If I may be so bold as to make political recommendations, please, please, PLEASE contact your Senators and Congressmen and ask them to vote against bailing out the Big Three car manufacturers. Under the current proposal, Congress would give these companies a total of $25 billion, no strings attached, to keep them afloat. Supporters claim that car sales for Ford, Chrystler, and GM are down because of the financial meltdown, and that these corporations are so integral to the US economy that bailing them out in this fashion is the only option. Wrong, and wrong.
First: the Big Three have been in trouble for a lot longer than the past year, and it ain't due to banking problems. American auto makers have been losing money for years because foreign cars are coming in with better gas mileage, more efficient engines, and competitive price tags. Essentially, the foreign auto makers are meeting the market's demands better than our domestic producers, who whine and drag their feet and claim that they can't do better than they are now. Funny, not only are your competitors from Japan doing it, you also did it for a while during the 70s when there was an oil crisis (it's true; BackHome Magazine recently demonstrated that cars from the late 70s/early 80s were actually more efficient than they are today...). So, the Big Three have gotten where they are largely because they've been ignoring the wants and needs of their targeted domestic markets. Which is, uh, lousy capitalism. The whole point is supposed to be that you sell what people are looking to buy, isn't it? So why should our money go to bail out companies too dumb to pay attention to marketing trends, too stupid to see where the money is and jump on the wagon? How is that at all in our nation's best interest?
Second, I've heard some supporters of the bill claim that attaching strings and requirments to the government loans--say, requiring the corporations to cap executive escape packages, or *gasp* increase fuel efficiency in their products--would only serve to put unfair strain on the companies, forcing them to go under; some even suggest that the companies will choose insolvency over loans with strings. This is total crap. What large American corporation wants to go under? These are profit-driven companies; given the choice between a) floundering, collapsing, and ceasing to make money, or b) altering their products to meet the needs of the domestic market and thereby not only receiving government cash but also having future profits pretty well ensured, which are they gonna choose? Hmm...death or profit?
The fact is, if we just hand them the money, they aren't going to start selling more cars than they're selling now. In six months they'll be back asking for more money, and still not offering their customers anything that most of those customers need or want. A lot of commentators are apt to see this as us being in a tight spot, needing desperately to save these comapnies before we all get sucked down the crapper. But really, it's the other way around. They're on the barrel, not us. It's time for the American people and their Congressional representatives to grow a pair, and start making these dumbasses pay for their own mistakes, or at least earn our handouts. It's not a free ride; if they can't provide us with things we want or need, fuck em. Please, please, get in touch with your home state reps and ask them to vote this bailout down in its current form. Ask them to support better conditions for the release of this money.
I have personally called and/or emailed all three of my home state's representatives, plus send an email message to one Senator Barack Obama of Illinois, asking him to use his current influence as Pres-Elect to convince his fellow Democrats not to support the bill (which, according to the Burlington Free Press, they've actually been the ones pushing the bailout in the first place.)
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YES. I've been reading Ron Paul's Revolution, and it made me realize that the reason that measures against the welfare state seem coldly pro-business is because our business in this country is also socialized -- which leaves us with this disgusting perversion of both socialism and capitalism.
I totally agree that the US automotive companies have dug their own graves. I think GM has a hybrid set to come out in, oh, 2010 or so? Too late, dudes. That's how capitalism is supposed to work -- companies that are innovative and satisfy their customers are more successful, and companies that sit on their hands and produce gas-guzzlers even when gas goes up to more than $4 a gallon lose business and ultimately go under.
A couple days after the bailout plan was announced in October, Slate had an article like "Looks like Libertarianism doesn't work!" And I was like... since when have we had an economic model that bore a remote resemblance to libertarian economics?
Also? Since when is it the job of the government to rescue businesses? I don't remember where I read it, but when Fannie Mae and Freddie Mac et al. were bailed out, someone was saying "Can the US government actually, legally do this? Who knows, but who's going to challenge it?" That should not be how government operates in this country. We have a governing document: Congressmembers, please to be reading the Constitution?
I'll contact my representatives as well, but we're basically screwed since 1) It seems like at least the majority of Democrats in the extremely Democrat-heavy Congress support the automotive bailout, 2) Obama has expressed his support for it as well (so has Bush, but when was the last time he was a real conservative?), and 3) Obama has never been known to stand up to his party anyway.
I kind of wish I'd bitten the bullet and voted Republican for Congress in CO, but 1) It wouldn't have done anything anyway, and 2) I really couldn't bring myself to vote for Marilyn Musgrave (seems to think that gay marriage is the biggest problem in the country today... which is flabbergasting no matter what your opinion on it) or Bob Schaffer (who wants us to remain economically beholden to China). (Couldn't vote for Markey or Udall, either, but whatever).
*I mean I wish I'd voted Republican for Congressmembers just to try to break consensus. I'm thoroughly disgusted with both parties, and I think an overwhelming majority in Congress and the presidency is bad for either party.
Well, earlier Republicans, with their laissez-faire polciies, were sort of libertarian...according to stuff I've been reading of late, the bailout concept actually originated with Reagan. He bailed out the Savings & Loan institutions that were going under...but yeah, seriously. I don't know anyone who hasn't said a) this is how capitalism is supposed to work, and b) they wouldn't do this for smaller businesses or citizens--just the guys with them in their pocket. And it's not even just hybrids, either--Japanese makes are smaller, cheaper, and more fuel efficient without being hybrids. If they can do it, we should be doing it as well. Business socialized in what sense? I've also said for a while now that as far as I'm concerned, if gov't is going to interfere in business, then they should be doing it in such a way that corporations aren't able to be 20% of the total economy, as Bush claimed Fannie and Freddie were when he spoke in support of a bailout for them...as far as I'm concerned, that should be part of the definition of monopoly and ought to be illegal...
Also, I personally have no issue with a bailout IF THERE ARE HEAVY STRING ATTACHED. Hold the money over their freakin heads and say "you can have it if you're good boys." Mqake the bastards squirm. Mwahahaha. Seriously, though, if they'll make them built better cars and sell em cheaper (as, from the link you sent, Obama's arguing) than maybe it's OK to me. But a no-strings-attached-loan is BS.
You're assuming that Reagan was an actual conservative (which is, to say the least, highly debatable).
I don't think they'll use the bailout money to build better/cheaper/more fuel-efficient cars. AIG et al. are trying to come back for seconds, having made no changes in their practices the first time around. If the government is just going to save your business anyway, then why do anything different?
Socialized business in terms of regulations that favor certain businesses (usually larger ones) over others. Another example is the severance tax credit in CO (and other states) -- which was actually upheld when the proposed Amendment 58 was shot down -- which essentially subsidizes oil and gas companies. We do not have free market capitalism; I'm not sure if we ever really have.
I agree on principle that if you're taking government money, then the government has some right to tell you what to do with it. But that's why I'm uncomfortable with basically every form of governmental socialism: we should tell the government what to do, not the other way around. Representative governing body what?
Related: http://meganmcardle.theatlantic.com/archives/2008/11/right_to_work.php
Well, here's the interesting thing I've come across in my recent reading (David Harvey's Condition of Postmodernity): in the 1970s, there was massive deregulation in industry. This led to repeated financial crises, and ultimately by the time Reagan took office, forced otherwise laissez faire Republicans to favor some measure of government involvement with industry--that is, bailouts. Not increassed regulation, though. The same thing gets called socialism and communism and all sorts of crap when it's done by Democrats and liberals, but in the past even the more conservative Republicans have supported measures like this when their own party starts the idea...I do see your point about subsidizing bigger companies though. But again, that's the rationalization for bailouts since the 80s--if the companies weren't so large, their failures wouldn't jeopardize the whole economy. Which I generally see as crap, myself. I sincerely believe that most of them would take some bitter pills when their balls were against the wall if it meant they could stay in business. Frankly, I think the ideal is for both to happen--the government should represent the people, but because "the people" and "the corporations" are often on opposite sides, the government should then be able to support the people's interests through constricting businesses' powers as severely as necessary. One thing that's been proven over and over again is that whenever we've been closest to free market capitalism, it always turns into soulless money-hungry assholes fucknig over the rest of us. Shipping jobs overseas so they can make more money. Importing products that will make our kids sick just cuz it's cheaper than good products. Lay-offs for those at the bottom, raises and golden parachutes fore those at the top. Kate M actually sent me an interesting article today that points to several reasons to view the inner workings of the banking bailout as, in fact, the privatization of the gov't--the Treasury is giving one of the most corrupt banks in America the right to decide who gets what money from the bailout, including itself. The government is outsourcing one of its responsibilities to WAll Street. Incidentally, Paulsen also says that the deficit is now so large that very soon they may have to just shut down Social Security and Medicaid, because the government just won't be able to afford to have any of those programs in the face of the more pressing need to bail out giant corporations. But I agree with some analysts, that currently we actually are closest to unregulated business than we've been in a very, very long time. Corruption is at the max. I'm beginning to think that scrapping the whole business is really the only way to fix any of it. Boo unfettered capitalism. Boo government subsized capitalism. Just Boo capitalism in general (obviously, I'm getting tired).
To say that the economy sucked in the '70s because of business deregulation is a post hoc, propter hoc fallacy. Just because something happened first doesn't necessarily mean it caused the things that happened after it. Not exactly arguing with you, just the way in which you draw your conclusion -- I haven't read enough about the '70s, but I think a lot of things probably made the economy suck.
Socialism is government control. That's my working definition, anyway. I think our government becomes more socialist whenever it oversteps the bounds of our (very specific) governing document.
Frankly, I think the ideal is for both to happen--the government should represent the people, but because "the people" and "the corporations" are often on opposite sides, the government should then be able to support the people's interests through constricting businesses' powers as severely as necessary.
Everyone is going to lobby the government to further their interests to the extent that they have the power to do so. I think "the people" are usually against "the corporations" largely (although not always) because of a populist "fight the man" kind of attitude. It's easy to say the rich should be taxed a ridiculous amount until you find yourself with hard-earned money of your own you actually hope to keep some of. It's easy to say that big business should be reined in until you realize that those controls all apply to the small start-up you or your friend or relative is struggling to get off the ground.
In general, I'm in favor of law instead of regulation. If someone embezzles, or defrauds customers, or whatever, they need to be held legally accountable. It's theft.
One thing that's been proven over and over again is that whenever we've been closest to free market capitalism, it always turns into soulless money-hungry assholes fucknig over the rest of us.
Not to be antagonistic, but I don't think that's something you can say without supporting it. That's history regardless of what party or ideology is in power, really. The powerful take advantage of the powerless -- and I think it would be better if the government, rather than weakly pretending to "reform" things, allowed people to fight for themselves. The government won't fight for people -- they'll just participate as one more powerful entity against the powerless.
Shipping jobs overseas so they can make more money.
Unions, unchecked (or when extremely powerful) have fueled this by driving up the cost of production until it's no longer profitable. I'm not anti-union, I just think that when they run amok they're no better than the worst business execs at AIG.
Importing products that will make our kids sick just cuz it's cheaper than good products.
Again, this needs to be confronted with actual law -- and I don't mean the good-for-nothing FDA.
You talk about lay-offs in the context of a laissez-faire economy. Are you proposing that businesses not be allowed to choose who they fire and when? (Or to make it a lot more difficult?) They tried this in Italy, and workers who couldn't get fired were being mistreated in the hopes that they would opt to quit. Also, fewer people will be hired if businesses know their choices must be so rigid -- and people who probably most need those jobs, who would be a bit of a 'risk' to take on, will not get hired.
the Treasury is giving one of the most corrupt banks in America the right to decide who gets what money from the bailout, including itself.
The problem is the bailout itself -- this is secondary. And this isn't privatization; it's subsidized by the government. I don't see how that's capitalist/libertarian/conservative in any real sense of the word. It's just shoddy socialism.
The government is outsourcing one of its responsibilities to WAll Street.
I don't think anything that's gone on with the bailout is the government's responsibility -- Congress has enumerated powers, and throwing $700 billion at tanking businesses isn't one of them.
Paulsen also says that the deficit is now so large that very soon they may have to just shut down Social Security and Medicaid, because the government just won't be able to afford to have any of those programs in the face of the more pressing need to bail out giant corporations.
I'm pretty sure this was the case long before the bailout was even an idea. Social Security and Medicaid have been in danger for at least both of our lifetimes, and the bailout isn't the only thing weighing more heavily on them. What about our military, that we have stationed in 130 countries around the world? What about foreign aid (that many agree cripples the economies of the countries receiving it)?
But I agree with some analysts, that currently we actually are closest to unregulated business than we've been in a very, very long time.
Perhaps relatively speaking, but I don't think you could call it "unregulated" in any way. Again, I'm not in favor of regulation -- I'm in favor of law. What's the prosecuting body for broken regulations? Another example of coddled industry is the American sugar lobby (which is bigger if it includes, as I think it does, sugar beets in addition to cane sugar) which secures a bigger slice of the market by lobbying for big taxes on imported sugar.
I'm beginning to think that scrapping the whole business is really the only way to fix any of it. Boo unfettered capitalism. Boo government subsized capitalism. Just Boo capitalism in general (obviously, I'm getting tired).
In terms of government regulation versus independent industry: look at the organic movement. The government resisted (and actively fought) any organic standard for ages. Now it's taken off like wildfire and is actually able to retain its integrity (i.e., no pesticides at all, no GMOs) largely because the standards are regulated by small independent organizations (Oregon Tilth, Quality Assurance International) rather than some bloated government agency like the FDA. It's taken off not because of government monetary encouragement (much to the contrary)-- it's taken off because people choose to buy organic. That's how capitalism should work. That's not usually how it does, but it's how it should.
Ah. If I made it sound as though Harvey demonstrates the economy tanking because of deregulation, than I apologize. Here, according to his analysis, is what happened in a nutshell (and I may leave out bits due to not remembering all of it or also for the sake of space).
In the 1950s & 1960s, the US was a world superpower, and pretty close to hegemonic when it came to capitalist industry and production. However, many of the newly independent and industrializing nations throughout Asia and Africa (and the rest of the Americas) were starting to become producers in their own right. This a) cut into US markets because countries were now producing their own goods or buying them from closer nations at lower prices, b) led to a decrease in profits and a glut of products manufactured for export that were no lnoger needed. This, of course, cut into profit margins and resulted in money lost for industry. They started looking for ways to decrease costs. In part, this led to the first moves toward outsourcing jobs to foreign countries where, largely because these countries were newly industrialized, regulations and laws favoring workers and organized labor were virtually nonexistent. Workers could be paid less, and working conditions didn't need to be so high. This of course also led to higher unemployment in the States, further compounding the problem caused by the rising prices being charged for goods based on the need to keep profits up. To combat this, the US government tried a number of strategies: first, it detached the US dollar from the gold standard, thus allowing it more flexibility because it was not rooted to the value of any tangible substance. This however (in ways I'm not 100% sure I get) led to further inflation. Second, in an effort to convince industry that it would be just as well, if not better, off here in the US, measures were taken toward deregulation of the business world. Corporations used a lot of their newfound freedoms, not to justify staying here, but as a means to further bolster their efforts to ship to cheaper pastures and to charge higher prices, because the government was too afraid to do anything to piss them off. It was feared by many that we'd actually lose our capital power if regulations were left in effect.
However, strictly speaking, there is an even simpler explanation for why the American economy tanked in the 70s: as Harvey points out, such crises are deeply inherent in the structure of capitalism itself. Capitalism as a system functions on the basis of continuous growth and continuously available markets. Increase is always necessary. Each year a corporation must sell its products to those who haven't yet bought them; they must continuously try to innovate, to produce more with greater speed, and to sell more. My favorite exmaple here is the old adage about selling China's 1 billion citizens each a pair of Nikes. The problem is that, once every Chinese person owns a pair of Nikes, China will no longer be buying Nikes. At least until the first batch wears out. In essence, this means that that market is closed, and any increases planned for future sales, based on current success, will be too many sneakers if you try to sell em where you've already sold em. You need a new market, and you need to be able to get the product there cheaply. So, if your market is primarily domestic (as it was largely up until the Depression), then your ability to keep generating more customers and keep selling your product is hampered by national population. Once you can't sell more within the country, you have a lot of backstock and nothing to do with it--what Harvey calls "over-accumulation." Essentially, you've shelled out $$$ to make them and no one's buying them. You're losing money. It spills into other industries; you lay off workers because you can't pay them to make what you can't sell; the economy dives a bit. Over time, you manage through transportation innovations to reach overseas markets. All is well, until, again, no one in China is buying Nikes. Then you've got to move on to further markets, which are likely to be more expensive until technology advances yet again. You continue to risk overaccumulation, in particular in areas where other nations are selling similar or identical products. The more competitor nations you've got, the more danger there is that you're going to hit a selling slump. Ultimately, Harvey argues, even in the hypothetical case that all the world is capitalist and everybody buys from the same corporation, there would STILL be a point at which, because everyone on Earth has your product, you overaccumulate. There is no way to avoid economic crises due to over-accumulation in the capitalist system.
Sorry about the long economics lesson, just correcting my earlier skim-over...
I always feel compelled, when people bring out the argument that the government is overstepping its bounds when it strays from the dictates of the Constitution, to p[oint out two things: the first is that the Constitutiton of the United States was very much designed from the perspective of its time frame: the right to bear arms, for instance, being only technically granted so long as there is need to maintain a well-organized militia in the villages. Second, that THE CONSTITUTINO WAS NEVER INTENDED AS MORE THAN A ROUGH TEMPORARY DOCUMENT THAT WOULD BE SCRAPPED AND REPLACED SOON. From written reports, journals, etc, of the time, historians have uncovered the fact that almost nobody at the Constitutional Convention was at all pleased by the document they came up with. Most, in fact, only signed the thing once it was agreed that, after tempers were settled and some new heads set to work on the issue, it would be replaced by something considered "better" by the delegates. They weren't happy with it at all, but felt the need to get something set down on paper. It was not ever intended to be the revered be-all-end-all of US government that some see it as today (which is why, depending on their party affiliations, many who advocate a "strict" interpretation of the Constitution seem to disagree rather violently with each other as to what a strict intepretation of it actually reveals...).
I suppose you're right about the definition of socialism. Though I don't see how, in and of itself, that's a negative thing. There are certainly examples of it being so, but I've never understood how, for so many people, socialism is somehow self-evidently synonymous with evil.
You know, for a long time, I figured as much about people having money being less willing to have people with money taxed higher, but the longer I'm around, the more examples I see of that not being necessarily the case. In fact it sometimes would seem to be a downright cynical view of things. I read in a magazine of some kind the other day that something like 52-54% of Americans making more than $200,000 a year--those standing to have their taxes increased significantly once the next President taes office, in other words--actually voted for Obama. It's a little hard to argue that those with money want to keep it and those without are trying to snag it when a majority of people with it seem happy to give it away...
Also, I think to say that "It's easy to say that big business should be reined in until you realize that those controls all apply to the small start-up you or your friend or relative is struggling to get off the ground" is to speak in such sweeping generalities as to sort of obscure the point I was making. What this says in effect is that "if you regulate business, all businesses will be regulated." Well, yes. But how much regulations affect large corporations or small businesses as categories depends entirely on what regulations you put in place, doesn't it? As I've said, both here and in other places (too numerous for me to pinpoint all of them), the primary regulations that I see the greatest need for, unless we're getting into totally revamping the system (something i'd really, really like to see before I die), are measures that I would say either predominately restrict large businesses, or which frankly ought to be sort of base-lines for ethical business practice: restrictions, first of all, on how large a corporation can be (supposedly we have this, but if Fannie Mae and Freddie Mac really were 20-25% of our national economy, as Bush claimed in his Presidential address supporting the bank bailout, then as far as I'm concerned, something isn't working right. If a single business is so big that its failure would destroy the entire economy, something is very wrong, and ought to be prevented from coming up in future). Tougher environmental standards, especially for the auto industry. THe big problem with the auto manufacturers' emissions standards, from what I'm aware, s that for the past few decades they have been allowed to pretty much regulate themselves. Also, how is staffing the EPA with oil magnates and their buddies not, in point of fact, allowing THOSE companies to regulate themselves? So, I suppose "working conflict-of-interest laws" would be another of my personal preferences for business controls. Banks shouldn't decide how to spend these bailout checks for themselves; oil companies shouldn't be in charge of national fossil fuel regulations, and private insurance companies have no business running the governement's health care. People who are in the business to make money for an industry ought not to be assumed to have anyone else's interest, or any interest aside from their own profits, at heart, until there's some hint that there ARE other interests in their corporate hearts. I suppose one might ask, aren't you presuming them guilty and making them prove their innocence? But I think they've had ample opportunities not to prove thermselves guilty, and failed miserably.
The curious thing I've found in my reading on the subnject of unions is that it's been a very long time since they've been able to "run amok" or really play any non-pre-scripted role. In the era of High Modernism (roughly 45-72), according to Harvey, a great deal of evidence actually supports the fact that unions were given a place at the economic table as part of an uneasy triumvirate with capital and government, but only by agreeing to be partners rather than antagonists. During those two decades, things went pretty much that way: there were things that had to be ok'd by labor before governement or business could really start doing it; there were things labor simply couldn't do if it wanted to keep playing the game. During the 70s, however, a number of shifts in production methods and corporate structure and practice, which I won't go into right now, were put in place which, oh so surprisingly, undermined the unions' abilities to work as an effective third leg in the tripod. And, in fact, a number of the moves i've noted earlier in this comment were utilized exactly to do so. It was cheaper to go elsewhere where there were no industrial unions, not because union was being stubborn and impeding things (though I reckon that might have been a piece of it), but essentially because corproations wanted to circumvent the requirments of treating employees like people.
On the subject of layoffs etc: obviously, I don't think businesses should be unable to fire people without governement oversight. In fact, in looknig back over my comments, i'm not even sure where that part of your response is coming from. Can you point to it for me?
The thing i'm beginning to note about all these bailouts the more I think about it is, I'm really not sure which way to view it. On the one hand, yes, it's gov't subsidizing businesses, which would make it socialism. On the other hand though, and this I mentioned above in an offhand remark, what we're seeing is actually the opposite of socialism. Banks and auto companies, with powerful lobbyists, are telling the government, "We need money, we need it now, and we need it with no strings attached," and the governement says "America, we need to give them money, we need to give it to them now, and we need to give it without attaching strings." That to me is business running government, not the other way around. And again, not to belabor the point, but: the FDA is run by drug company execs and insiders. The EPA is run by former oil executives and their buddies. And now the banking bailout is being put under the control of a bank with a long history of international money laundering. Um, how is that secondary, or even separate, from the fact that there's a bailout at all, or that these corporations knew this was coming and yet knowingly ran toward it (such as the Big 3's admission a few months ago that they knew the SUV craze was dying but thought it best to ride it to its death rather than switch gears)? And why on earth should they be allowed to regulate themselves, when after they agreed to use the bank bailout money for what it was legally given for, rather than executive bonuses and the like, many of the nation's failing banks turned around and gave all top-level employees million-dollar bonuses? I'm sort of curious how exactly the citizens would be able to defend themselves against that sort of illegal abuse of taxpayer money. Attacking bankers? (yes, being facetious. trying to inject a little humor. but really, how?)
I think what bothers me about Paulsen's statement is, obviously I'm aware that the system is in trouble, has been failing for a while, but he makes it sound as though things will just shut down. Say, next Tuesday at ten o'clock or something. I mean, not that it will founder, but that to save banks we'll have to just shut the programs down. And then what happens to people like my grandmother, on fixed income from SS and Medicare? She's fucked. I'd also be curious to hear the rationale for the claim that foreign aid destroys receiving countries' economies. Is it because, since we're providing healthcare assistance, for instance, they don't have corrupt and profit-driven insurance companies like we have (and like some total idiots want to see be the only healthcare system in America, rather than one that isn't driven by "take the money and run")? My my. Those poor people. How tragic that they have no such opportunities to be screwed by corporations and left to die...again, black humor. Sorry.
On the subject of organics--a topic I've also discussed with friends of late--the big problem with what capitalism has done "for" the organic movement is that corproations have seized it as another fine way to make dough, and so they grow organic produce in Mexico or California or whatever and then ship it by truck or air twice the distance that "conventional" (I hate that word; it makes organics sound weird, fringe, non-default--like having "black history month") procudee is shipped. At which point, what have you managed to do beyond feeling good about the idea of buying organic produce?
Incidentally, an online text of the Constitution which I've just now found states that Congress has the right "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes". Which means, as far as is relevant today, that Congress regulates business conducted internationally or across state lines. Since no large corporations in this country fall outside those two categories, a strict reading of the Constitution allows them to regulate those businesses as they see fit. Now, whether bailouts fall under the category of "regulation," I'm not sure. I suppose that one could argue that, particularly when (like with the proposed Big 3 bailout last week), that the corporation's collapse would destroy the national economy, it would be regulating business (keeping it alive, in fact) to do so. But I'm not sure that's my position...
You did make it sound that way:
in the 1970s, there was massive deregulation in industry. This led to repeated financial crises...
I'm not sure if I'm not following your summary so well or what, but the timeline seems off -- I think the connection to the gold standard was partially severed in 1933, and then completely thrown out in the '70s.
Another reason? OPEC. If an oil cartel isn't antithetical to the free market, I don't know what is.
This is also, of course, all talking about industries that sell physical, relatively long-lasting items.
There is no way to avoid economic crises due to over-accumulation in the capitalist system.
Again, if you're only selling wedding rings, sure. The logical thing then is to expand to other jewelry or metallurgy. But not all products are physical or can suffer from overaccumulation -- if all the world owns a Mac, there is not going to be an end to people who are still going to buy iPods, Mac software, iPhones, and the like. Your model is too simplified. What about food products? What about shoes? Does each person (in the US) only own one pair of shoes?
If we're not to be governed by the Constitution, then what are we to be governed by? The Constitution is a pretty damned good framework, all things considered, not the least because it allows for its own amendation.
I'd like to see some evidence of the temporality of the Constitution. Jefferson spoke of binding down tyrants by the chains of the Constitution... that doesn't bespeak a transitory document to me.
Socialism is a negative thing when it inhibits liberty.
Taxes are not the only reason, I think, that people voted for Obama. I'm sure we can come up with a percentage of young men who voted for Bush's second term: did they want to be sent to Iraq?
I'm not saying those with money want to keep it and those without it are trying to snag it, I'm saying that that has been government's sorry answer to poverty. I'm saying that it's not always right for the government to take people's money.
Many regulations apply to businesses regardless of size; see George McGovern's attempt to run a small inn in CT after his failed presidential bid.
Emissions and other environmental damage, I think, are another matter for law -- it's illegal to deface or destroy someone else's property, and it should also be illegal to poison rivers and destroy forests on someone else's land.
The EPA, much like the FDA, is a joke. The government is wildly ineffectual in protecting the common good in this sense, but the fact that it keeps saying it does so allows more people to feel like something is being done so they don't have to.
Banks shouldn't decide how to spend these bailout checks for themselves; oil companies shouldn't be in charge of national fossil fuel regulations, and private insurance companies have no business running the governement's health care.
Agreed. But, again, this is not a free market. It's economic tyranny. Just because big business is doing it doesn't mean it's capitalism.
I think the auto unions bear a huge responsibility for bankrupting the industry. Also, the teacher's union is so powerful in this country that it's blasphemy to speak of, I don't know, firing bad teachers (rather than sending them to the rubber room) or trying out merit pay.
I said that about layoffs because you were speaking about layoffs in terms of deregulation. In what way, was my point, do you want layoffs to be more regulated (if deregulation leads to more of it, as you were saying)?
What is business going to do if government doesn't okay the bailout though? The government ultimately has the power to okay these ridiculous bailouts -- just because they're caving to the demands of big business doesn't mean they have to. Socialism cuts both ways -- it's not always government intervening on behalf of the little guy; sometimes it's government intervening on behalf of the bloated and poorly run bank.
As to who runs the FDA and EPA: don't you think regulatory agencies in communist China function the same way? Don't you think they functioned the same way in Soviet Russia? They're former oil and drug execs who are now being paid by the government. Again, just because big business does it doesn't make it capitalist -- it doesn't even make it not socialist.
The oversight of the bailout is secondary to the bailout itself because 1) the bailout was bad enough, 2) it wouldn't be an issue if the bailout didn't happen. Also, who would be better to direct those funds (not that the failed banks are a good choice)? It's a train wreck -- the question of who decides what gets spent where isn't going to change that.
I never said they should be allowed to regulate themselves; I said there should be laws passed and actually enforced to prosecute criminal activity. Business execs should be held criminally accountable for unlawful acts, not protected from the consequences of their bad business decisions. We need law, not regulation.
Laws come from Congress, from our representatives, rather than being passed out top-down from some agency that is, as you've pointed out, likely to be run by the worst possible people for the job.
As regards foreign aid: aside from the poisonous dictatorships it has often helped keep in power, there's no incentive for the country's own businesses to be innovative. From Paul's "Revolution":
No wonder Kenyan economist James Shikwati, when asked about development aid programs to Africa, has been telling the West, "For God's sake, please just stop."
I think growing organic produce in Mexico and shipping it out (and most organic produce indicates its country of origin) is a small price to pay for getting the whole f'ing movement off the ground in the first place. And I'd much rather have organic cantaloupes grown in Mexico that enrich the soil and don't contribute to poisoning the workers or rivers than spray more pesticides that will do just that on conventional crops that would just be imported anyway. If people want to buy local, they can often choose to do so.
To regulate commerce, not business. This means exchanges between businesses, not the internal mechanisms of the businesses themselves.
That leap is the same as saying that since the government can outlaw certain interactions between individuals, it can also regulate individuals themselves -- a frankly terrifying idea.
Just because something might be "good" to do doesn't mean it's the government's place to do it. James Madison: "If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one, subject to particular exceptions."
We should fear tyranny more than we fear poverty.
Hopalong,
First, I wanted to say how much fun this has been. I don't get to do this much anymore. Second, one thing that struck me in this most recent post of yours is that I agree with a lot of what you say in it. You're right, socialism can be bad. And you're right, just cuz it's bad doesn't mean it's capitalist (although being a dirty commie I often seem to put things that way ;-P).
On the subject of laws, as you describe your position here, I do indeed agree. When it's leaked that the president is gonig to have definitions altered by the Justice Department or the FDA or the EPA, so that laws regarding various issues and controls can be circumvented, I get very nervous. Generally, I do think laws are better than regulation, too.
On the subject of overaccumulation, yes, people will buy iPods, software, etc. But how many iPods does each person need, barring the fact that after six months they put out one with some new twist. Which, incidentally, is one of industry's attemtps to deal with accumulation--planned obsolescence. Still, it only works so far. Sure, everybody has more than one pair of shoes, but how many people own multiple pairs that are the same brand, model (or whatever you call the specific shoe), and color? That's where my argument comes in. Very few people would do that, and so the company ends up with a lot of extra shoes of a particular type. Or, rather, of every type it makes. But really, after a fashion, this applies to most products. Food is a little trickier to see in those terms, I'll grant, but it also happens--after all, during the Depression, companies were subsizied for piling large quantities of oranges etc in creosote dumps and burning them, to prevent there being more on the market than could be bought. And to some measure, they still do that kind of thing. Meanwhile, they're starving in Africa. And while it's certainly important for these countries to be figuring out how to take steps to solve their own problems, at the same time I think more should be done in conjunction with that to send our excessive food overseas if it's not going to be even sold here...
It's interesting; I'm not sure I would necessarily agree that it's socialism if big business does it. I think that's sort of the opposite of socialism as it's commonly defined, actually. Though in the cases we've been talknig about, the two (government and business) are hard to really separate into distinct entities. At which point, maybe you are right, because if business IS the govenrment, then actions by business would be socialism. And of course, I'm aware that that's how it works in countries pretending to be communisat, as well--I certainty wouldn't argue against that. "Socialism is a negative thing when it inhibits liberty." Very true. Which is why I'm definitely not a socialist in the wholehearted sense.
"Taxes are not the only reason, I think, that people voted for Obama" Well, obviously. I'd be pretty dumb if I argued that, wouldn't I?
I definitely don't agree on why the auto makers are where they are financially. They got here because they couldn't sell cars. They couldn't sell cars, not because the unions were being meanies (;-P) but because people weren't buying the shit they put on the market any more.
And you're right, it doesn't make it always the gov't's place to do it. Though when industry and corporaqte power step in, usually it turns into advertising more than positive social/humanitarian initiatives...
So, on some things I think we actually agree. Nice to discover. Been enjoying this immensely.
Cheers,
Snyrt
Silver,
How do you define tyranny? Is it government protecting citizens from business? Business running amok and exerting massive control over the government? Or is it something else?
Depending on your definition, I may or may not agree with your statement...
This has been fun -- probably the most dramatic economics has ever been for me.
Food was burned to drive up prices, not because there weren't people who wanted to eat that food. I just don't think (even with consumer products) that overaccumulation is inevitable, or the Death of Capitalism -- especially when you take advancing technology, shifting trends (different fashions, or the new "ethical/green" trend) and changing markets (China and India becoming significantly wealthier, for instance) into consideration.
People are starving in Africa largely because of a problem with distribution of goods and food -- a problem that I think is only exacerbated by government attempts at aid. The US government gives foreign aid to a foreign government; it doesn't buy rice and air-drop it. And often the most dire situations (see the cyclone in Burma) are the ones that are helped the least by this method, because their governments are intensely corrupt.
What I would want instead of foreign aid is non-profits or private entities -- Kiva, for example, a microlending organization that helps people start their own businesses who could otherwise never hope to get (or afford the interest on) a loan. Or the International Justice Mission, which provides job training to women working in prostitution so that they can support their families without having to return to the sex trade.
I just don't feel like government-organized foreign aid has ever been that helpful. And yes, there are ridiculous private organizations as well; Silver encountered an American woman in Rwanda who worked for an organization that sought to teach kids team sports like soccer... to help the lack of "sportsmanship" that, er, led to the genocide? And this in a country where soccer is perhaps more ubiquitous than Catholicism. But the major difference is that a private organization is not as immutable as a government organization.
I wasn't saying that it is socialism if big business does it, either. It can be, when government caves to their demands.
The two causes (UAW and the companies' poor choices) don't have to be mutually exclusive, and I wasn't arguing that they were. They couldn't sell cars, and they caved to unreasonable demands (which is bad business anyway).
When industry and corporate power step in to do what? I'm not sure I follow you...
Ah. Many of the instances I know of where corporations (as opposed, say to NGOs) have taken part in foreign aid or charitable work, it's generally in-name-only and more as a publicity stunt than anything else...that's all I was saying. As for capitalism being inevitably doomed, I don't necessarily think so either. But overaccumulation has been a cyclical issue every 10-20 years since this country became industrialized, and seems to occur regardless of government or corporate strategies intended to deal with the problem...Shrug.
I agree with you on the in-name-only charities that commercial enterprises often take part in -- Walmart donating something or other, or something like that. I was thinking more organizations whose main focus is humanitarianism, not ones where it's something they tack onto their merchandise as a selling point.
Although lots of nonprofits can be just as ineffectual and in-name-only as well -- there was some website that kept an index of all these charities and rated how effective they were (in terms of how much of received donations went to the actual cause, rather than paying their workers or advertising). If I come across it again, I'll send it to you. I think Amnesty International was actually one that didn't rate very highly in that respect :(
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