Wednesday, 23 June 2010

Big Government vs Big Business

So you’re sick of big government and want to throw out all “dah bums?” Well just be careful you don’t turf the baby out with the bathwater.
There are megalomaniacs galore sniffing the wind and only dying to run against Washington. Question is, what’s their plan when they and their lobbyists get elected, and will it be good for you – or the country?
Shock tactics to reduce the deficit could send the economy hurtling into a depression. The time for such measures was in the mid years of the Bush administration when property and stock values were booming. Of course, few of the current guardians of fiscal probity gave much thought to deficits when rushing to an unnecessary war in Iraq or squandering the Clinton surplus.
“Big” government did not get us into the current financial crisis nor cause the Gulf oil spill. Loosening of regulation, at the behest of “big” business, did – which begs the question: which of these “bigs” do you trust more?
Ever hear about the Irish Famine of 1781-83? Probably not – since the British Government of the time banned the export of surplus crops from Ireland thereby ameliorating the suffering.
In a somewhat similar situation in 1845, however, mercantile forces argued that another such ban would damage the British economy.
A pity about that, because active government intervention could have prevented a million or more Irish dying during the great Potato Famine even as bounteous harvests of wheat and corn were exported.
Now there’s no denying that government regulations can impede commerce –but what’s the alternative? In 1933, during the height of the Depression, the Glass-Steagall Act was passed to save the country from the speculative excesses of the banks.
Over sixty years later, President Clinton, to his much later chagrin, took the advice of Treasury Secretary Robert Rubin and other Wall Streeters, and allowed vital parts of that bill to be scrapped – leading to the recent financial crisis.
Mr. Rubin and Alan Greenspan, Chairman of the Fed were convinced that the markets would regulate themselves - that the financial masters of the universe would walk away from excess profit rather than risk destroying the whole economic system.
That sentiment and $2.25 will get either of those gentlemen on the subway should their corporate limos ever break down.
Most anti-Washington phobia stems from a fear that government is unresponsive and inefficient. But big government is akin to Mother Teresa when compared to big business where profit is the only bottom-line.
The truth is we need both biggies - one to make the bucks, the other to ensure that the rest of us don’t get trampled in the stampede. For when the tough get going, the going most certaintly gets tough.
Government has been forced to bail out many the tough guy of late, with notable success. Most of the big casino culture banks are making money hand over fist again, not to mention that the Treasury has been repaid – with interest.
I’m no apologist for the American motor industry but the government bailout did prevent the collapse of Michigan and neighboring states. 18 months later Ford, GM and Chrysler have either repaid their loans or are close to doing so, all at a decent profit to the Treasury.
The one remaining black eye is the still unregulated insurance giant, AIG, to whom President Bush was forced to fork out over a hundred billion. But given time and a rejuvenated economy even this gigantic slot merchant may refund the house.
We’re coming through a huge crisis, most of it caused by unregulated greed. It’s galling that we were forced to bail out any of these business behemoths, but with stock markets plunging and employment lines lengthening, what was the alternative? Government was the last bulwark and it did its job when business failed us.
Perhaps some stimulus money was spent unwisely, although thousands of teachers, cops, and other civil servants whose jobs were saved would disagree.
The boom times will not return soon, perhaps just as well, for in our roller-coaster economy boom is invariably followed by bust.
So turn off your televisions - there are no simple solutions, particularly from blustery sound-biting commentators whose real job is to fill the spaces between ads for BP and Viagra. And when the new megalomaniacs come soliciting your vote, ask them what they’re for – not what their lobbyists are against.

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