Brother, Can You Spare a Fish?

Obama criticized Senate Republicans on Monday for blocking a $33.9 billion extension of jobless benefits and leaving more than 2.5 million Americans without jobs and no unemployment checks. Obama's position: "they finally decided to make their stand on the backs of the unemployed. They've got no problem spending money on tax breaks for folks at the top, but they object to helping folks laid off in this recession.”

Republicans are not against helping the jobless but they do want spending to be offset by budget cuts so that it does not increase the deficit. “The Democrat way is to insist we add to the national debt at the same time, while blocking Republican efforts to pass the same extension without the debt,” said Don Stewart, spokesman for Senate minority leader Mitch McConnell.

It is about time that this administration wake up and understand that the best path to economic growth is to teach people how to fish, not continue to fish for them. While fishing for others does assuage our personal inner need to believe we are helping others, it actually is inefficient, produces continued dependency, and prolongs the day of reckoning.

For people who need a history lesson, I refer you to a book by William Easterly, The White Man’s Burden. Easterly is a former senior research economist at the World Bank. His book quantitatively and qualitatively examines the efficacy of 50 years of the United States war on global poverty only to find that: (1) many people are fated to live horribly stunted miserable lives and die early deaths and (2) after 50 years and more than $2.3 trillion in aid from the West addressing the first tragedy there is shockingly little to show for it. Easterly’s conclusion: we will never start to solve the first tragedy, unless we figure out how to solve the second.

Throwing large amounts of money at the problem – especially from the top down – does nothing to solve the poverty problem. It only makes it worse. Why? Because when rules are imposed from the top and large amounts of money are involved, those at the top benefit first due to graft, corruption, and inefficiency, and the bureaucratic rules that come with the largesse destroy small business, who are unable to comply with all the red tape. Only businesses “too big to fail” have the economies of scale and capital structure to take advantage of this approach. So what you get is more of the same: failing societies.

For those of us who own small businesses, we understand this to be true, even in America. The Obama administration needs a lesson in creating wealth, not redistributing it. Until then, brother can you spare a fish?