Monday, April 19, 2010

Follow Up: Fake Populism

Shortly after writing my Goldman Sachs "conspiracy theory", it occurred to me that I left out a crucial - and rather irritating - side note: President Obama's disingenuous populist act regarding big business and the completely fictitious oppositional relationship he has with it.

Obama is out there stumping this faux-populist message, pretending that the financial industry doesn't want the regulations - when clearly, the big players definitely do! Darlene Superville of the AP reports:
"Obama criticized financial industry interests for opposing the proposed regulations and for waging a "relentless campaign to thwart even basic, commonsense rules.""
In what world is this the truth?

I've already explained precisely why Goldman Sachs benefits from the new legislation, and major news sources - even the most blatantly pro-Obama or pro-state ones - have already widely reported on Goldman Sachs' support for it.

Personally, I get really sick of this myth that big business hates these regulations. It's nothing more than a great narrative that's been hammered into people's minds by government aided by not only the news media, but entertainment - film, television & radio - for decades as well. The lesson everyone, everywhere, needs to learn is that most corporations love corporatism. Any way a business can use the law to make life more difficult for their competitors, and any time a business can secure special privileges from the government which no one else has (see: Blue Cross/Blue Shield, among many others), they are going to be in favor of those "regulations".

Ironically, most small businesses do hate big government regulations like this because they most often severely hamper their ability to compete and strongly favor the existing major players. But aren't the "small" businesses - the ones that employ most people in America, and the ones that aren't filled with multi-millionaire executives and which have billionaire owners; the ones that have no connection to the powerful politicians in Washington - the ones that Obama is claiming to be protecting in all this?  

As usual however, claims & reality aren't even in the same ballpark.

So I leave you with a personal favorite quote by Milton Friedman in 1978:
"Business corporations in general are not defenders of free enterprise. On the contrary, they are one of the chief sources of danger....Every businessman is in favor of freedom for everybody else, but when it comes to himself that's a different question. We have to have that tariff to protect us against competition from abroad. We have to have that special provision in the tax code. We have to have that subsidy."
He was, is, and probably will always be correct on this point.  And there is no better argument I can think of for why the power of the state always needs to be extremely limited in matters of the economy.  As long as there is power to broker & influence, there will always be those well-connected folks who are pulling the strings.

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