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Economy

Obama Says U.S. Didn't Reward Greed. But It Did And Does

It's a staple of presidential rhetoric for the nation's chief executive to portray American history in an idealized, shining-city-on-the-hill way. All presidents have probably done it in one form or another.

So this isn't meant to single out President Barack Obama for following his predecessors' lead.

But check out this example of presidential idealism from the president's weekly address this weekend.

This Labor Day, we are reminded that we didn’t become the most prosperous country in the world by rewarding greed and recklessness. We did it by rewarding hard work and responsibility...

Really? Guess we'll need to forget all that stuff we learned in school about the Robber Barons.

The president has made variations of this statement when he has argued for financial reform and bashed Wall Street.

But repetition doesn't make it sound any less ahistorical.

Truth is, great American fortunes like John Pierpont Morgan's and Andrew Carnegie's have been made through what looked a lot like greed and recklessness to many.

And what is anticompetitive behavior of the sort Microsoft was found guilty of ten years ago if not a form of greed? While Microsoft was ultimately confronted by the federal government, it prospered hugely before then.

Financial markets are built on greed, on the legitimate desire investors have to maximize their profits. Indeed, it's hard to imagine the financial markets functioning without greed.

When the Gordon Gekko character in the movie "Wall Street" famously said "Greed is good," he was stating the obvious, at least when it comes to financial markets.

And as far as recklessness goes, one person's recklessness is another person's risk. There are probably any number of investments which at the time looked reckless but turned out to look shrewd in hindsight.

Google, for instance, initially didn't make sense to a lot of people as a business with much of a future. It was a search engine. How was it ever going to make money? more than a few people asked early on. It looked like a reckless investment to some.

The truth is American capitalism rewarded both greed and recklessness as well as hard work and responsibility.

Indeed, if it weren't for that greed, Labor Day might not exist. It was in response to the owners of railroads, mines and factories, who workers felt prospered greatly at their expense, that organized labor was born.

The sources of American prosperity are more complicated than Obama is letting on.

Obama's obviously knows this, especially since he's one of the most subtle politicians to ever reach the White House.

But he also knows a president rarely gets into trouble by serving up to Americans an idealized view of themselves. Which is why presidents keep doing it.

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