Posted on 02/09/2004 9:38:10 PM PST by luckydevi
One of the biggest beefs that liberals have against conservatives is that the latter are reflexively pro-business. That is, whatever the business community wants, conservatives will bend over backward to give them. This is untrue for principled conservatives. But, sadly, the Bush administration and the Republican Congress keep giving liberals ample reason to believe that the stereotype is fact.
Principled conservatives believe in the free market. While this may seem to equate with a pro-business viewpoint, in fact it often does not. The last thing most businessmen want is a free market, where they must compete, slash prices, continuously innovate, suffer narrow profit margins and live constantly on the edge of bankruptcy. They would much rather have assured profits, monopoly positions, price supports, trade protection and the other trappings of a corporate welfare state.
The great economist Milton Friedman explains that the dichotomy results from the fact that the business community necessarily is made up of existing businesses. By definition, therefore, it does not include those that have yet to be formed. Moreover, the business community is comprised of large businesses with significant political clout and many times more small businesses that individually have no political influence whatsoever.
Big businesses are much more inclined to support governmental solutions to the problems they face because they have the muscle to get them. Government bailouts and trade protection are seldom, if ever, granted to small businesses, only to big ones with high profiles and many employees. It is doubtful that the Bush administration would impose tariffs, as it did for the steel industry, on an industry comprised of many small firms instead of a few large ones.
Consequently, those who expect big businesses to support the free market are constantly betrayed. Big businesses are even known to support tax and regulatory policies that harm their own industries -- provided that they could get some loophole for themselves so that their competitors are hurt worse. That gives them a relative advantage, which allows them to increase their market share.
Therefore, those who support the free market and truly want to help consumers often must labor alone and battle big corporate interests. In the words of Friedman: "We cannot expect existing businesses to promote legislation that would harm them. It is up to the rest of us to promote the public interest by fostering competition across the board and to recognize that being pro-free enterprise may sometimes require that we be anti-existing business."
George W. Bush is not a movement conservative, as Ronald Reagan was. I doubt seriously if he even knows the names of more than a small handful of conservative intellectuals and has read none of their work. The same can be said of almost all corporate executives. But without some grounding in the intellectual tradition of the conservative movement, it is very easy to assume that the conservative position and the business position are one and the same.
The worst example of subverting conservatism to aid business is the recently enacted Medicare drug benefit, which the Bush administration rammed through Congress with unprecedented pressure. This legislation will cost trillions of dollars. A key reason for the high cost is that it applies to all elderly, including those who already have drug coverage from their employers or private insurance. It would have cost a fraction as much to aid only those without drug coverage.
The incredibly more expensive option was chosen exclusively to benefit big businesses. The universal option justified the inclusion of large business subsidies in the legislation in order to keep companies from simply dropping their retiree drug coverage and dumping it all on the taxpayer. Some large companies are anticipating hundreds of millions of dollars from the federal government in coming years -- funds that go straight to their bottom lines because it relieves them of a liability they already have.
A Feb. 3 report in The Wall Street Journal notes that Delphi, an auto parts manufacturer, expects to reduce its future retiree health care costs by $500 million as a result of the drug legislation. And it has only 14,000 retirees and dependents to cover. Much bigger companies like General Motors and Lucent Technologies will save vastly more. The former has 440,000 retirees and dependents to cover, and the latter has 240,000.
I predict that when the federal government starts mailing checks for tens of millions of dollars to big corporations to subsidize them for keeping health coverage they have already promised their retirees, the excrement will hit the fan. It will be similar to the situation in 1982 when businesses could, in effect, sell their operating losses to give tax savings to other companies. The provision in the 1981 tax law allowing this was repealed almost immediately after a massive outcry.
Just worth repeating.
So true, and it should be noted that all of our net job growth for the past few decades has come from small and new businesses. GWB is lucky that his second tax cut ended up being a fairly good one. He's apparently clueless on economic matters, as his economic speeches indicated during the worst of our "recession." I doubt if his luck can hold out for another five years, especially with all the recent government growth.
It should also be noted that Treasury Secretary John Snow came from the Business Roundtable, an exclusive lobby group for only the largest businesses, which routinely endorses big government policies.
Historically, the stock market actually does better under Rat presidents. As noted, Reagan was the exception.
You're right, and I bet GWB won't be appointing Bruce Bartlett to any comfy federal jobs either.
A pure "free market" is impossible, it's a theory.
But the closer to the 'free market' ideal you can get, the better.
Y'see, free trade is a system. When countries pass laws that manipulate the market, there are costs. The 'invisible hand' will slap them.
When countries do pass rules that restrict or favor various market segments, they will pay a price for it. First, in bad choices by their govt, which will mean that their industries still can't compete, in the long run.
For example, I'd argue that this shift of low-skilled jobs off-shore is actually working in our best interest. We're going thru our pain early, and are being forced to find alternative employment/production.
Because the bottom line is this -- these jobs will be fully automated within a decade. These jobs will go away entirely. China will, within a relatively short time, find that they have invested heavily in a buggy-whip industry.
And when they're just beginning to deal with that, we'll have already moved on.
The irrelevant buggy whip analogy. Would someone tell the dopes at Cato to stop screaming buggy whip everytime we lose jobs. It is not buggy whip making which is being offshored but our tech jobs as well as manufacturing jobs.
The "tech" jobs being off-shored successfully are things like "call center" stuff, not really a tech job at all. And yes, I predict that will be fully automated within a relatively short time. It's already underway, in fact.
The attempts to off-shore more complex work, like software design, has been an abject failure (that's the industry I'm in). It is a fad that will not last.
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