The Olympic gods are still smiling down on America.
Although they didn’t quite win the gold medal in hockey, the United States managed to rack up the most medals (37) in the highly competitive Olympics games this year. They surpassed their chief rival, Germany, which has won the medals count in the past two winter Olympics, and Canada. In fact, the United States now has won more Olympic medals ever in the history of the winter Olympics.
And this despite a devastating financial crisis, the Great Recession, 10% unemployment, a costly war abroad, and the machinations of the Obama administration.
One of the reasons the United States has been so successful in both the summer and winter Olympics is because our nation is a melting pot. American athletes are a plethora of nationalities, with ancestors coming from Europe, Africa and Asia. Sometimes the only way you could tell if a skater or snowboarder was American was by looking at his outfit emblazoned with the letters “USA.” (It should also be pointed out that most foreign Olympians train in the US because of our superior facilities.)
But there’s another important reason that President Obama and the Democrats should not lose sight of: The Olympics was a victory for private enterprise!
The fact is that the American athletes achieved their remarkable success without any significant public funding or Congressional regulation. As the New York Times lamented on Sunday: “The United States is one of the few nations that do not publicly finance its Olympic athletes. That state of affairs has given rise to a fluid, entrepreneurial system that is alternatively blamed for athletes’ shortcomings and praised as their greatest advantage.”
Corporate sponsorships (McDonalds, Visa, Coca-Cola, Procter & Gamble) provide the bulk of the money for training, travel and stipends. Major corporate sponsorship for individual athletes and the USA team makes all the difference. Snowborder Shaun White trained privately on a half pipe financed by Red Bull, the maker of energy drinks. He won the gold in his event. Lindsey Vonn, who won a gold and bronze in Alpine skiing, receives intensive independent training, as do all the figure skaters.
Speedskater Chad Hedrick is unflinching about his assessment of corporate sponsors. "Without corporate sponsors like this [referring to Procter & Gamble], our athletes would struggle," Hedrick said. "And in return, it would be very hard to compete against the other nations in the world. So all these corporate sponsors are key for us to go out and perform the way that we do. And we’re very grateful."
Another speed skater Jennifer Rodriguez states, “After an event and the competition, everybody treats themselves to McDonald’s, and I think every athlete pretty much appreciates McDonald’s being there."
As free-market economists would say, incentives work. The better the Olympiads do, the more publicity they get, and the more the sponsors profit.
As President Obama and Congress return from watching their TV sets and getting back to the business at hand of improving the nation’s economy, health care, and environment, they should learn this one lesson from the American victory in Vancouver: the key to success is to invigorate private enterprise, encourage competition, and empower individual choice.
To solve the jobs problem in the United States, we need more spending by private enterprise and less by government. To do this, Congress needs to decrease business taxes and provide greater labor flexibility. The corporate tax rate should be reduced from 35% to at least 20%. It should curtail the minimum wage law, which has caused the unemployment rate to rise to over 50% for black male teenagers.
To improve our health care system, we need to encourage greater personal responsibility by expanding health savings accounts, increasing deductibles on insurance policies, and allowing nationwide competition among insurance companies. Unfortunately, Obama’s health care bill will only increase the cost of health care by squeezing out private competition and imposing heavy government regulations.
On the February 22 cover Business Week, President Obama was quoted to say: "We are pro growth. We are fierce advocates for a thriving, dynamic free market."
Every time President Obama makes a new proposal, let’s remind him of these words.