Monday, November 7, 2011

Somebody Needs To Tell Right-Wingers Like Palin: The Free Market Is A Myth

By Manifesto Joe

What got me thinking about this was the cosmic fool Sarah Palin's recent pronouncements, to a Republican crowd in Florida, about the Occupy protesters.

This fool called the Occupy protesters misguided, in that they are supposed to be just more people seeking a bailout, more people who want to help themselves to other people's money, rather than being what she would prefer -- an Astroturf movement directing their rage at Washington politicians, i.e. Democrats.

Here's a link to a story on this.

According to this dipstick, the protesters shouldn't be blaming "the free market," or "job creators." They should be blaming Obama, Pelosi, et al, for the current morass.

Her imbecilic pronouncements embody all that is delusional about right-wing thinking in America today, and also in many generations past.

What "free market"?

Let's get into this point by point. In the wholesale grocery business, there's a thing called "slotting allowances," through which producers of a food product pay supermarket chains to get more prominent display on the shelves and aisles, etc., for their products. It's common knowledge among those who work in that industry.

It's a sort of legal payola, so that a dominant producer -- let's say, Campbell's soup -- can get much more prominent promotion on any grocery aisle than any of their competitors. Not surprisingly, Campbell's has a very impregnable oligopoly in U.S. soup sales. They have competitors, but they are largely ineffectual. Once an outfit like that gets on top, just try knocking them off.

Tax abatements

In the part of Texas where I live, this is a racket par excellence. The companies getting tax breaks at the local level read like a who's who of area corporations: Bell Helicopter, Radio Shack, General Motors, General Electric, Alcon and In-N-Out Burger. That's just a few.

The game is simple. The local yokels offer tax abatements to corporations to locate in said area. The corporations get competing offers from several locales. If one bunch of yokels doesn't offer a sweeter deal, well, they can just do legal blackmail and say, we'll just locate someplace that will give us MORE, and we'll take all the jobs there! All of them!! Booohooohooohahahaha!

And, guess what: THEY GET IT. ALL OF IT.

And you, John Q. Taxpayer, pay more in local property and sales taxes so that these corporate scofflaws can pay less. And they hire you at minimum wage or little more, and say that this has been their good deed as job creators!

What is the business of lobbyists?

This is something that renders notions of a "free market" nonsense. Or at least it should.

What do lobbyists do for a living? They are in places like Washington and Austin to influence public policy, and in such a way that will help maximize profits for their employers. Sometimes they don't even do it in a subtle way. Twentysomething years ago, chicken magnate Bo Pilgrim created quite a stir in Austin when he showed up passing out checks on the floor of the Texas Senate. At least most of the people on the make are more subtle than that.

Tax breaks, 2011-style

Recent studies have revealed that about two-thirds of U.S. corporations pay no federal income tax. I mean, nothing, zilch, nada. The list reads, again, like a who's who of giant corporations -- ExxonMobil and General Electric come to mind. If someone wants to challenge me on this, the data are out there, and I'll be quite happy to respond.

How have they been able to do this? Short answer -- LOBBYISTS. They employ the very best, and they have been getting results over the past 25 years that have been little short of unbelievable. They own a lot of Washington politicians (please take note that these are just the front people, Sarah Palin) and can make them write a lot of lucrative things into the tax code.

Capitalism's internal contradictions

As a young man, trying to make my way in newspaper journalism, I was interviewed by a typical medium-small publisher, a silly man who had made his way up from being a sports woof-woof. He told me that, "We're all for competition. But when we get a competitor, we do our best to crush them, to run them out of business."

And, of course, they had been frequently successful at doing just that. And obviously, that's something that would be expected of them.

But it points out the basic problem that the entire capitalist system faces sooner or later: Capitalism thrives on competition, yet every capitalist wants a monopoly.

They say they are for competition, but they ultimately want to eliminate competition. And, sadly, they will resort to whatever hideous means are necessary to do just that.

Adam Smith wasn't entirely on their side

Smith was writing in a very different time and place, but there are some selections from his writing that show a very different Smith from the one that the right wing lionizes.

"Our merchants and master manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods at home and abroad. They say nothing concerning the bad effects of their own gains. They complain only of those of other people."

Where is THAT Adam Smith when you need him?

Quotes from the "GOP," including one from a current presidential hopeful

In 1993, President Bill Clinton's economic plan raised the marginal tax rate on wealthy individuals, and not by a huge amount, by rich folks' standards. I was a taxpayer back then, middle-class, and I noticed little difference in my tax bill. The increase mostly hit the very rich. By the way, it passed in the House by ONE vote. Clinton had a strong Democratic majority in the House, but he couldn't even get all the Democrats to vote for it.

Let's see what Republicans had to say about this:

"We are buying a one-way ticket to a recession." -- Sen. Phil Gramm, R-Texas, 1993. (Gramm, by the way, was an economics professor at Texas A&M before he began his lucrative political career.)

"It'll flatten the economy." -- Sen. William Roth, R-Delaware, 1993. (This is the dude for whom the Roth IRA is named.)

"I believe this will lead to a recession next year. This is the Democrat machine's recession, and each one of them will be held personally accountable." -- U.S. Rep. Newt Gingrich, 1993, soon to be House speaker. Well, Newt, we did eventually have a recession. You were just 14 or 15 years off in your prediction.

Of course, you the reader remember quite well what happened during the '90s, after the Clinton economic plan passed by one vote. The U.S. economy collapsed. The national debt quadrupled. Tens of millions of people were thrown out of work.

Oh, wait -- none of that happened, did it? Quite the opposite, if I remember right. I guess I finally awakened from that long national nightmare of peace and prosperity.

How many times do the supply-siders have to be proved wrong?

Apparently it's going to take at least one more time. The polls show a very disheartening trend among many Americans toward delusional nostalgia. One poll indicated that, when asked which past American president people would want back to help guide us through the current crisis, 36% said Ronald Reagan! And only 29% said FDR!

Americans, don't get stuck on stupid. Reagan? You mean the guy who cut the marginal tax rate on rich people down to 28%, and tripled the national debt? Hell, he's one of the major reasons we're in this predicament now!

Part II is coming: The Myth Of The Free Market

Manifesto Joe Is An Underground Writer Living In Texas.

1 comment:

Anonymous said...

Here's one of those Adam Smith quotes that you'll never see on Fox News or from any Smith-worshipping "free market" economist:

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."