According to the Wall Street
Journal, the capital gains
tax cuts Obama promised for small business now seem to be missing
in action, both from the house and senate versions of the stimulus
package. ( http://online.wsj.com/video/the-missing-obama-tax-cut/B36FF341-36BF-4275-B78F-1A5B0A95918B.html )
. Surprising? Not really. This sort
of bait and switch is standard procedure on both sides of the
political spectrum. But more importantly, this
is consistent with a recurring theme, a theme
which maintains that it's not so important what happens to all the
little people - it's the big fellas that count. In it's purest
form, it goes something like this;
"What's good for big business is good for everyone else."
I recall hearing my 8 year old tell my
6 year old something like
that once, where she was "big business" and the 6 year old was
"everyone else". I'm sure there's some truth to it - I'm
just not too sure how well it reconciles with values like
democracy and freedom. If history is any guide, then we can
expect today's "stimulus packages" to reconcile poorly with
these kinds of values, and reconcile much better with the
concept of oligarchy. And once
again, what better bit of history to look at than the
New Deal, since there have been frequent, optimistic allusions to
it lately. We can start by picking on Social Security
again: Besides being backed by bonds connected
to ballooning fiscal deficits, SS also transfers wealth to
the very wealthy due to the use of income caps;
Workers must pay 12.4%, including a 6.2% employer
contribution, on their wages below the Social Security Wage Base
($102,000 in 2008), but no tax on income in excess of this amount.
Therefore, high earners pay a lower percentage of their total income
because of the income caps;
Why not just tax everyone
evenly here? (And how
nice, by the way, for SS to provide just enough financial support for
the disabled to maintain a pulse, until they are ready to get back
to work ... ) So, so progressive.
Similarly, the National
Industrial Recovery Act in 1933
hurt smaller businesses. The NRA forced businesses to pay higher
wages and shortened the work week. This sounds great.
Everyone would like to work fewer hours and make better money - and
rightly so. But if markets were right to begin with (ie;
not dominated by a few, heavily subsidized giants) employers
would not have the upper hand in the first place. They would be
subject to market discipline just like everyone else. There would
be many employers of many different sizes. If employees
didn't like their employers, they could move on. There
would be competition for labor - as it should be - not just
competition for jobs. But a real market, where there's real
competition for labor, is precisely what the big fellas
don't want. So the Recovery Act passed, which
once again hurt the more vulnerable, smaller businesses
- the ones that couldn't afford to pay the higher wages and lose
man hours. Even Walter Lippmann, who earlier had supported The
New Deal, stated his concern about the effects of the National Recovery
Act was having on smaller businesses;
The National
Recovery Act was
later overturned by The Supreme Court in May,1935. It
should never have been enacted in the first place. Nor should the
Agriculture Adjustment Act, which also hurt small
business. The AAA ostensibly sought to help
farmers by raising food prices. Its means included
surplus reduction via crop and livestock destruction, increased
regulation and and direct payment to farmers not to
grow. The Secretary of Agriculture received exclusive power
to license food processors, greatly expanding the
government's direct control over the nation's
farming. This benefited the large farmers, but not the
smaller ones;
Large farms benefited from the
AAA policy of reducing surpluses, having "gross farm income increase by
50% during the first three years of the New Deal".This was
achieved because large landowners would evict tenant farmers and
sharecroppers in order to keep them from farming their leased acreage;
the landowner would then receive the payment for not farming the land. Futhermore, those same land owners, having forced out
some of the competition, would then use those displaced farmers as
cheap farm labor. http://en.wikipedia.org/wiki/Agricultural_Adjustment_Act
There have to be better ways
to help out farmers than
destroying the fruits of their labor, and paying them to be
idle. Why not enact policy that was supportive
of the small and mid-sized, often family run, farms that used
superior, pastoral methods instead of the scale
obsessed industrial methods of the behemoths? Wouldn't less
emphasis on scale and more on quality and nutrition have been just
what the doctor ordered? Better food produced in more appropriate
quantities in a much more diverse, competitive, efficient
market. But the big boys (the ones playing golf with their
congressmen on weekends?) weren't having any of it. The AAA
was passed, and the result was predictable: squeezing out
the smaller farmers and giving more market share to the
heavily subsidized giants. No surprises here.
These programs of the New Deal, and
others, hurt the
average American in different ways, and helped big business in
different ways, not the least of which was maintaining a class
society. Such social stratification ensures a
consistent labor pool of citizens with working class status.
This isn't just an incidental side effect, it's one of
the central objectives of public policy, and a direct result of
the lobbying efforts of big business. We've also seen
this recently in Japan, where free market reforms that we're
supposed to stimulate the economy resulted in widening the income gap
and the number of "working poor" increased by 40% between 2004 and
2006. (http://www.sovereignsociety.com/2009Archives1stHalf/012909NetCafeRefugeesampGrassRootsCommu/tabid/5238/Default.aspx -
under "The Crab Factory Ship")
So our fledgling
innovators continue competing with the
likes of the Walmart next door - transnationals with
budgets bigger than many countries - which take US jobs
offshore to exploit sweat shop labor and avoid paying taxes. The
massive government subsidies, no bid contracts, bailouts, tax credits,
sanctions and embargoes that ensure the dominance of select corporate
activity go largely overlooked, as do the hedge funds designed to be
used exclusively by the uber wealthy, characterized by enourmous
leverage, derivative contracts, astonomical investment minimums and
favorable regulatory treatment (compliments of the New
Deal's "SEC" . . . ) that allow the elite to engage in
financial activities that are off-limits to everyone else. Any
chance these guys are the ones attending the secret
meetings? ( http://www2.whidbey.net/zipmont/revamp/council.htm )
No surprises here. After all,
don't the corporate giants with the lobbying power
usually get what they want? What's surprising is
that the bailouts have any support at all, as if - this time
- it will be different, as though - this time - there is
some kind of justice behind it, for some strange reason, as though the
cronies have changed their tune or turned over a new leaf, or as if
somehow they got ousted from power. So while our attention
is diverted by a mass media focussed in on pop culture - on
sports, hollywood, and partisan claptrap, the real
business falls into the happy hands of the unsupervised,
crony elite. The result? Trillions handed over to big
business, compliments of the common man taxpayer. Thank you very
much.
<>We've been led to believe (and become quite divided in the
process) that either the free-market is inherently evil, or that the
government is. Neither is inherently evil. Both a
competitive market - and a central government
- could work fine together if they were not being
looted. What is evil is when the two conspire to make crony
capitalism, ie; what Noam Chomsky describes as the nanny
state to protect the elite, and market discipline and tough love for
everyone else. (http://www.youtube.com/watch?v=iVDPxVy7h38)
Here is the elephant in the living room.