MARC CHOQUETTE
Perspectives Editor
As a recession looms, gas reaches over $4 per gallon in parts of California and blocks of houses sit foreclosed and empty in the Inland Empire, we have to wonder what happened to the booming economy that the textbook free market policies of the Bush administration were supposed to bring about.
George W. Bush’s inauguration in 2001 ushered in the most business-friendly economic policies in the history of our country. They have been staunch followers of “Reaganomics” and his famed “trickle down” effect — the idea that the more money you give back to the wealthy, the more they will re-invest and the subsequently stronger economy would cause a trickle down of wealth to the lower classes.
The principle of “Laissez-Faire” says the government that governs best governs least — and by this measure it is safe to say the Bush administration has excelled. There has been massive de-regulation in nearly every private sector since 2001. And Adam Smith’s “Invisible hand” has also been a reigning force in our government’s approach to the private sector, with the argument being that an individual maximizing his/her profits ultimately ends up maximizing the revenue of the society as a whole.
So we have let the free market run the show, we have allowed substantial tax cuts to be allotted to the top five percent of income earners and big business — and despite all these changes for the “better,” the invisible hand we put so much trust in is now slapping the smiles off our faces, and the money out of our wallets.
Conservatives like to argue that government intervening in any fashion with the free market creates inefficiencies that disrupt the profit margins of private business. This is true — but is this really as bad as we have been coaxed into believing?
The Bush administration has kept their hands out of private industry (and has helped them with massive tax cuts), yet all we seem to have to show for it is a mass exodus of labor to China (because it was the “smart” business decision to make), increased prices for good coupled with stagnant wages and a new era of cronyism, monopolies and corruption that rivals the Gilded Age with Rockefeller, Carnegie and Standard Oil.
Wal-Mart, for example, has been the perfect poster child of what can be accomplished when one plays a near perfect game in the free market. According to economic theory, almost every decision they have made regarding their business has been genius. But every action has a reaction — and there are plenty of negative reactions to speak of that our poster child conglomerate has brought about. For one, they have effectively killed small business (which was a staple of the disappearing middle class … connection?) with their ridiculously low prices. Many argue these low prices are good because it makes products more affordable for the average consumer, yet when Wal-Mart stands beside other countries as the sixth biggest exporter from China, we have to wonder if Wal-Mart’s low prices (which are a trade-off for exporting jobs from America to locations where labor is cheaper) are really benefiting our economy.
By giving no-bid contracts to Blackwater USA, our tax dollars have hired, in effect, private hired mercenaries whose numbers rival those of our entire U.S. military force in Iraq. Why is this a big deal? Not only because this is coming out of our pockets, but that these mercenaries are not bound by Iraqi, United States, or international law.
Need another case of corruption? It was just recently discovered that Texas-based Southwest Airlines was a little too snuggly in bed with officials high up in the Federal Aviation Administration — all the while somehow avoiding clear violations of consistently flying planes not considered “airworthy” due to cracks in the fuselage. Only this year did the FAA fine them, and it didn’t occur until an outside whistleblower came forward. This clear conflict of interest barely caused a ripple in the media or the doomed airline industry and might go a long way in explaining how Southwest has been able to gain a clear advantage in the industry over the past decade.
The overarching theme of these examples helps prove the point that deregulation and the hands-off approach might be good in theory, however in practice it usually leads to a culture of cronyism, extreme corruption and massive compromises of safety, security, decent wages and working conditions — all in the name of higher profits. All the past eight years have proven is that government can have a non-interventionist policy with regard to private industry, yet without serious regulation by federal agencies like the FDA, FAA and EPA, negligent abuses will pile up for the simple reason that companies know they will not get caught. After all, many hold the mentality that “it’s not cheating if I don’t get caught.”
It goes against the very principles of our country and our Christian faith that this system works for a few people at the top and screws over a lot more people at the bottom. We are taught to be our brother’s keepers and to treat our neighbors as you would like to be treated. Yet we seem to justify massive inequalities in income and opportunity with the ridiculous cop-out of, “well, that’s how it goes.”
Disparities in wealth will always exist in an economic system such as ours, but it’s a very troubling sign that the gap between the rich and poor continues to widen as the middle class disappears. As responsible Americans who love our country, our allegiance should be encouraging re-investment here, not in China (which clearly only lines the pockets of the rich or the privileged).
It has been said that the most successful leaders and societies are the ones that learn from history. One thing that is clear from studying the lead-up to the Great Depression is that we haven’t seemed to learn anything.
04-10-2008