Friday, January 13, 2012

Voodoo Economics

And so it is, once again, we hear the ideas of the free market economists of Freedman and his Chicago Boys explaining it all.  The opposition party to the President of the United States knows what's wrong.  There are, fundamentally, only two things that could ever be wrong in the world.  The wealthy corporations are over regulated and over-taxed.  Or so we hear every second from those vying for the Republican party's nominee.  The idea is that you don't have to regulate a company, because it will do the right thing without the burdensome regulations to force it to do so.  If it does the wrong thing, it will only hurt itself and it will, as such, pay the consequences itself.  Tell that to the families of the 11 crewmen on the Deepwater Horizon oil rig that lost their lives when the explosion that was caused by careless and reckless lack of safety standards allowed by the aggressive deregulation of the oil industry by Bush Administration.  Does anyone think that if only the oil industry had been less regulated and less taxed (the Center For American Progress showed that Exxon Mobil, for example, paid zero in taxes in 2009) that disaster would have been averted?  Of course not.
      But that's what they would have us believe.  That the economic collapse we all not only witnessed but felt, in every way shape and form, was caused by, oh who was it again?  Oh that's right, worker's unions, teacher's, police and firefighter's unions, and pesky regulation of Wallstreet.  Had only we denied workers teachers, police and firemen rights (weren't we brought up to look up to and admire these people?), gave more money to billionaires, and stopped making sure that companies weren't doing potentially destructive things, everything would have been fine.
      This is where these people shine.  They are salesmen.  And they know how to sell a package.  Even if it's full of bullshit.  They come up with populist names like "Right to work" (laws which inhibit workers rights organisations from forming, aka Unions) or "Americans for Prosperity"  (a group of a very small number of very wealthy men who want to protect the tax-breaks they get for destroying American jobs) and Citizens United (who won the right to call corporations people, thus making them exempt from disclosure of campaign financing. ie, the right to bribe public officials with unlimited money anonymously).  The names all sound populous.  Because these salesman that have bridged the divide between Government and Enterprise know that populism is indeed; popular..
      And now there's trouble brewing in the cannibal feeding frenzy that is the Republican nominating process. Romney, the front runner, is being criticized for his business history by fellow Republicans.  That's a no-no, because criticism of his business history is a criticism of a holy shrine of right-wing business.  The ability to do anything that should be considered immoral, unethical, soulless and disgusting, so long as it's in the name of profits.  Who cares how many lives and households you destroyed along the way?  It's just good business.  Romney knows that all to well.  He is as rich as he is, because his company Bain Capital bought up companies, fired everyone, tore it to bits, sold off all the pieces, then ran off with all the cash.  Which is exactly what he would do if elected president.  Fire all public workers, sell of government offices to the highest bidder and pocket the cash.  Who's to say he wouldn't?  That's his modus operandi.
      The problem is this.  If left to their own devices, and not regulated by laws on an individual level (including laws against rape, murder, theft etc) most people would continue as they are now; going about their lives without doing particularly bad things.  Either because they have genuine empathy and a desire to be good and do the right thing, or they are concerned that there will be repercussions from the community.  However, the laws are there to protect the 99% from the 1% of sociopaths and psychopaths who are perfectly happy to do awful things to other people either for their own gain or amusement.  aThe business world of corporations, which would have us believe that they (the corporations) are people, want exemption from laws, promising us they don't have among them bad people, driven by their own self interested, so there's nothing to worry about.  The laws of regulation aren't there because every company is a bad place that will do bad things for money.  But those companies do exist.  Powerful people, driven by their own self interest do (believe it or not) find themselves at the helm of large powerful businesses.  And if their decisions have consequences, you better believe it's others who will pay for those.
      This voodoo concept of the Invisible Hand of the Market enacting justice on business for bad decisions is laughable.  Invisible is right.  If the mine you work for has bad safety standards and there is a cave-in, then everyone can just quit and go down the road and work at the next mine, right?  Who's to say the safety standards are any better there?  And are they even hiring anyway?  What if there isn't even another mine down the road, or any other place else to work at for that matter?  And what about the people that died in the initial collapse in the first place?  We just shrug our shoulders and say "oops"?  No, it's less expensive for the company to risk those things than it is to employ strong and efficient safety standards.  Perhaps an analogy about omelets and eggs comes to the mind of the people at the top.  Presumably they don't expect themselves or their children to be potential mine workers.  The so called Invisible Hand of the Market and never been demonstrated to guide or punish anything.  But who cares about facts, when you have theories that in practice make you rich (even if they fail to do anything else promised).
      Which raises another irritating point, something that you hear time and again.  When a politician or an economist is faced with the reality of function and history and it contradicts their claims, they answer with just repeating their theory, as though it hasn't been tried.  When Jon Stewart confronted Jim DeMint the other night, he answered facts with theory.  DeMint was explaining how all this oppressive regulation and taxation was hurting companies and hurting the economy.  Stewart pointed out that in the last 40 years, during all this so called "oppressive regulation and taxation," corporations have been constantly rolling out record profits.  It's also of note that they did better as companies and so did the market itself when they were paying more taxes and having to deal with tighter regulation.  They had their worst years under Bush when they got their low taxes and no regulation like they wanted.  That's just the facts and history.  And what do you do when you make a claim that is then completely dis-proven with facts and information?  Well, you answer by talking about the theory that supports your claim.  No one ever talks about free market economics using the historical record.  They always talk about it in theory.  If Chili and Argentina had been free market success stories, they would be held up as models.  Both were, of course, disasters.  And the most recent example, during the Bush years their economic model caused the global financial collapse.
      And here it is, just a few years later, and the same people that show their face during a disaster with the same magical remedy are back again.  Hey, deregulate and cut taxes.  It will fix everything.

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