Saturday, June 12, 2010
One of the more insidious aspects of the government takeover is how such takeovers are pitched as reforms. Of course reform traditionally applies to institutions reforming themselves or being reformed by their constituents or shareholders. The idea of government reforming the private sector smacks of unlimited authority, which is exactly what it is. And so a government that cannot reform itself, that cannot stop its out of control spending, its constant legislative corruption, its culture of pork and kickbacks, its compulsive need to appropriate power, sets out to instead take over every aspect of life within the country in the name of reform.
Can an alcoholic who can't stop drinking, teach others to be teetotalers? Can a compulsive gambler who drops 10 grand a week in Vegas, regulate the gambling habits of others? Only as an example to others of how bad things can get. But though the government cannot regulate itself, it insists that it can regulate everything outside itself. The blind leading the blind is bad enough, but what are we to make of the blind leading those who can actually see. That's what government regulation is.
But the reform pitch is part of the whole insidious premise that government is protecting the people from being exploited by acting as a referee on their behalf. It's so insidious because it's both deceptive and appealing. Most people have felt taken advantage of by corporations. And indeed we do have a legal system in order to avoid criminal exploitation. But what government refereeing does, is blur the line between the criminal and the unethical, and between the unethical and the profiteering, thereby creating a mandate to not only crackdown on criminal actions, but on acts that are unethical or just greedy.
For example, reformers may begin by exposing an insurance company forging documentation to avoid paying claims, an illegal act, to focusing on misleading claims made by insurance representatives, an unethical act, to campaigning for lower insurance rates, an area that is not illegal or unethical, but a question simply of profit. By exploiting this kind of slippery slope, entire industries have been heavily regulated, even in areas well outside of the government's purview.
The scandal generated by exposing illegal activity is used by advocates for a government takeover to regulate unethical and profiteering behavior, which they all class together as proof of malfeasance. By doing so they define both legal and illegal behavior as illegal, because it is rooted in the desire for profit-- an essentially socialist position. Going back to the muckrakers, socialists discovered that they could create an impetus for socialism by delegitimizing the profit motive, and the best way to do so was to begin by building their case around blatantly criminal activity and then move down the ladder to attacking the basic idea of capitalism itself.
The overall target was of course the free market, promising the people that government would act as their guardian, protecting them with regulation from the abuses of capitalism. The genuinely deceptive thing however, was that politicians were making the same offer to companies, promising to act as their referee to protect them from their rivals, their workers and their customers. What was actually happening was that government was inserting itself as the "referee", promising to protect the different segments of the free market from each other.
So politicians "protect" consumers from companies by price controls, while protecting companies from their competitors by creating de-facto monopolies through legislative loopholes, and then protect companies from consumers by tightly regulating what products consumers can buy. ObamaCare, which both imposes price controls and forces consumers to buy health insurance, is a typical example, in which the government as referee screws over both sides, while giving them both some seeming advantage. In reality both sides are worse off than before, and only the politicians and their camp followers gain from the regulation.
And that is how it began. Retailers were promised protection from distributors. Distributors were promised protection from manufacturers. The public was promised protection from all them. Of course this called for reams and reams of legislation. And that legislation called for more legislation. And the politicians and officials in charge of the process naturally welcomed lobbyists from various trade and consumer groups to "explain" their positions them, said explanations usually accompanied by donations and pledges of political support.
By placing itself as the referee, government had a court in which cases went on forever, while collecting "fees" from all the litigants. In Dickens' Bleak House, there is the case of Jarndyce and Jarndyce, a lawsuit involving an inheritance that has dragged on for generations, and eventually leaves nothing to the descendants who have been fighting for it, but is entirely absorbed by the judges, the lawyers and the assorted camp followers of the legal system. So too the American people are discovering that the "inheritance" of their economy is vanishing into the maw of the government that promised to get justice for them.
The fees are paid out in campaign contributions, in taxes collected to fund the expanding regulatory mechanisms and in the invisible toll added to all economic transactions by the regulations themselves. That is because any regulatory mechanism also becomes part of the system. Each regulation changes the way the free market works and the way that companies and consumers behave, as both continue to strive to gain maximum advantage for themselves. Since each regulation also adds more expenses to both sides and blocks areas of commercial competition, both sides become more creative and thus also more deceptive. But rather than making economic competition better, more regulation actually makes the competition worse. And this provides grist for the reformer's mill, who pile on more regulations, which only makes the matter worse. The next step leads to the black market, with the most regulated economies, such as the USSR, also featuring a thriving black market. Because regulations don't change human behavior, they just change the context in which it is expressed, and the strategies it employs.
By position itself as the referee, government has expanded well beyond its constitutional boundaries into socialism. And it has done so by playing on the fears of both customers and companies, promising an orderly and tightly controlled market, for the highest bidder of course. The government promises low prices and available products to customers. And then raises their taxes and gives multi-billion dollar grants to corporations, or just bails them out when those regulations help insure their failure. The result is a diminished availability of products, much higher prices when accounting for inflation, and a culture of entitlement among both companies and the public, in which both sides feel entitled to use the government to exploit the other. Which is exactly what the "referee" wants, because then it has them right where it wants them.Socialism requires simply that the majority believe that they will be better off having government dispense the work of others to them, rather than working for themselves. And the "reformers" have convinced large numbers of Americans of just that. The results can be seen in an endless assortment of consumer groups that promise us the solution to all problems is to have the government regulate every single thing that companies do, and they can be seen in companies with CEO's whose main strategies are to hire lobbyists, outsource the actual labor to China and then leave with a golden parachute on their least profitable quarter. This is what happens when people cease to believe in working for a living, and come to believe that the government is their best economic solution.
This week in the news, Senator Schumer has announced that he will investigate an airline's carry on bag fee. While the first reaction of many people may be that such a fee is repugnant, have they considered how much they'll be paying for the expanded government regulatory mechanisms. Or how much they'll paying when that airline's lobbyists agree to get rid of the fee and instead take home a bailout instead? Because there is no such thing as a free lunch. You can buy lunch or you can get it from the government. But government lunches cost about a hundred times as much. And though you may not be paying for it up front, you will pay. And your children. And their children after you.
From NY to Jerusalem,
Daniel Greenfield
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