Economy driven by greed

Guest Columnist and Guest Columnist

It isn’t hard to find a news article criticizing the state of the economy in our current political climate. There seems to be a consensus among both liberals and conservatives that the investment bankers of AIG and other Wall Street bankers are greedy, but didn’t we already know that? Conservatives tend to cast the problem as the moral failing of a few bad apples and liberals tend to use the credit and housing crisis as an example of the catastrophic failure of deregulation. Both positions are misleading. The entire point of the market economy is to maximize profits by whatever means necessary. If greed is suddenly so horrifying to American sentiments then I think it’s time to examine how 1′ percent of our population has managed to control 30 percent of our total wealth and the richest 5 percent, lay claim to over half our nations finances. It is too hasty a judgment to define deregulation as either good or bad. There are two types of regulation, the kind that protects the people from capitalists and the kind that protects capitalists from each other. It has been demonstrated that these people will take huge risks and overextend themselves if they are confident the government will bail them out when the house of cards falls. The ‘big government’ cabal of leftists that prevents the free market from functioning properly because of their unfounded contempt for individual achievement is a myth. In reality, corporations have been receiving tax holidays and subsidies since long before the Obama administration. In many ways, legislation has become just another service for sale on the free market that only the super rich can afford. While a great deal of ‘regulation’ (I use this term loosely) is meant to reinforce the market control of existing companies and prevent things like unions, entrepreneurial upstarts and competition from smaller firms from gaining a toe hold, I am not trying to make the case that government can’t do anything right. Quite the contrary, it is the conservative-libertarian belief that government should keep its nose out of the affairs of businessmen and investors that I am arguing against. If the consumers and workers of America decide to keep the government out of the economy, then the only laws and regulations we will have are the ones that men like Martin Sullivan (disgraced ex-CEO of Citigroup) pay for. Bankruptcy law is another issue in which the conservative position requires more ‘government intervention’ than the progressive one. Under the preexisting bankruptcy law, creditors could lay claim to most of the debtors’ assets and in some cases place liens on future earnings. The new law hugely expanded the creditors’ claims on future earnings. This means government will be far more involved in bill collection in the future than it has been in the past, possibly monitoring the wages of millions of individuals in bankruptcy who still have debts to creditors. For those who worry about the negative incentives caused by taxation, it is worth noting having money deducted from paychecks to pay creditors provides the same disincentive to work. Furthermore, the ‘personal responsibility’ line is equally applicable to the creditors who approved these risky loans. If it weren’t for their collaboration with the government, they would be unable to milk debtors for every last dime their worth. In reality, both ideologies are deeply involved in creating new policies to manipulate the flow of wealth. One set of policies funnels the flow of wealth to the top of the economic food chain, and the other funnels it to the bottom. There is no small government or big government party, there is a welfare party and a warfare party (this does not mean the Democratic party has not been complicit in America’s out of control military budget and reckless aggression, simply less enthusiastic). It is time America rediscovered the long term benefits of the public sector. The profit motive is in many ways in direct conflict with efficiency and our long term interests. In the long term, an authentically populist political platform must be the basis for current and future reforms. We can not possibly hope to defeat these robber barons on their own terms, and any true gains to the establishment of a more egalitarian economy will have to come from the political realm. In the short term, we can make a point to consume less, support local businesses and establish consumer co-ops in order to decentralize the market and loosen the hold of multinationals on our economy. There is a class war going on and we’ve been losing it for quite some time. —Michael Thurau