31 March 2013

Caveat Homo Sapiens: Politicians and the Economy

I often say that Republican President Dwight Eisenhower was considerably more liberal than the last two Democratic presidents, Bill Clinton and Barack Obama. In this post I hope to show why. When I came to the US to college, the country was at the height of its affluence and it has never been that wealthy since. The tax structure developed during the New Deal was still in place, resulting in widespread distribution of wealth, rather than concentration at the top. Everyone benefited, even the rich, when the income gap between the wealthiest and the rest of us was not too wide.

It was also a time of tremendous social unrest driven by the slow response of society to the need of the minorities, especially the African Americans, for acceptance into the wider culture, dignity, jobs, and education. Some of the violent outbursts that occurred made many people recoil: they left the cities and took refuge in wealthy all-white suburbs and turned inward. The resignation of a president and then the shock of sharply increased oil prices on top of the social pressures gave people the sensation that the country was adrift and without purpose.

At the moment things began to turn sour, an intense propaganda campaign began to turn the equation conservative=bad (the opinion of most of my West Texas college classmates when I was an undergraduate) into conservative=good. Arguments that had been cast aside by our parents gained new life: "business friendly" meaning de-regulating and letting business do whatever it wants, and "right to work" meaning I, the employer have the right to hire you or not and you have the right to accept my offer or not; that makes us equal. Of course this is bogus: the employer holds all the cards and the job seeker has no money to get into the game. This is the thinking that created monopolies, horrible working conditions for measly pay, and the robber baron class of the late nineteenth century and early twentieth.

Since Americans abhor the study of history, they were taken in (and are still being taken in) by a totally one-sided view of business: It is always good, it is always right, it is the only model for all of society. It is taking over spaces we never allowed it to before: education, government, the church (all organizations whose purpose is not to make money, but who help the economy by spending).

In this atmosphere, it is not surprising that all regulation became suspect and that we have eliminated most of it. The confusion of free markets for the selling of goods (Adam Smith's free market of the eighteenth century, much like current farmers' markets but with the added feature of haggling for prices) with unregulated financial markets caused the Great Recession of 2008.

We need to relearn what we learned in the 1930's and 40's. We must have reasonable regulation of financial markets, keep banks from growing too large, stimulate the economy during times of recession, and wait to decide on budget changes when the economy is good. Government is not a business. Government spends money, as well it should. Government per se is not bad. It is supposed to be us (or our representatives). If we want to set our house in order, we need to start by agreeing on how to take money of the equation during elections. If there were no paid political propaganda on TV, the influence of money on elections would be severely curtailed and Congress may begin to feel that it can represent us instead of those who bankrolled their election. Let's at least think about this.

Please check out the new edition of Angela 1: Starting Over in paperback and at a much more accessible price: www.amazon.com/author/bedforddavid . Angela is at the beginning of finding out how the world works, a process that will set her at odds with many ordinary people and especially those who profit from our ignorance or inattention.

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