Written by Alicia Morgan
A commenter on a recent post of mine strikes a condescending and self-congratulatory note, and scolds me for “whining about the success others have achieved” while castigating those who bought homes they could not afford. Ah, yes – the ‘Moral Hazard’ argument, which applies only to the less-fortunate, but not at all to the too-big-to-fail banks and investment companies, who are now making more money than ever, courtesy of us, the American taxpayers – who, of course, get no such treatment from the recipients of our largesse, but, incredibly, refuse to help those who saved their bacon on the grounds that ‘it would reward bad behavior!’ Is that the “success” of which I’m supposed to be envious, and to which I am to aspire?
As usual, the Bizarro logic of conservatism rears its head, which leads me to the subject of this post. The most dearly-held beliefs of the conservative philosophy so often include belief in mythical creatures such as “The Invisible Hand of the Free Market”, which they revere as if it were a scientific fact like gravity, or inscribed in red in the KJV Bible, instead of a misinterpreted and unsubstantiated economic theory, the implementation of which has brought us to our economic knees. Most of us, anyway. It’s like they believe in a Bizarro Santa – one who does travel through a chimney and does have a bag of goodies, but instead of coming down the chimney and distributing the goodies, goes up the chimney with his bag crammed full of our stuff, and flies off to the North Pole with it.
My answer to lightnindan is as follows:
Wow – well done! You have managed to take every plutocratic talking point and tie them up together into a nice neat bow! You missed a couple, to be sure; don’t forget about the Welfare Queens® and Lazy People Who Don’t Want to Work but Want Other Hard-Working People to Support Them Instead™.
First of all, you start off with a fallacy that you take for a law of nature, like gravity: “You lower taxes to encourage people to engage in certain behavior.”
Your smug and condescending attitude aside, this is not a fact. This is a theory. And, I may add, a theory that has not held up especially well. We HAD the ‘lower taxes’. It’s not like it hasn’t been tried. Since 2000, this theory has had all the room it could use. And this is where we have ended up.
The word “taxes”, by the way, is – in the context of which it has been used in our public discourse – merely a buzzword for ‘taking money from me that I’ve earned and giving it to lazy people or the Gubmint’. What if your ‘taxes’ were eliminated, but you had to pay for roads, schools, infrastructure, public safety (police, firefighters), snail-mail (at what it actually costs to mail an object as opposed to what government subsidy of the post office allows us to pay), the legal and justice system (which affords you contract protection, among a host of other things) etc. – all the things that we take for granted that the government manages in our behalf?
You act like every penny you ‘earn’ came directly out of your ass, instead of the fact that it costs a LOT of money to put together a societal infrastructure where people can do business in the secure knowledge that there is a system of laws to protect you contractually, and a physical and communication infrastructure to support your ability to conduct business with other entities. Also, a public education system insures that you will have educated people to employ, and improve the country. Whether or not you have children has nothing to do with whether as a nation we should support public education and whether you as an individual should pay your fair share of it. Public education, and the GI Bill which allowed returning soldiers to go college, is what allowed us to be intellectual and scientific leaders in the world in the 50s, 60s and 70s. Now, we are falling sadly behind other nations who DO invest in their citizens’ education.
But instead, your attitude is like that of a four-year-old who wants to sell lemonade on the sidewalk, so his mama spends money to make the lemonade, gives him a table and a chair to sit in, gives him the pitcher and the cups, and helps him draw a sign that says “Lemonade 5¢”, and then proudly claims that “I did it all myself!” It is a childish, simplistic and ultimately unrealistic view of economics.
You merely trot out the same tired talking points and sad little ‘I got mine’ boasting and finger-pointing. Same with the ‘Big Bad Government’ stuff. Child, please.
Yes, there are individuals who overspent, and overbought, just like there are welfare queens and lazy freeloaders, but they are not anywhere near in the majority, nor are they the reason that the economy collapsed. They are the tokens that the banksters, nultinational corporations and Wall Street would like you to believe are the real problem – like a sleazy magician, misdirecting and pointing in any direction as long as it’s away from themselves.
Let’s break this down in real terms.
When the cost of living rises, and wages do not, what happens?
One has two choices – work more, and spend less.
This is what most of America has done since 1980.
But, eventually you get to where there are simply no more hours that one can work – even in an economy where there are jobs (unlike right now). And you get to where there are no more corners that you can cut, and the belt will not tighten any more.
Every year, we have been told through our wages that our work is worth less than it was the year before. Yet, productivity has increased dramatically – without wages following suit.
This is not conjecture; this is fact. Wages have been stagnant since 1980. And corporations and businesses WILL NOT raise wages unless they are compelled to. This, by the way, is not a criticism of corporations. Why should they? Their one and only directive is profit, and if they reduce their profit by paying more out in wages than they are compelled to, they are breaking their contract with their shareholders. They have to do what they were made expressly to do. They are legally and contractually bound to maximize their profit. This does not make them inherently bad; this is why they need to be regulated more firmly so as not to injure people.
This, by the way, is why they should not be considered legal people. Their aims, interests and needs are different than the aims, interests and needs of human beings.
So how are wages kept commensurate with prices? Through the pressure of collective bargaining. This is the only way to insure that there is enough power on the opposite side of the table to keep things equitable and balanced. It is not to be expected that a corporation which depends on quarterly profits is going to voluntarily reduce those profits for something that will not directly and immediately benefit it. There has to be a standard held on what labor costs, because these are human beings who need to eat, breathe, and live, not inanimate objects.
But it is the people running these corporations, banks and investment firms who are profiting in the most grotesque way imaginable. As much as conservatives like to howl about ‘redistributing wealth’ – it’s the most nefarious Communism if that redistribution goes from the top to the bottom (which it never does – the merest mention of the idea is enough to send them into a tizzy) they have no problem with ‘redistributing’ wealth from the bottom to the top, and that is what has happened.
So, go on and live in your self-congratulatory kindergarten fantasy world. It’s too bad you can’t see that the Santa you believe in is Bizarro Santa – going UP the chimney – with all your stuff in his bag.
Or, as the Big Red Man says: Ho. Ho. Ho.
Good article, except it’s not really Adam Smith’s ‘Invisible Hand’ at work, it’s Milton Freidman’s — and even there the late UC economist would have been appalled at the straight-out worthless-paper fraud that’s been santioned and excused on Wall Street and in the banking industry. Even Uncle Miltie believed that those who made the mistakes should pay for them.
Of course, you are completely correct. But the people who are clamoring to ‘let the market decide’ don’t know that. Most of them have never heard of Milton Friedman or the Chicago School – or any other real player in this game. They just know catch-phrases – “Free Market” vs. “Socialism”, “Tax and Spend” (as if there is a government anywhere that neither taxes nor spends!), “Big Goverment” and the like.