This article from the on line version of the Economist Magazine hits the nail on the head by elaborating on a theme I have been pounding for a long time now: i.e. both major parties are two sides of the same Big-government, Crony-Capitalism (aka Corporatist) coin.
It is no coincidence that the Washington DC metro area now contains seven of America’s ten richest counties!!!
Washington DC was one of the few (if only) regions where real estate prices kept going up in the wake of the 2008 crisis! Why? Because Washington DC continues to be ground zero for decision making in the economy. The more decisions and regulations set in Washington DC, the more opportunities there are for lobbyists and congress members to enjoy new and ever more lucrative rent seeking activities. The economic boom in Washington DC comes at the expense of the rest of the country.
Why do we believe the hollow promises by politicians to solve our social and economic problems?
More than half of the members of Congress are millionaires, many of whom are professional politicians. How do professional politicians accumulate so much wealth?
The more power we give to government, the more opportunities we give to politicians to take advantage of big-government corporatist rent seeking activities.
Obamacare is full of sweeteners to big pharma and big insurance. Dodd-Frank does nothing to reduce the incredible consolidation of the financial sector. In fact, Obamacare doubles down on a failed system organized around massive subsidies to health insurance companies.
Meantime, the five largest banks hold a share of U.S. assets 30 percent larger today than in 2006!
THE BIG KEEP GETTING BIGGER! Trust busting in the early 20th century is often used as an example of successful and necessary government intervention that works. the law of unintended consequences, however, always catches up with such superficial and initial "successes." it often take times to manifest, but it always does.
Anti-trust is often used now by companies to gain government favors and competitive advantage rather than to reduce market power.
Central banking has also been an example used by defenders of government intervention in the economy. Since the Fed was established in 1913, we’ve had 2 world wars, a Great Depression, the Great inflation of the 1970s, the Iraq and afghanistan War and the Great Recession of 2009 (and counting). The Fed facilitated spending for war and also facilitated the booms that led to bust in the 1920s and again in the 2000s. The Fed sows the seeds for disaster then argues it is the only institution that can save us from disaster.
ALL government interventions aimed at guaranteeing social and/or economic outcomes are subject to the law of unintended consequences. This natural law leads to the general impoverishment of society and the enrichment of politically connected elites!!!
Romney took a lot of flack for talking about the 47% who don’t pay taxes. This issue is a distraction from what really matters. That is the fact that cronyism is on the rise -- and neither major party has an answer!!!
The real beneficiaries of public largesse are politicians and their crony allies in the sectors of economy that enjoy the largest public subsidies: big banking and finance, big insurance, big pharma, big farm, big green energy, secondary education, the military industrial complex and the latest arrival to the public pork pig-out: big homeland security. As the Economist explains in the article copied below: "a rapidly expanding security state is more parasitical than protective."
We can thank the Republicans and Bush 43 for establishing the homeland security industrial complex.
The problems we face are bipartisan problems which will not be solved by finger pointing or nostalgic talk of how government used to solve problems with bipartisan cooperation.
Our two major party system is a false choice between two different flavors of big government. Until we recognize that, it doesn’t matter which party is in charge, Washington DC will get wealthier and wealthier, and our country will continue to be impoverished – financially, culturally, physically and socially.
Wake up fellow Americans.
We are so trained to vilify the “other” no matter whether it is the other party, or the other socio economic group or the other in terms of foreign policy threats, that we fail to look in the mirror and to see that neither major party is really willing or able to fix what is really broken in this country.
What is really broken is our own fault individually and collectively.
We have willingly handed over to the government more and more responsibility to keep us safely employed, to keep us protected, to keep us healthy and educated and to help provide “equal opportunity for all” (by leveling the so called playing field). We have consistently and willingly and knowingly traded our liberty little by little for safety, and we have ended up with neither… just as Ben Franklin warned would be the case 200 years ago.
Obama promised to change Washington DC and now he admits it is impossible to change Washington from the inside. We have seen Obama co-opted at every turn. Co opted by big Wall Street (big banks have gotten bigger!!!), co-opted by big insurance and big pharma (Obamacare is a fiscal disaster thanks to give-aways to big insurance and pharma), co-opted by big labor (blocking school reform), coopted by big Green energy (solydra), coopted by his own party and Congress (in two failed and pork stuffed stimulus packages).
George Bush created a massive new industrial complex: the homeland security complex which now employs tens of thousands of analysts and requires billions of dollars in bureaucratic over sight and that will only grow and grow and grow bigger and bigger. Note the reference at the end of this article when the author says that Obama is likely to be slightly more “corporatist” and Romney is likely to be more “militaristic” but in the end both parties are defenders of the status quo crony capitalism aka corporatism we “enjoy” today.
All those Dems who think government can protect the little guy from big business, look at Obama’s record and please take the rose colored glasses off! Big banks and big insurance and big pharma have only gotten bigger under Obama and they will continue to do so. all those Republicans who think the GOP is for “free” markets is kidding himself or herself given the fact that the GOP is also for an unaffordable military and homeland security industrial complex as well as for a Central Bank system that is anything but a “free” market. The GOP has no answer for “market failure” as happened in 2008 because it doesn’t understand or admit to the massive interventions it promotes in the economy that undermine and distort the market, including massive public spending on defense and homeland security, and the central bank system that is required to fund GOP public spending priorities.
both parties promise that we can have our cake and eat it too. both parties promise free lunches.
It is often said that a democracy can’t function with a gold standard. I believe history will prove the opposite. That a democracy can’t survive without a gold standard – by a gold standard I mean a monetary standard that cannot be manipulated by politicians and where the market provides sound money.
Naysayers who say the world is too complicated for a gold standard have it upside down. The world has become overly complicated thanks to government manipulated money. Central banking IS systemic risk. There is no such thing as systemic risk in a market without a central bank.
One day we will demand sound money when the government inevitably crashes their pie-in-the-sky central planning monetary system that promises the ultimate free lunch: wealth via money printing.
are we really that stupid? no we are not that stupid. we just stopped thinking for ourselves. "we" (our political elites with our tacit approval) have developed a massive infrastructure of experts who design massively complex models and theories that "prove" to themselves and thus to all of us non-experts that money does grow on trees.
Wake up America!
American politics
The capital of takers
The splendour of empire
Sep 24th 2012, 13:22 by W.W. | HOUSTON
· SPEAKING of making versus taking, the Washington, DC metro area now contains seven of America's ten richest counties. Matt Yglesias of Slate comments:
The simple explanation is that we've gone corrupt and decadent, and as the vitality of the American empire declines its capital grows more splendid. The more sophisticated explanation, offered by David Leonhardt in August, is that the DC area is affluent for the same reason the other affluent parts of America are affluent—a very high share of the population has college degrees. But that in some ways only pushes the question back a further step. All these college graduates didn't end up in DC by coincidence. Rather, the national economy has transformed in such a way as to encourage large numbers of educated people to move here in search of work or because you accepted a job offer.
Mr Yglesias rightly notes that the capital region's magnetism to the well-schooled isn't entirely a matter of an increasingly politicised economy. He mentions, for example, the movement of many publications and journalists to the Washington area as an effect of the decline of local newspapers in the internet age. But, Mr Yglesias argues,
...it seems a little implausible to avoid the conclusion that on the whole the American economy has gotten more deeply invested in influence-peddling—broadly construed—and that this is driving the Washington area to the top of the charts.
Agreed.
What, then, are we to make of the fact that the Washington area's rising affluence has resulted from an influx of highly-educated workers? If you refuse to assume that lobbying, lawyering, and contract-seeking generally create rather than consume wealth, it would appear that many of America's best-trained workers are increasingly drawn into enterprises that, on the whole, take more than they make. Which augurs ill for America's future.
This implies, moreover, that there is a non-silly "maker/taker" distinction, but that Mitt Romney has it all wrong. It's well and good to worry about welfare dependency, but it's rather more important to highlight the economic drag of dependency inherent in America's increasingly corporatist political economy. Tim Carney of the Washington Examiner nails it:
Romney was correct that a portion of America backs President Obama because they "are dependent upon government" and "believe that they are entitled." We even know these dependents' names: Duke Energy CEO Jim Rogers, General Electric boss Jeff Immelt, Pfizer lobbying chief Sally Sussman, Solyndra investor George Kaiser and millionaire lobbyist Tony Podesta, to list a few.
In the last few years of bailouts, stimulus, Obamacare and government expansion in general, we have seen median income fall and corporate profits soar. Industries are consolidating as the big get bigger while the little guys shut down.
When government controls more money, those with the best lobbyists pocket most of it. The five largest banks hold a share of U.S. assets 30 percent larger today than in 2006. Also, as Obama has expanded export subsidies, 75 percent of the Export-Import Bank's loan-guarantee dollars in the past three years have subsidized Boeing sales.
Romney, however, wasn't talking about corporate welfare queens. He was talking about the 47 percent of the population that pays no federal income tax.
If the taker economy has less to do with citizens receiving transfer payments and rather more to do with crony capitalism (or "public-private partnership", as boosters like to put it) and a rapidly expanding security state that is more parasitical than protective, then it is not at all clear which major-party presidential candidate is most on the side of the makers. My hunch is that Mr Obama is slightly more corporatist and slightly less militarist than Mr Romney, but that's no more than a hunch. Sadly, I'm confident that the opulence of the imperial seat will only wax, no matter who deals and doles from the west wing.
(Photo credit: AFP)
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