Why 'Atlas Shrugged' is flying off the bookshelvesBy Scott S. Powell USA TODAYTHIS IS USA TODAY PRINTING THIS !!According to a Library of Congress survey, Atlas Shrugged, published in 1957, may be second to the Bible as the most influential book read in America. It is required reading in management training at BB&T, the 12th-largest bank in the U.S. and one that resisted taking TARP bailout funds. Since the Obama administration took office, Atlas Shrugged has been making a renaissance with rising sales and library waiting lists, partly because it explains our current economic woes more straightforwardly than most of what we hear from today's experts.What happened in Ayn Rand's narrative is coming to pass today, with an anti-business administration reviling private industry, capitalizing on crisis to expand and redirect investment within and between sectors of the economy -- setting quotas, prices and compensation. Businesses responded by retrenching -- ceasing to invest, innovate and expand. Whole industries contracted, closed down, or moved offshore; much like the U.S. gas and oil drilling industry is doing today. Then, just as now, management became frustrated and discouraged, reluctant to create jobs in an environment of excessive government meddling.
A record $2 trillion now sits on corporate balance sheets waiting to be invested amid reasonably cheap assets prices. What holds back investment is uncertainty and fear stemming from an overbearing and free-spending government. Businessmen and investors would never attempt spending and borrowing their way back to prosperity. The debt-financed Obama stimulus plan is not only failing to create jobs. It also ratchets up systemic risk, inviting a currency crisis and bond market collapse -- from which recovery might be impossible.
Recently the president took credit for a 0.2 percentage points drop in the nation's unemployment rate to 9.5% and the creation of 71,000 private sector jobs, claiming his policies were working. In fact, many of those jobs were in the socialized automotive sector. The supposed decrease in unemployment resulted from 611,000 Americans giving up on finding work, dropping off the official rolls of the unemployed. Official statistics mask the underlying truth of a private sector economy that is failing to create jobs. In fact, when all those who have given up looking for work are accounted for since the recession began, the real unemployment rate may be closer to 18% -- almost double the official numbers.
Boom time in the public sector
While the private sector shed nearly 8 million jobs in the past two-and-a-half years, the federal government increased its payroll by 240,000 jobs. So the private sector that is the primary source of national wealth has been shrinking while supporting a growing public sector that generally produces nothing. That burden is made greater by the fact that government workers have incomes 30% higher and benefits 50% more costly on average than those received by equivalent private-sector workers.
This shift of wealth from the productive private to the unproductive public sector is stickier today than it was in Atlas Shrugged because government is now a union shop, with pay having little to do with performance. Unionized government cannot be downsized easily, and its employees have effectively become the country's most powerful entitlement special interest group. Thus, government-run schools controlled by the teachers unions can fail decade after decade without consequence or substantive reform. The government takeover of the health care industry -- aka "Obamacare" -- was a high priority not because it was good for the majority of Americans, but because the ruling elite want to expand unionization, entitlement and dependency.
Many news media outlets largely ignore the most consequential story of our time: the Obama administration's drive to shift wealth and power from the productive private sector to the non-productive public sector. Rand called this appropriation of wealth by the government nothing less than looting. For her, the primary source of social good is in ingenuity and hard work that produce wealth in the form of invention and technological breakthrough. Crony capitalism and forced redistribution of wealth by faceless government bureaucrats is anything but virtuous.
Coming soon: A course correction
Rand warns us that government policies that engender entitlement and cause business owners to go on strike and withhold their capital are detrimental to the economy. What compounds this problem today is that an out-of-control profligate government that enlarges dependence also sets us up for a greater economic crisis than the last one.
Fortunately, the catalyst for course correction is around the corner. Ironically, President Obama can be thanked for making this midterm election an overdue referendum on liberalism. Average Americans are now more informed and engaged than they have been in generations, and they are highly motivated to vote. The most credible and successful candidates, whether incumbents or new entries, are likely to be those resolutely committed to deficit and debt reduction and getting government out of the way of private sector job creation -- the essence of Ayn Rand.
Scott S. Powell is a director at RemingtonRand Corp. and Alpha Quest LLC and a visiting fellow at Stanford University's Hoover Institution.
