Bill Frezza, Contributor
Would a farmer who put out a trough of slop be surprised if it attracted a bunch of pigs? Then why are activists who promote enlarging the size and scope of government shocked when one program after another is hijacked by corporations that find it easier to seek favors in Washington than customers in the marketplace? And, knowing that such corruption is inevitable, why do mainstream media dismiss those who advocate curtailing government powers as corporate stooges?
What leads anyone to believe that unconstrained power can be channeled in ways that don’t favor the politically connected? And why are the politicians who repeatedly put out the slop troughs, then theatrically rail against the pigs, rarely penalized at the polls?
How long will people continue to believe the “too big to fail” fear-mongering propaganda which both parties use to justify squandering public funds to socialize losses and privatize gains? How many times does a court economist have to be wrong about the impact of expensive economic interventions before we add him to the unemployment rolls?
If protestors are angry that Wall Street interests control the government, why do they want to increase the government’s role in the economy rather than decrease it? What makes them think that banging on drums and spouting incoherent slogans is a more effective way to influence politicians than the proven practice of putting them on the payroll? What would happen to the flow of campaign contributions from crony capitalists if money could no longer buy legislative and regulatory favors? And why do anti-corporate activists keep fruitlessly trying to cut off the flow of money instead of working to ban the favors that attract it?
How does the failure to distinguish between honestly earning profits by meeting customers’ needs and getting rich by looting the public treasury make it possible to end the latter practice without destroying the former? And if we cannot define and promote a sustainable form of capitalism weaned from government corruption, where are all the jobs the nation needs supposed to come from?
How disorderly can class warfare-inspired protests grow, while police are instructed to look the other way, before violence becomes a widespread means of political expression? Will Oakland, Portland, and other cities burn when springtime rekindles the Obamaville encampments that serve as the most potent symbol of this failed presidency? How can politicians, union leaders, and other opportunists not realize that encouraging this mindless thuggery will eventually blow up in their faces? Will the American public recoil when innocent people are killed solely because they work for politically disfavored corporations, or will they shrug it off as collateral damage, as did the Greeks?
When the government hands out other people’s money to crony capitalists promising “green” jobs, does this magically turn them into effective innovators? How are experimental technologies based on ideological fantasies supposed to achieve commercial sustainability by being rushed to market for purely political considerations? How does crippling the evolution of proven energy businesses through capricious regulations and endless environmental reviews make our energy future more secure, our economy more robust, or high paying jobs more plentiful?
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Unfortunately for most people, such as this author, their simple view that larger government = stricter regulations and smaller government = less regulations simply isn’t true.
Government spending, which is out of control and inefficient, and proper regulation of private business, which is non-existent in America (point: the free market hates clean air – http://www.businessweek.com/news/2011-11-14/fight-on-clean-air-rules-threatens-to-delay-power-payback.html), are not synonyms. This is simply a straw man propagate by those who seek to promote a “free market” philosophy.
The free market, is after all, infallible. Look no further than the price of oil telling you there are no economic woes anywhere, the boom is back.
TJWP, I might ask, can you prove that smaller gov’t doesn’t mean fewer regulations? Because it is very very easy to show that larger gov’t has meant thousands of more regulations.
Oil is going up because of Israel and Iran. If Israel bombs Iran, 102 buck barrel of oil will be a steal.
Also, it seems you missed the point of the article. As gov’t grows, so does the opportunity for crony capitalism.
It seems the author missed the point that OWS isn’t calling for a bigger government role in the economy but rather effective regulation.
Correction: Some within the OWS movement, I do not speak for the movement and it does not speak for me.
So you mean because parties that do not produce or use oil are betting on a war in the middle east? Does that sound like effective price signals that reflect underlying expectations of producers and users with regards to future supply and demand conditions? I understand why a degree of flexibility is required, but to claim that unchecked speculation on commodities generates efficient price signals seems a little far fetched.
With regards to your question, I can show it anecdotally but not rigorously. You could, for example, reduce or get rid of the TSA and Department of Homeland security and increase financial regulations on derivatives. Smaller government, more regulations. Ultimately though it is a matter of effectiveness not magnitude and as long as those being regulated, and with a vested interest in reducing those regulations, play a large part in crafting them they will be inefficient. Negative externalities do not factor into profit maximizing optimizations.
More regulation simply offers more opportunity for cronyism and more opportunity for gov’t to provide favors to reduce the impact of regulation.
Re oil: seriously? Can you find one person in the world who does not use oil?
At these prices I’m sure I will be able to find more and more every day.
In all seriousness though, I simply meant that derivatives trading firms should not be able to move the markets via leveraged speculation. Trade everything without margin and you solve most of the volatility problems as you raise the price to speculators but less so to people who are intent on delivering / taking delivery.
My solution is to let the derivative trading firms blow themselves up with their own leverage. The smart ones can keep trading.
There used to be a law against trading essential commodities.
Derivatives and hedging came into play to help farmers and other industries get through he bad times of price fluctuations based solely on supply and demand.
GS and others lobbied for years to dismantle this regulation, that protected citizens, so that they could make more money and take control of commodities without physical delivery.
It is bad enough when a bank can borrow $1million at the Fed window for 0.25% and buy treasuries paying 3%
It is another thing to leverage this money ten for one and then take this money to the futures pits and leverage again 10:1 to buy oil futures.
As for big government. We manufactured fear creates opportunity to create committees and sub committees in order to get people paid and to help pout heir corporate friends and or masters.
Big government itself is not inherently bad, but rather they way this government seeks to operate.
Regulation is a good thing inherently, but when it is used as a tool to create monopolies, or levy taxes..well then there is a problem.
Cronk- Big Government is inherently bad. The way a gov’t seeks to operate has nothing to do with its size. The fact of the matter is that all gov’ts tend to progress towards corruption or dysfunction or both. Thus, better they stay small.
Growth of gov’t is due entirely to gov’t growing itself, serving itself, its politicians and its cronies. It is essentially a fantastic monopoly.
OK, fact, woods. No intelligent person would debate.
But please, for the love of your kids future, realize that deficits aren’t. They are necessary. They are, literally, equal to savings. Austrians, believing that private savings is what fuels growth and innovation, should cheer deficits. No deficits, no savings. FACT
Do what’s the lesson? Less taxation.
Woods, FACT FACT FACT, deregulation of commodities markets has harmed the greater good.
And smaller govt. But understand that some govt is needed, some regulation is needed.