, QE2, and in-production QE3, will all contribute to further diluting the currency. QE stands for Quantitative Easing. What, you may ask is this innocent sounding name? What it boils down to the printing of more money. Essentially, the government thinks that by printing more money, it can finance its Lindsay Lohan style spending sprees, while simultaneously inflating the currency, thus inflating the prices of everything and screwing all the countries who hold the majority of our debt. A foreseeable end is a taking home your paychecks in wheelbarrows and the price of a cup of coffee rising while youre sipping it. This may sound extreme, but if the government has its way with the QE series, your dollar today will be worth 11 cents by 2015. Along with the loss of value, inflation of prices could make what cost 1 dollar today cost 9 dollars then. Then, theres the unemployment and the public versus private sector jobs. Recently, President Obama took credit for a 0.2% drop in the unemployment rate to 9.2%, and the creation of 71,000 private sector jobs, claiming that his policies of tax-print-bailout-and spend are working. In fact, many of those jobs werent even in the private sector, but rather were in the socialized automotive sector. The supposed decrease in unemployment actually resulted from 611,000 people giving up on finding work, and removing their names from the official government roles of the unemployed. Official statistics mask the underlying problem of a private-sector driven economy that is failing to create jobs. In fact, when all those who gave up on looking for jobs are accounted for since the recession began, the real unemployment rate can be calculated to be closer to 18%. While the private sector actually lost nearly 8 million jobs in the last 2.5 years, the government has increased its number by 240,000. The private sector is the source of national wealth and has been shrinking while supporting a growing public (government) sector that spends like its just won the lottery, yet doesnt really produce anything, especially since the government is going to sell its control of General Motors at a loss of 11 billion dollars to the taxpayers. That burden is exacerbated by the fact that government workers have incomes that average 30% higher and benefits that average 50% higher than those of private sector workers. This shift in workers that get salaries from the productive private sector to the unproductive and profligate public sector is worse than that in Rands Atlas Shrugged, and unlike private industry, the government doesnt pay people based on performance, but rather like a union shop. Unionized government is insanely difficult to dismantle and downsize because it is essentially the most powerful entitlement and nanny-state special interest group. Because of this, government controlled public schools are run by teachers unions that fail decade after decade without consequence or reform. The insanely quick passage of the government takeover of the healthcare industry through ObamaCare was a high priority of the

previous congress, not because it was good for most Americans, but because it allowed the ruling elite left to expand the difficult to dismantle government control, unionization, entitlement, and nanny state dependency. In addition to the outrageous spending on the welfare, entitlements, wars, loans to other countries, and the debts and interests on the loans that WE took out from other countries to do all of our spending and lending, we have a laggard economy. Some might argue that we must raise tax rates on the rich to facilitate the paying down of this deficit, however, the facts just dont support that action. It may be true that the top 1% of Americans represent 40% of the wealth and the bottom 80% have 8% of the wealth (projected 2011 data. Heritage Foundation), however, that 40% and 80% arent constant numbers and they grow larger every year. Moneymaking is not a zero sum game, meaning, contrary to liberal belief, that you dont have to take someone elses money to make your own. Wealth creation isnt people or businesses stealing money from the poor and making themselves richer. Life and wealthcreation dont inherently involve climbing over others to get where you want to go. Sure, placing higher taxes on those who have more money in theory seems like it would raise more revenue, however, the data proves otherwise. Data shows that since 1960, tax revenue as a percentage of GDP has stayed a steady 18-20%, even though taxes on the richest have been as high 91%. You might say, Well, thats because the GDP grows every year. And I would respond The GDP might change every year, but you are basing that idea off of actual dollars raised, which changes, and not percentage of the total wealth, which as a percentage is a constant way to measure the effectiveness of tax rates. Also, what other reason than changing taxpayer behavior would account for the relatively steady percentage of tax revenue? How does this work? Well, when taxes are raised, investors, and tax payers change their behavior accordingly so that they make relatively the same amount of money as before. This is why the tax revenue percentage stays the same. When the capital gains tax goes up, investors slow their realization of the gains. Conversely, when the capital gains tax goes down, investors speed up the realization of gains, making more money that increases tax revenues and is invested back into the market to keep the market alive. It is clear from this graph that the tax revenue has kept a pretty steady rate of 18-20% of GDP for 60 years, despite the fluctuating tax rate from as high as 91% to as low as just under 30%. Interestingly enough, even though the tax revenue as a percentage of GDP hasnt really changed over 60 years, the revenue in actual dollars has tripled, despite the changing tax rates. Simply put, this proves that there isnt much of a correlation between higher taxes and higher revenue.This is because the highest revenue in dollars in 2005 came from when taxes were among the lowest in 40 years, even though the revenue as a percentage of GDP was still around 18%. Unfortunately, raising taxes and tinkering with the tax code is like offering candy to a child, its irresistible. This idea is widespread even though higher tax rates will not lead to higher tax revenues. Our political leaders ignore the long-term consequences of changes to our tax system, advocating policies that dont fit with the economic reality. The mainstream media largely ignores the Obama Administrations drive to shift power and money from the productive private sector to the unproductive and improvident public government sector. In Atlas Shrugged, Rand calls this re-appropriation of power and money by the government, money that isnt even theirs, nothing but looting. Rands philosophy gives that the primary source of social good is the ingenuity and hard work of the private sector that produces wealth in the form of invention, industry, and technological revolution. Government crony capitalism, forced redistribution of wealth, invasive government regulations, and faceless government appointed czars is anything but virtuous or true to our Republic. Yes, we are a Republic, not a democracy. Rand warned that government policies that grow entitlement and hurt the Atlas that is the private sector economy, will lead to businesses to withhold from investment the money and jobs that form the massive backbone of our economy. The out of control government spending and economically detrimental regulations and policy enlarges dependence on the government, this making more people subordinate to government decisions, thus

increasing government power. That is the sum of the goal of the progressives. Not only does it make us all indentured servants to a commanded economy that the progressive/socialists say is for the good of the collective but it also is leading us toward a greater economic crisis that could be the end of the America that we know and love. Atlas may be shrugging, but America can be saved. It wont be easy. The highway has not more paved exits. It will be a bumpy ride where you may not be able to live as decadently as before, but it can be navigated. Until the government goes back to doing what it should (see Constitution, Federalist Papers), and the private sector rebounds, we can expect to see rising prices on much of everything, rising interest rates, increased unemployment and social unrest, and a stagnant economy. All thats left is to elect or keep in power those candidates who are truly committed to the idea of American exceptionalism and individualism, debt-reduction, and getting the government out of the way of private sector wealth and job creation.

UPDATE: 8.10.11: http://www.cato-at-liberty.org/atlas-shrugged-comes-todetroit/

Heres a very moving and physical representation of what left wing entitlement policy brings. Detroit is a real world analogue to the fictional world within Ayn Rands Atlas Shrugged, where the increasingly despotic and regulatory government causes a stagnant economy, inflation, and economic chaos. If Detroit doesnt give you enough proof, just look at our nations economy now. Our AAA credit rating survived the Great Depression, however it hasnt survived two and a half years of the BHO administrations socialist/progressive policies and has been officially downgraded to a AA+. Interest rates will skyrocket. Getting student loans will be more difficult, savings account and CD interest rates will plummet, and food and commodity prices will skyrocket. With the increased commodity prices, food company profits will sink, causing their stocks to sink, sinking an already hurting economy. Its only a matter of economics that as commodities rise, industrials sink. This will also cause a rise in gas prices (which as we know are already astronomically high), a rise in food and pharmaceutical prices, and a rise in the price of education (though that has been in a slight bubble for some time). Further weakening the economy will be QE3. Just to make sure you understand, thats not the successor to the cruise ship QE2. That is the third part of a series of quantitative easing measures taken by our federal reserve. They believe that by printing more money and releasing it into the economy, it will float the economy. This is at its root as falsehood because as you print more money, the overall Dollar is worth less and less. Since 1900, the Dollar has lost 96% of its value. The majority of that has been in the last 2.5 years. With QE3 started, the Obama administration has already injected 2.5 trillion dollars into the economy. This sounds great, but when nothing backs the currency, its all a shell game. Its fake. Its worthless. This devalued Dollar makes its buying power even further restricted, hurting the very people that the left thinks its helping: the poor. By reducing the buying power, what one could once buy for $10 in 2000, now costs on average $16. Despite the increased buying power of the poor now compared to in 1985, the stagflation created by THE GOVERNMENT, hurts.