The Failure Of The Conservative Economic View
A CONSERVATIVE FAILURE: Disaster Response
The conservative view of the world in the United States argues that a totally free economy will empower participants in that system to create jobs, wealth and success. The argument contends that the wealthiest citizens of such a society will use their money and resources to build industry and create innovations in technology that will give rise to wealth for workers and their families. In theory, the idea sounds like it has some merit. But in practice, the wealthiest of citizens are greedy bastards that manipulate the system so that they can create more wealth and horde it unto their own.
Let us examine this contrary view from the perspective of the US Constitution. The Preamble sets forth some basic goals and objectives for our government:
1. Government will be for the people and by the people. Since the idea of democracy is based on the idea of the "majority rule," it makes sense that the government will be the most responsive to that majority. In the case of the United States, that should be the so-called "middle class," or those making between $40,000 to $200,000 gross household income. Since our framers knew that the majority could be a hard task master and a tyrant in its own right, they built in some restrictions in the structure of government and the protections of rights.
2. Government has the goals of striving for excellence, justice, peace, safety, liberty and a generally prosperous populous. We are not supposed to settle for second best, almost right and or unjust actions. The playing field is supposed to be balanced by the structure of government and the protections of the Bill of Rights so that neither the government nor the majority can impose its tyranny. There are two dynamic functions of the society that is supposed to act in a way to assure these principles are the focus of government and the social forces in our society: politics and economics. Our politics are supposed to be balanced out, creating a level playing field, by the idea of one person-one vote. Our economy is supposed to be balanced out by the regulation of commerce by the government--under the principles of excellence, justice and liberty--for the benefit of all our people.
It is interesting to note that the only place business is given any real attention in the US Constitution is in the "commerce clause," which authorizes the government, under the powers delineated to congress, to regulate interstate business. Since all of our business today is essentially interstate in some manner, it is the federal law that provides the most control over commerce. However, where the federal government lacks jurisdiction, most states have adopted a similar set of regulations to the Uniform Code of Commerce, and other laws, that fill the gaps.
This is where my view gets a little interesting. Our framers made it clear in the Constitution that the rights of the people were paramount. Individuals have the rights. The authority of the government is derived from the consent of the people. Business--all business--does not have any rights unto itself. The rights of a business--whether a sole proprietorship, partnership or corporation--is a product of the people conducting the business. But we have turned this idea topsy-turvy and now have a situation where businesses have more rights than the average citizen.
Businesses have the right to monitor employee behaviors outside of the workplace, according to the case law that has been developed under the conservative-stacked bench. An employee does not have rights in the workplace unless he/she has the money to take a business through a long, arduous and costly process. In most states, the employers have the advantage of an "at-will" employment statute, which is reinforced with a punitive approach to unemployment insurance. If a worker exercises the right to terminate employment due to perceived imblances and unfair treatment in the workplace, the availability of unemployment insurance is limited, if not completely restricted. But if an employer decides to terminate the employment relationship--for what is often arbitrary and capricious reasoning--there are no protections for the worker absent of a strong union or bargaining unit where the contractual obligations are clear and present.
There are no obligations to provide benefits for workers in our society. Despite the authority given to the government to regulate business so that business is a source of productivity, growth and prosperity for all (as outlined in the Preamble), the United States is one of the few industrialized and propserous nations where health care is not a required benefit for workers. The argument coming from business is that providing health care insurance is so costly that doing so is prohibitive and restrictive on business. However, when we see senior executives and board members walking away from their jobs with millions in "golden parachute" deals, and posting record profits without passing dividends on to stockholders (very few companies are posting dividends these day, preferring to leave stockholders to the whims and fluctuations of trading stock), it si difficult to take these arguments seriously.
The access that big business has in congress, the executive branch and our courts puts a stranglehold on our government that squeezes out the average citizen. While big business is hiring lobbyists to represent their interests in congress, and these lobbyists are welcomes into congressional offices and the White House with open arms, most of our letters and petitions to congress, the president and the courts are cast aside, ignored or dismissed. For instance, most of my letters to Senator Richard Lugar and Senator Evan Bayh are responded to with a curt, dismissive form letter or e-mail. Even my letters to Represenative Peter Visclosky, a man I helped to put into office by volunteering to work for his first campaign, are essentially ignored. When I lived in Massachusetts, my birthplace, access to Senators Kennedy and Kerry was limited to those with power, money or influence... and the rest of us got shat upon. But, having worked for a corporation with some clout in the past, I witnessed a situation where the COO and CEO were in a management meeting where an issue of policy and regulation came up, and they dialed "Ted" via a speed dial phone call and were pushed through to Senator Kennedy without delay. The call went through a priority line.
As we have seen lately, big business gets priority treatment even in terms of national security. Big business, even those not having an American base, can buy our ports, highways, tollways, railroads, telecom rights of way, broadcast airwaves, etc., without any real input from the people. Numerous court cases have sided with the arguments of big business, even to the detriment of our environment, our rights as workers, and the rights of people living near businesses that are abusive and/or neglectful. Even the right of business to use the government to steal private property for commercial development has been upheld by the SCOTUS panel of idiots. The rights of the individual are trampled upon by the manner in which this conservative view of the economy is played out at the highest levels of government.
Now, I am not arguing for communism. If anything, history has proven that system doesn't work. In fact, I am a staunch believer in the basic tenets of Adam Smith's economics. But, contrary to the view and approach adopted by the conservatives, I argue that such economics that give rise to priority treatment and access for business over private citizens, is repugnant to the purposes and principles laid out in the Preamble and supported by the entirety of the US COnstitution. Adam Smith's economics are based upon a level playing field where any individual can use the system to strive, struggle and bring forth success without undue barriers and unfair competition.
We must remind ourselves of the purposes, goals, objectives and principles of our government and society by reading the Preamble often and making sure that the constitutional principles are adhered to in spirit, process and by the letter.
Jonathan Chait has written about how this conservative economic view has failed. He references William Niskanen of the CATO Institute as his primary source of bona fides for his observations and arguments. I would recommend reading Niskanen's works at the CATO web site for some real insight into the argument. But some of Chait's observations are fodder for progressives to argue for the government to increase the access for the average citizen, and for using our tax dollars for progressive balancing out of social conditions instead of corporate welfare, regime building, nation building and conducting NSA spying.
Read on McDuff...
The conservative mantra of cutting taxes has been a paradox of failure. The more taxes are cut, the less prosperous most of us have become. The taxes being cut remain taxes that have been placed on the wealthiest of our society (i.e. the estate tax) in an effort to level the playing field. While I am against the taxation of inheritances for most transfers of family wealth, I cannot see the argument for not taxing estate transfers of multimillionaires. These millions were developed on the backs of workers, through the use (dare I say misuse) of governmental processes, and with priorities, influences and privileges not given to ordinary people. These resources should be tapped to finance the continuation of services provided by our government and as a means of balancing the books. It is also THE decent thing to do.
The challenge has been put forth. From Reagan's "tickle-down" economics to George H.W. Bush's "thousand points of light," the economics of the Republican right have proven false. The cost of government has increased exponentially under the reign of the conservatives. Under the so-called "liberal" reigns, our economy has boomed and our standard of living increased dramatically. Under the reign of the conservatives, more millionaires have been created than ever before, but also more poverty-stricken citizens have been produced as well. In comparison, the percentage of millionaires has remained fairly constant under both forms of leadership, but the percentage of poverty-stricken citizens has increased under each conservative period of leadership.
Under liberal leadership, public health approaches improved the overall health of our nation. Access to healthcare resources improved. Disease prevention is a priority and intervention in social problems experience greater success. Access to higher education and resources for elementary and secondary education are enhanced. While liberal leadership has lead to problems of graft and corruption, none have reached the level of scandal that have occured under the leadership of conservatives, including the Savings and Loan Scandal, Enron, Tyco, Adelphia, WorldCom, Abramoff, etc.
Interestingly, Niskanen's arguments are from a moderate perspective of economics, incorporating the principles of the Constituion and Adam Smith's free economics. The lack of response to this research and Niskanen's statements is striking.
But what we want is cheaper government that produces excellence, justice, liberty and productivty. As we can see by examining the current state of affairs with ultraconservative leadership in all three branches of government, government is currently more expensive, productivity is down because jobs and industry are being farmed out to other nations (c.f. Lou Dobbs), justice is scarce and our liberty is being assailed by our own leadership.
I urge you to read CATO Institute's work, especially Niskanen's economic liberty papers, as well as the rest of Chait's article.
The conservative view of the world in the United States argues that a totally free economy will empower participants in that system to create jobs, wealth and success. The argument contends that the wealthiest citizens of such a society will use their money and resources to build industry and create innovations in technology that will give rise to wealth for workers and their families. In theory, the idea sounds like it has some merit. But in practice, the wealthiest of citizens are greedy bastards that manipulate the system so that they can create more wealth and horde it unto their own.
Let us examine this contrary view from the perspective of the US Constitution. The Preamble sets forth some basic goals and objectives for our government:
1. Government will be for the people and by the people. Since the idea of democracy is based on the idea of the "majority rule," it makes sense that the government will be the most responsive to that majority. In the case of the United States, that should be the so-called "middle class," or those making between $40,000 to $200,000 gross household income. Since our framers knew that the majority could be a hard task master and a tyrant in its own right, they built in some restrictions in the structure of government and the protections of rights.
2. Government has the goals of striving for excellence, justice, peace, safety, liberty and a generally prosperous populous. We are not supposed to settle for second best, almost right and or unjust actions. The playing field is supposed to be balanced by the structure of government and the protections of the Bill of Rights so that neither the government nor the majority can impose its tyranny. There are two dynamic functions of the society that is supposed to act in a way to assure these principles are the focus of government and the social forces in our society: politics and economics. Our politics are supposed to be balanced out, creating a level playing field, by the idea of one person-one vote. Our economy is supposed to be balanced out by the regulation of commerce by the government--under the principles of excellence, justice and liberty--for the benefit of all our people.
It is interesting to note that the only place business is given any real attention in the US Constitution is in the "commerce clause," which authorizes the government, under the powers delineated to congress, to regulate interstate business. Since all of our business today is essentially interstate in some manner, it is the federal law that provides the most control over commerce. However, where the federal government lacks jurisdiction, most states have adopted a similar set of regulations to the Uniform Code of Commerce, and other laws, that fill the gaps.
This is where my view gets a little interesting. Our framers made it clear in the Constitution that the rights of the people were paramount. Individuals have the rights. The authority of the government is derived from the consent of the people. Business--all business--does not have any rights unto itself. The rights of a business--whether a sole proprietorship, partnership or corporation--is a product of the people conducting the business. But we have turned this idea topsy-turvy and now have a situation where businesses have more rights than the average citizen.
Businesses have the right to monitor employee behaviors outside of the workplace, according to the case law that has been developed under the conservative-stacked bench. An employee does not have rights in the workplace unless he/she has the money to take a business through a long, arduous and costly process. In most states, the employers have the advantage of an "at-will" employment statute, which is reinforced with a punitive approach to unemployment insurance. If a worker exercises the right to terminate employment due to perceived imblances and unfair treatment in the workplace, the availability of unemployment insurance is limited, if not completely restricted. But if an employer decides to terminate the employment relationship--for what is often arbitrary and capricious reasoning--there are no protections for the worker absent of a strong union or bargaining unit where the contractual obligations are clear and present.
There are no obligations to provide benefits for workers in our society. Despite the authority given to the government to regulate business so that business is a source of productivity, growth and prosperity for all (as outlined in the Preamble), the United States is one of the few industrialized and propserous nations where health care is not a required benefit for workers. The argument coming from business is that providing health care insurance is so costly that doing so is prohibitive and restrictive on business. However, when we see senior executives and board members walking away from their jobs with millions in "golden parachute" deals, and posting record profits without passing dividends on to stockholders (very few companies are posting dividends these day, preferring to leave stockholders to the whims and fluctuations of trading stock), it si difficult to take these arguments seriously.
The access that big business has in congress, the executive branch and our courts puts a stranglehold on our government that squeezes out the average citizen. While big business is hiring lobbyists to represent their interests in congress, and these lobbyists are welcomes into congressional offices and the White House with open arms, most of our letters and petitions to congress, the president and the courts are cast aside, ignored or dismissed. For instance, most of my letters to Senator Richard Lugar and Senator Evan Bayh are responded to with a curt, dismissive form letter or e-mail. Even my letters to Represenative Peter Visclosky, a man I helped to put into office by volunteering to work for his first campaign, are essentially ignored. When I lived in Massachusetts, my birthplace, access to Senators Kennedy and Kerry was limited to those with power, money or influence... and the rest of us got shat upon. But, having worked for a corporation with some clout in the past, I witnessed a situation where the COO and CEO were in a management meeting where an issue of policy and regulation came up, and they dialed "Ted" via a speed dial phone call and were pushed through to Senator Kennedy without delay. The call went through a priority line.
As we have seen lately, big business gets priority treatment even in terms of national security. Big business, even those not having an American base, can buy our ports, highways, tollways, railroads, telecom rights of way, broadcast airwaves, etc., without any real input from the people. Numerous court cases have sided with the arguments of big business, even to the detriment of our environment, our rights as workers, and the rights of people living near businesses that are abusive and/or neglectful. Even the right of business to use the government to steal private property for commercial development has been upheld by the SCOTUS panel of idiots. The rights of the individual are trampled upon by the manner in which this conservative view of the economy is played out at the highest levels of government.
Now, I am not arguing for communism. If anything, history has proven that system doesn't work. In fact, I am a staunch believer in the basic tenets of Adam Smith's economics. But, contrary to the view and approach adopted by the conservatives, I argue that such economics that give rise to priority treatment and access for business over private citizens, is repugnant to the purposes and principles laid out in the Preamble and supported by the entirety of the US COnstitution. Adam Smith's economics are based upon a level playing field where any individual can use the system to strive, struggle and bring forth success without undue barriers and unfair competition.
We must remind ourselves of the purposes, goals, objectives and principles of our government and society by reading the Preamble often and making sure that the constitutional principles are adhered to in spirit, process and by the letter.
We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.
Jonathan Chait has written about how this conservative economic view has failed. He references William Niskanen of the CATO Institute as his primary source of bona fides for his observations and arguments. I would recommend reading Niskanen's works at the CATO web site for some real insight into the argument. But some of Chait's observations are fodder for progressives to argue for the government to increase the access for the average citizen, and for using our tax dollars for progressive balancing out of social conditions instead of corporate welfare, regime building, nation building and conducting NSA spying.
Read on McDuff...
A few weeks ago, I wrote a column about a paper that decimated the conservative worldview. The study, by William Niskanen of the Cato Institute, found that the conservative "starve the beast" strategy does not work. Indeed, since 1981, he found that tax cuts tend to produce more spending, while tax hikes produce less.
The conservative mantra of cutting taxes has been a paradox of failure. The more taxes are cut, the less prosperous most of us have become. The taxes being cut remain taxes that have been placed on the wealthiest of our society (i.e. the estate tax) in an effort to level the playing field. While I am against the taxation of inheritances for most transfers of family wealth, I cannot see the argument for not taxing estate transfers of multimillionaires. These millions were developed on the backs of workers, through the use (dare I say misuse) of governmental processes, and with priorities, influences and privileges not given to ordinary people. These resources should be tapped to finance the continuation of services provided by our government and as a means of balancing the books. It is also THE decent thing to do.
I wrote that it would be interesting to see how conservatives reacted to having the factual basis for their entire domestic strategy exposed as a fraud. And it is interesting because "starve the beast" is so central to the GOP approach to governing and because the reaction is a case study in how the conservative movement reacts when its views are disproved.
The challenge has been put forth. From Reagan's "tickle-down" economics to George H.W. Bush's "thousand points of light," the economics of the Republican right have proven false. The cost of government has increased exponentially under the reign of the conservatives. Under the so-called "liberal" reigns, our economy has boomed and our standard of living increased dramatically. Under the reign of the conservatives, more millionaires have been created than ever before, but also more poverty-stricken citizens have been produced as well. In comparison, the percentage of millionaires has remained fairly constant under both forms of leadership, but the percentage of poverty-stricken citizens has increased under each conservative period of leadership.
Under liberal leadership, public health approaches improved the overall health of our nation. Access to healthcare resources improved. Disease prevention is a priority and intervention in social problems experience greater success. Access to higher education and resources for elementary and secondary education are enhanced. While liberal leadership has lead to problems of graft and corruption, none have reached the level of scandal that have occured under the leadership of conservatives, including the Savings and Loan Scandal, Enron, Tyco, Adelphia, WorldCom, Abramoff, etc.
Well, the right has had sufficient time to formulate its response. The results aren't very impressive.
Out of the reams of conservative commentary published over the last month, I have found exactly two items reacting to Niskanen's research. Given his paper's devastating implications, the response is quantitatively--and qualitatively--pathetic.
Interestingly, Niskanen's arguments are from a moderate perspective of economics, incorporating the principles of the Constituion and Adam Smith's free economics. The lack of response to this research and Niskanen's statements is striking.
The first is an op-ed column by Nick Schulz in National Review Online. Schulz found Niskanen's finding a big puzzle. "Why would tax cuts prompt more spending?" he asks. "The only explanation so far comes from Niskanen himself," who hypothesizes that tax cuts make government cheaper, so voters want more of it.
But what we want is cheaper government that produces excellence, justice, liberty and productivty. As we can see by examining the current state of affairs with ultraconservative leadership in all three branches of government, government is currently more expensive, productivity is down because jobs and industry are being farmed out to other nations (c.f. Lou Dobbs), justice is scarce and our liberty is being assailed by our own leadership.
I urge you to read CATO Institute's work, especially Niskanen's economic liberty papers, as well as the rest of Chait's article.
posted by Jim Downey at 12:25 AM
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