Austin Hill

The system has failed.”

Have you heard this comment lately? Does it express how you feel about America?

This one sentence, vague as it is, nonetheless captures a common sentiment about the current condition of the United States.

With the “occupy” protesters disrupting civic life around the country and President Obama publicly bonding with them, we’re seeing that magical phrase – “the system has failed” – being used in increasingly ambiguous ways. So it makes sense that the rest of us should ask a couple of important questions: What “system” are they talking about? And in what sense has that system “failed?”

At times it would appear that the occupiers are decrying our American system of constitutional, elective and representative government. “Our voices aren’t being heard,” many of them will say, implying that they are being trampled-upon by an abusive dictatorial regime.

But if you probe deeper and ask “what do you mean by that?,” it often becomes apparent that what the occupiers are really saying is “my policy ideas were rejected,” “the election didn’t turn out the way it should have,” or “I disagree with the outcome of the legislative vote (the congressional rejection of the Obama tax hikes is a perfect example of this).”

Thus, the claim that “the system has failed” implies a very self-centered, narcissistic view of the world – “the system is not producing the policies that I want, so therefore the entire system is wrong.”

Another component to the “not being heard” claim is the fact that many of the occupiers seem disinterested in participating in the processes of making public policy. Pollster Doug Schoen recently noted in the Wall Street Journal that while an overwhelming majority of the occupiers voted for President Obama in 2008, less than half will vote to re-elect him and at least 25% won’t vote at all in 2012.

Similarly, in a recent interview I did with occupier “Christine,” the intelligent and articulate 25 year old gushed on my daily talk show about how the movement signals a “new awakening” where people are “letting their voices be heard.” Yet when I asked, she couldn’t name any elected official who represents her in the U.S. Congress, her state legislature, her city council or school board, and she openly admitted that she did not vote in the 2008 presidential election.

At other times, the occupiers seem to be saying that our free-market economic system has failed. Some of this rhetoric implies a very simple, socialistic, “it’s unfair if one person achieves more than the other” type of mindset. Other occupiers present more complex concerns, as does the unnamed Los Angeles occupier who appears in the now-famous “WTF is going on?” Youtube video.

“I’ve been an electrician for ten years,” the man in the video shouts into a bullhorn. “My wife is a nurse….we both have good jobs…and we can’t afford a house…That aint right!...What is going on?” he cries.

These types of frustrations are real and common. But the angry outbursts suggest a lack of interest in understanding important economic concepts like the relative worth of “things” – the value of labor, and durable goods, for example – and the variable value of the currency.

Perhaps most noteworthy about our alleged “system failure,” is President Obama implying that he wants to replace it. Most of the reaction to the President’s recent interview with ABC News focused on the fact that he said, in no uncertain terms, that he is “on their side” – on the side of the occupier protesters, that is, and apparently not on the side of the rest of us Americans.

However the more intriguing comments from the President were mostly un-noticed. “We want to set up a system in which hard work, responsibility, doing what you’re supposed to do, is rewarded,” Mr. Obama stated, “and that people who are irresponsible, who are reckless, who don’t feel a sense of obligation to their communities and their companies and their workers, that those folks aren’t rewarded.”

The President and the protesters may be shocked to learn this, but our free-market, capitalist economic system is already designed to accomplish this, and it does so pretty well – when it is truly “free” and competitive. When government refrains from punishing success with threats of ever-increasing taxation and regulation, people get rewarded for their hard work and responsibility and they’re incentivized to continue achieving. And when government allows businesses to compete with each other, excellence rises to the top and inferiority is allowed to fail.

President Obama has pursued policies that move us in the exact opposite direction. High-achievers are maligned in the President’s rhetoric and policy proposals. Mis-managed companies – failed banks and car companies in particular – are given “government bailouts.” And businesses that meet Barack Obama’s individual, political needs – G.E., General Motors, Solyndra, and Fisker Automotive of Finland, to name a few - are granted special privileges and waivers so as to become pre-determined successes.

The American “system” has not failed – not our economic system, nor our political system. But many of our currently elected government officials need to be replaced, along with many of their policies.


Austin Hill

Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.