Capitalism's Achilles' Heel

Now, in the past I've gone back and forth with this person or another on government vs. business. If you've been reading here a while, you probably know I'm a little more pro-central government on many topics than some of my friends.

There are reasons for that. One of which is my own study of history. I know how often things only got worse and worse until the public, which couldn't get business to solve the problem, pushed the federal government to make important changes. Sometimes labor unions helped with this; sometimes they hindered. But, in the end, real changes in many important topics never really took off until the central government of this country forced the changes.

Things like food safety, workplace safety, environmental pollution and clean up, discrimination and child/adult labor used to mean horrific conditions for children, for people, for minorities, for health in general. Go back even a hundred years, and the world is a far different place as far as all these topics are concerned. I stress the federal government because, in many cases, local regulations were in place in pockets here and there to address these. Business just moved somewhere where they weren't in force and went on, business as usual, with no repercussions crossing state lines.

And this is what's wrong with trusting the market to do it. People talk about people getting bad service or a product and going elsewhere. That the market or competition will make it all better.

All well and good if that were entirely true. Truth is, people don't buy products just because of quality, per se, or just price or any reason. In fact, the reality of the product isn't what brings customers - it's the perception of the the quality, price, availability, convenience, etc. Reality doesn't change; perception is malleable. People who believe that a product is better made or hard to find or a really good price will often buy without checking it out. People who care about jobs in America might buy a GM vehicle made in Ottowa rather than a Toyota made in San Antonio. Really, "American" products could be made 'most anywhere.

It's the perception that counts.

That's true for other things, too. We convince ourselves that big business is competing against each other and we come out ahead as a result. Amazing, isn't it, that all the oil companies, for instance, have price hikes at holidays or are within a cent or two of each other's prices. In the finance industry, a few money men have so much influence, so much power, and are using tactics so obscure, we can only go on faith. When the market is driven by perception, that's a heady brew and will do Mainstreet America no good.

I thought about this while reading an editorial this morning in the NYT by an ex-Goldman employee explaining how the worst transgressor in the huge Goldman swindle/financial fiasco was the federal government and everyone else, including banks that lost their shirt, was "at best, a willing accomplice. " Goldman, though masterminding the deal and priming the pump for making out like a bandit, is considered to be on the same level with the victim banks who didn't do their homework. Actually, the editorial is a masterpiece of misdirection and bull$hit arguments on why people consciously out to swindle and steal billions weren't at fault.

She makes the argument that the government was the MOST at fault because they didn't stop 'em. In fact, I found this bit amazingly important and the key to my point here:

Yet, in the end, it comes down to this: Goldman Sachs, ACA Capital, IKB Deutsche Industriebank and even the rating agencies never had any duty to protect us from their greed. There was one entity that did — our government.

Now, I'm not excusing the massive deregulation that's been dismantling financial oversight for the past few decades. Or saying the government doesn't have plenty to answer for. They do, but, as we bitch and moan at the government "letting" unemployment get so high, etc., we might want to bear in mind that these are often the same folks bitching and moaning about the government having too much interference with business. Folks, you can't have it both ways.

Truth is, business will continue to ream the public backwards and forwards without any consideration for anything but their own bottom line, using every loophole, every geographical and legal advantage, every advertising distortion possible. We know, from experience, that expecting them to police themselves or to have market forces keep them honest is bust. It's been proven time and time again. And, when we catch them with their hands in the cookie jar, they'll say it's the government's fault that they were thieves and liars.

Meanwhile, they'll pump money into "grass-roots" keep-government-small movements and lobby/pay-off our elected officials so they can keep on doing what they have been doing in the name of the free market.

They're right. They're under no obligation to be ethical and honest unless we make them with laws - as we've done before. Laissez-faire is a proven loser. Regulation is not.

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Confederacy vs. Federacy

In case you couldn't figure this out, this post represents my point of view rather than fact.

I've been butting heads, as I frequently do with Relax Max, on the topic of local control (state's rights) vs. Federal. I tend to prefer federal control/regulation/standards. RM, as usual, thinks I'm ill-informed and idealistic.

You probably won't be surprised to find I think of it differently.

But he did me the favor of making me think why I feel the way I do. See, I felt that history wasn't kind to groups of small city-states and independent countries working in a close alliance. You know what? I still think it. In fact, every collection of small independent allied countries that did not have a strong central government that I could think of has either collapsed or turned on itself in an ugly way or has grown to have a stronger central government. But, if you can think of an exception, let me know.

I know the United States, before it was a federal entity, was a confederacy that failed pretty miserably.

So what? Just because they haven't worked in the past doesn't mean they can't, right?

So then I thought about it. Why doesn't it work? What is it about close community or local government that make it a bad bet in a larger community?

I'm sure there are many people who have written their thesis on that particular topic and, hell, I don't claim to be a political scientist...

But.

I thought for a minute on what types of people tend to be rabidly attached to the notion of local control, that spurn the notion of broad brush standards or centralized regulation. They tend to talk about freedom and commerce and tradition and whatnot and I'll get to what I think of that. But, looking past the hype, what is it they're really looking for? Why are they so passionate?

Well, to my way of thinking, they tend to fall into two categories. One are the organizations that have a vested interest in local regulation instead of centralized such as insurance companies who like the advantages of setting up business in one state that might have lax regulation and then doing business elsewhere. Having a hodgepodge of laws, tax schemes, regulations and tariffs works to the advantage of those who like to take advantage if you know what I mean. That can also apply to criminals. Just sayin'.

The other groups, the general public that tends to cry out for local control, state's rights, etc. tend to be those that seem to want that control to facilitate oppressing subgroups within their midst. Now, before you start squawking, think about it.

Say the Civil War was all about state's rights. What did they want the right to do? Keep a minority oppressed, maintain a rather antiquated hierarchy (and social structure that was short-sighted, doomed to failure and only benefited a very small minority) and safeguard a number of prejudices. They used "freedom" as their call, but what they really wanted was the freedom to oppress others.

It's been 150 years, folks, but the story hasn't changed. The ones that want local control, state's rights, etc. also tend to be the ones who want the "freedom" to have "marriage preserved" by keeping gays from having it, or want the "freedom" to "maintain moral standards" by prohibiting abortion (and a woman's right to choose) the like or perhaps the "freedom" to rewrite history to ignore key historical figures or their well-documented motivations for other slanted views, like Texas.

Truth is, when you have a larger and more diverse pool that sets the standards, it's harder, not easier, to oppress minorities, to distort the past, to impose rules based on moral, or rather religious, views. If everyone's playing by the same rules, it's harder to treat people differently just because they're "different." It's also harder to use the rules to your advantage to circumvent them.

It's interesting, despite the choruses of "freedom" that go with the local control advocates, that you rarely hear that same group talking about becoming more tolerant or open or treating everyone on the same level. If they talk about tolerance, it tends to be tolerance for their "right" to take choices from others, their right to be intolerant.

You know what? I don't think that's a coincidence. How's that for some confederate history?

Oh, and RM, don't respond with a rant. Better provide counterexamples from your superior knowledge of history. That will at least get my attention.

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