The Value of Governmental Regulation

Government regulation is often claimed by rightwingers and advocates of free-markets and capitalism as a Bad Thing.  

Well I for one am tired of, as a perfect counterexample, unsafe food.  People don't have time to individually research every food item they wish to purchase.  If they did so, it would amount to multiplication of work--the everyone-reinventing-the-wheel-effect, if you will.  

It would be far more efficient for one governmental agency to perform each task once for everyone.  

Such tasks used to be undertaken by the FDA, but since Republicans have been in power, installing political ideologues instead of experts in the field throughout government, we're living the results of numerous and ongoing health issues involving food in America (even pet food).  (Of course the deregulatory result of dangerous products is far from limited to only food.)

What are the "Two Americas"?

John Edwards is often derided about his "Two Americas" conceptualization--it sounds dualistic and unrealistic, as there's really a whole range comprising the distribution of wealth in America.  But it's really not too difficult to define exactly what the distinction could otherwise be.

It's basically a capitalist arrangement: there's the working class that produces the wealth, and there's the ownership class who reaps the rewards. (Edwards has defined it in similar terms--but is there a clearer distinction?)

Obviously, one America is the working class, who really have no choice but to work to earn a living (most want to limit risk-taking because they want to care for their family or be responsible for themselves in some other way, so "free enterprise doesn't directly serve the interests of responsible people in the economy).

Since capitalism requires unemployment to keep the price of wealth down (forcing labor competition--thus driving down wages, thus driving up profits for parasitic shareholders, comprising a race-to-the-bottom feedback loop), I usually include the unemployed among the working class element of production, since usually the unemployed are thereby forced to make some of the greatest sacrifice.

The other America then, by this definition, is the investor class: merely owning stock contributes zero to the production of (or decrease in) wealth for any particular business.  For example, I can purchase shares (such a transaction is an equal value-for-value trade, apart from speculation) of a company without ever even knowing the name of the particular business or anything about it at all; yet I can still take profit from it via merely owning share while contributing zero to any production of wealth.  Yet stocks are invariably the primary means of wealth for the wealthiest.  This is the other America.

There used to be a whole range in between these "two Americas"--the great middle class--but guys like FDR are long gone.

The good news over the long run is this arrangement is, for obvious reasons, unsustainable.  So maybe we're due for some modern versions of FDR.

"Democrats Want to Punish Achievement"

I'm watching Rudy Giuliani on a C-SPAN broadcasted stump speech, using the same old conservative propaganda canards as have been used by neocons, Newt Gingrich, the Heritage Foundation, Limbaugh et.al., even before it was actually foisted upon Americans and the world with full force for 6 years as Giuliani's party dominated all three branches of government.  Those not so objective might have needed to see it play out in the form of the richest Americans increasing their wealth at a faster and faster rate while working Americans and those sacrificed at the bottom saw, once again, very little gain, and by some measures severe losses.  Many of us didn't need to go through that to be aware of the results of conservative Republican ideology.

It's amazing he could find enough people to surround him around this fire-side chat-style stump speech who still believe these canards.

It's as if the last seven years never happened.

One of the canards Giuliani began his whole schtick with was "Democrats want to punish achievement" and so on, and that he "believes in empowering people, not government."

How many times have we heard George W. Bush speak identical lines?

The fact is, conservative ideology punishes achievement by rewarding parasitic investors and the already-rich generally over the working people and creatives who actually produce our nation's wealth.  

Wealth is produced by productivity and creativity, not by being purchased via investment.  The wealthiest gain the most of their wealth via stocks, via siphoning off the productive efforts of working people.  

Being wealthy enough to simply siphon further wealth off of the industrious is hardly the "achievement" Giuliani wants people to think it is.

The bulk of the work Republicans engage in is in continuously rigging new ways to transfer wealth from its producers to the wealthy.  Most of the rest of their time is spent trying to hide this fact.

It's very sad that Giuliani and his ilk can continue to try to fool Americans that the opposite is true, and sadder still that there are actually still people around still fooled by it, and willing to go another -year presidential round of transferring hard-earned wealth from working people to the wealthy yet again, including further shifting of the tax burden from wealth to work yet again.

"Pro-Growth Economics"

Pro-growth economics is the the phrase Republicans--especially the Bush administration--like to use to describe their policy of tax cutting--mainly and disproportionately for the wealthiest Americans, implying that doing so grows the economy. This is a lie utilized to continue to expand the transfer of wealth to the richest.

The reason it's a lie is the only way an economy grows is via production. All wealth is produced by labor: productivity and creativity in the form of goods or services. (None is produced via investment, as investment only represents labor in some form, which is why investment return income is purely parasitic.)

Production is usually measured in terms of GDP, but GDP calculations take into account investment returns, etc. so it's not a clear picture of total value.

Taxes can be raised, lowered, investment can be private or via government spending, etc.; none of it affects growth. Government spending, for example, is spent into the exact same economy private investment is. Private contractors receive business; welfare recipients spend into the same economy and the recipient businesses benefit--it's not cash burned or buried in the backyard. Market feedback functions the same regardless.

"Big government" fear-mongering, claims that government institutions don't compete with private entities, and the berating of public funding and bureaucracy is just that; designed to fool the public into going along with the transfer of money into the accounts of the richest.

"Tax Cuts Generate Greater Revenues"

It used to be there were two competing philosophies in politics: tax-and-spend, or cut taxes-and-cut spending.  Then Reagan and the neocons came along and started spreading the idea that cutting taxes on the rich actually brings in greater revenues.

The idea is, cutting taxes for the rich spurs economic growth.  

Republicans claim that, since they cut taxes (of course they always neglect to mention their "tax cuts" always disproportionately go to the richest) in 2001 and 2003, since revenues have gone, up and, employing the post hoc, ergo propter hoc fallacy, they give credit to the cuts for the revenues, instead of crediting the source of increased productivity--and thus revenues: American workers (not the investor class beneficiaries of Republican tax cuts and record deficits).  

Nowadays right-wing pundits are even spreading the idea that tax cuts generate greater revenues has been proven "over and over."

Of course no statistical analysis proves that;  nor is it indicated.  The main reason it's not is, it's illogical to think continually cutting can continually bring in greater revenues over time.  How is it even a revenue if you keep giving it back--in addition to still more cuts to increase revenues, in other words?  It's an impossibility.

(Apart from that, there's no way to separate whether tax cutting or government spending spurs how much economic growth.  Which was it during the Reagan era?)

Still lately we keep hearing conservatives again talking about the necessity of cutting government spending.  But if tax cutting brings in greater and greater revenues, why the need to cut spending?  

We either need to cut spending, they should say, or we just need to continue cutting taxes for the rich, and apply the increased revenues until government excesses are paid for.

But the fact is, cutting taxes doesn't increase revenues, and won't work.

Republicans really need to figure out just what it is they believe.

Or we need to let them know we're not falling for that one anymore.