Gingrich's rebuttal to Obama's big speech; Newt challenges Barack on the way forward on race and poverty.
CPSAN rebroadcasted Newt Gingrich's rebuttal to Barack Obama's historic speech on race and poverty speech several times over the weekend. Given at The American Enterprise Institute, Gingrich's speech was entitled, "What Is the Right Change to Help All Americans Pursue Happiness and Create Prosperity?" Few conservatives in America could have covered the landscape Gingrich covered; from the original sin of slavery, to the evils of segregation, Newt acknowledged the legitimate anger and sense of grievance within the black community in America. Where Gingrich parted ways with Obama was on the way forward. And the factors besides racism that led to the decay in many of America's inner cities. Gingrich boldly pinpointed much of urban America's decay on bad government, bad culture, and the relationship between the two. He then offered some bold solutions.
NEWT01: Here is Newt describing the destructive effects of segregation on African Americans. Few conservatives have this sense of understanding of the profound personal and economic consequences of Jim Crow. (.56 secs)
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"I did not encounter legal segregation until I was a junior in high school at Columbus, Georgia. Segregation was a horrible institution imposed by force by the state. It ruined the lives of people, it crippled their futures, it was a terrible injustice, and it is totally authentic to be angry about it. Obama notes, `the legalized discrimination-where blacks were prevented, often through violence, from owning property, or loans were not granted to African-American business owners, or black homeowners could not access FHA mortgages, or blacks were excluded from unions, or the police force, or fire departments-meant that black families could not amass any meaningful wealth to bequeath to future generations.' Anyone who thinks that there was not this destructive impact is simply not in touch with the reality of American history for African-Americans."
NEWT02: Gingrich then talked about the current system and its deficiencies. Why have things gone so wrong? Gingrich explains that slavery and segregation alone don't explain it. It is bad government and bad culture, both born in the 1960's . (.51 secs)
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"The tragic truth is that the current system is not working because of two topics we don't like to talk about: bad culture and bad government. And bad culture and bad government intersect to reinforce each other, to create human and financial cost beyond anything we could have imagined a quarter century ago. The tragic truth is that at the end of segregation, the great moment of opportunity for African-Americans, we had a failure of government and a failure of culture. The rise of big bureaucracy in the Great Society starting in 1965 combined with the rise of a counterculture which despised middle class values and which taught the poor patterns and habits of destruction-and those two patterns of bad bureaucracy reinforcing bad culture have led to a disaster."
NEWT03: Gingrich then started to talk about the destructive nature of bad culture, and the signals bad government sends. (.58 secs)
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"The bad cultural signals are routine, they're pervasive in the mass media. They surround us. They're in songs, they're on television, they're in radio, and they are really destructive of sound behavior and of the opportunity to get out of poverty. You don't have a community that creates wealth that ends up prosperous and safe and gives kids a better future if everyone is taught to stand around demanding that somebody else pay for everything. And this is a core challenge. Should this be a country in which every person learns to work, every person learns to save, every person learns to have a better future, and, by the way, is therefore responsible for working, saving, and creating a better future? Or is this a country where you shouldn't have to do all those things because it's too hard, and someone should take care of you? In which case, the question becomes: who's the someone, and why do you think they'll stay here?"
NEWT04: Gingrich talked about the two things that produce prosperity and good culture. This may have been the most profound part of the speech - and a part Obama's Leftist ideology doesn't comprehend. (2.02 secs)
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"There are two things wrong with the Left's approach to culture and prosperity-which is to raise taxes, increase government, and essentially allow people to avoid effort by insisting that they be taken care of. The first is: if your ethnic group is poor, the number one thing you want them to do is to go into business because that's where they'll create wealth. And when they create wealth they'll hire their relatives, and they'll hire their neighbors. And a generation of entrepreneurs can mop up poverty at a rate no bureaucracy can imagine. And yet, nowhere among current left-wing critiques of America, and nowhere among those who most publicly spend time worrying about the poor, do you hear a constant drumbeat that says: Let's try to turn every young person into an entrepreneur. Let's try to teach them how to create a business. Let's see if they can't bring wealth into the community by earning it, and in the process they will mop up the poverty by the act of hiring everybody they went to school with. This has worked for every ethnic group that has risen in American history, including, by the way, genuine African-Americans who come from Africa, or Caribbean-Americans who come from the Caribbean. As long as you focus on earning a living in America, and you focus on being prudent, you rise. People have risen whether they were Jewish, Irish, Italian, Greek, Turkish, Chinese, Korean, Vietnamese, Indian, Pakistani. It's astonishing in America how many groups rise. But they rise by learning the rules of rising. And the first rule is to make business and the development of wealth and the creation of economic opportunity more important than politics and to focus resources on encouraging people to go into business, not bureaucracy."
NEWT05: Gingrich then explained WHY lower tax rates matter - it puts entrepreneurs in charge of job creation, not bureaucrats. (.35 secs)
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"The second great ground rule is simple. In a healthy society, you want the smallest possible tax rate because you want the maximum resources with people who know how to create jobs. And the choice is simple: do you make the politician or the bureaucrat more powerful by giving them more money, or do you make the job creator more effective by letting them have the money. But does anyone seriously want to argue that the bureaucrat is more likely to create the next million jobs than the entrepreneur? Very few Americans believe this. And yet it's the base of much of our current politics."
NEWT06: Gingrich then spoke about the power of low tax rates around the world - from Ireland to South Korea. Will The Left study these successes? Newt says no and goes on to add that if liberals coached sports, they would study losing teams, not winners!! (Funny moment ..) . (1.23 secs)
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"If you go back and look, in 1960, South Korea and Ghana had the same per capita income. Today, South Korea is the eleventh wealthiest nation in the world, with a high tech base of its industrial sector in the world market. Forty years ago, the leading export of Ireland was its children because they had no jobs. Ireland adopted a low tax 12 and a half percent corporate rate, very rigorous rule of law, investment in education and infrastructure, and today Ireland has a higher per capita income than Germany, although they're in danger of messing it up by raising taxes and creating new work rules. But today, they are 50,000 guest workers from Eastern Europe working Ireland because they have a labor shortage. Something that was literally inconceivable, yet who on the Left is prepared to study South Korea and Ireland? Who is prepared to study success? It's as though, if politics were sports, the primary pattern of the Left would be to study the losing team. And ask whether they had psychological anguish at coming in last for the thirteenth straight year. And you would only want coaches who were compassionate in defeat because you'd expect them to be defeated every game and therefore you'd want to make sure they felt with their players during the long ride home. You'll notice that in sports we don't have this model. Or at least no one will go to the games that are played by the teams who have that model. But that's the heart of the American political structure today."
NEWT07: Then it was back to the theme bad culture and bad government. Newt pointed out that the simple act of leaving such places can create wealth! But left in places where bad government and bad culture thrive, it is very difficult to succeed. (.47 secs)
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"The majority of poor communities are poor because of a combination of bad culture and bad government. And in fact the people in those communities who leave become fairly wealthy as soon as they go to a place that has money. Because they learn very rapidly to show up at work on time, to actually keep part of their paycheck every week, to do all the things successful people do. And this is not an easy problem. It was not an easy problem in Welsh villages. It is not an easy problem in rural France. It is not an easy problem anywhere on the planet. When you have cultures that are preindustrial, and you have people who don't have the habit of work, they don't have the habit of saving, they don't have any willingness to pursue opportunity, it is very hard to change them."
NEWT08: Newt challenged Barack Obama to talk about Detroit. Newt's description of the rise and fall of the once great city is compelling, and his challenge to Obama to make Detroit, and how to fix it, a centerpiece of the 2008 campaign, was even more compelling. . (2.36 secs)
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"The collapse of Detroit, from 1950 to 2008, which I think should be the centerpiece of the fall campaign, because it is the case study in bad culture and bad government. Detroit in 1950 had 1,800,000 people. Last year, it dropped below 900,000: Detroit had three times the out-migration rate of any other city in the United States. Twenty-seven thousand additional people fled Detroit. It dropped from being the number one per capita income city in the United States to ranking number sixty-second. Now, you could say, well, it's all the auto industry's fault. That's simply not true. First of all, there are large parts of America that have very successful auto industries. They tend to be in right-to-work states with low tax rates and without the United Auto Workers. But they're quite successful. We've had a very large increase in factories that produce cars. Second, even in Michigan, despite a very destructive governor and a very destructive state legislature, Grand Rapids is in the middle of a building boom. Now why is Grand Rapids, on the western side of Michigan, growing dramatically while Detroit, on the eastern side of Michigan, is continuing to collapse? The results are even worse. The best estimate of the Gates Foundation was that a freshman entering the Detroit school system had one chance in four of graduating on time. Three out of four children in Detroit are being cheated by one of the most expensive school bureaucracies in America. But that's because we measure the wrong metric. The primary metric of the Detroit school bureaucracy has nothing to do with the children. It has to do with whether or not the paychecks are issued every month. And it has been a stunningly effective bureaucracy at issuing paychecks. It just doesn't do anything for the paychecks. And yet no one wants to talk about this. So start with the idea that if we're going to have an honest conversation, we ought to start with Detroit because if we can't have an honest conversation about how big a disaster Detroit is, we sure can't have an honest conversation about poverty in America, and we sure can't have a conversation about what needs to change. It's that simple and that direct. And I think virtually no one on the Left is prepared today to talk candidly about Detroit because it is their institutions and their culture which has caused the collapse."
NEWT09: Next then offers solutions. If you want a culture of prosperity, you must start with fundamental cultural change, with a government that reinforces that change. So if you want a culture of prosperity, the values of that culture must be established, and The Government must send correct signals to the reinforce those values. (.47 secs)
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"If you want to replace a world of poverty with a world of prosperity, it begins with fundamental cultural change. And if you want to reinforce that cultural change, you want to design government policies that reward the right behaviors and make it expensive to have the wrong behaviors. This is not complicated, but I want to repeat it. The first step is to decide the culture that you want, and if you want a culture of prosperity, you have to establish the values of that culture. You then have to redesign government so it is rewarding those who follow the culture of prosperity and making it expensive for those who in fact are determined to reject being part of the world of prosperity. Because you want to send signals that say this is the right way to go, this is the wrong way to go. This is the heart of how healthy societies operate."
NEWT10: Newt then talked about the power of lowering tax rates all over the world; lowering all taxes, from individual rates to corporate rates and capital gains taxes too. Obama - and The Left - want to do the very opposite, and punish businesses and capital! So much for reviving Detroit! (1.19 secs)
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"The fact is that everywhere on the planet where people have low tax, limited regulation, limited litigation models, jobs spring up. When you can pay 12.5 percent in Ireland or 35 percent federal income tax plus whatever your state tax is, people are not going to put their assets in the United States. I believe that we can compete with China and India, but I believe to compete with China and India you have to have a fundamental overhaul of the tax system. You probably have to abolish the capital gains tax. You certainly ought to compete with Ireland with a 12.5 percent corporate tax rate. You should probably have 100 percent expensing so that people replace their factory equipment every year.
But if we want to have a serious conversation about what would it take to compete with China and India, that would be a good national dialogue. It just wouldn't fit any of the current, political rhetoric. The current political rhetoric will move us closest to Detroit as a model for the country. It will raise taxes, drive out businesses, dry out jobs, slow up entrepreneurship, and convince brilliant foreigners not to come to the U.S. because this won't be the best place to create jobs and wealth."
