On the Contrary

Yes I read both the “Fountainhead” and “Atlas Shrugged” and cheered for her chief protagonists, Howard Roark and John Gault, and felt the requisite amount of moral outrage against the rules of government that were hindering the great plans of these industrialists and engineers, and cheered for the individual freedoms that would allow these characters to build a colossal world.  But it was a work of fiction and it failed to recognize the realities of our world, one of which is that without the equalizing hand of government, many talented and gifted people would never get a chance to rise to the heights of greatness.

Her view of government was that its primary purpose is to protect individual rights including property rights.  But when you looked closely at this philosophy, it protected the individual rights of the rich and connected, not the rights of the poor and the average citizen to a good education, healthcare, or a decent wage.  These kinds of rights intruded on the rights of her fictional characters to fully express their individualism.  Today her idea of laissez-faire capitalism has coming crashing down around our heads.  It turns out that those “Masters of the Universe”, being free to pursue ever more wealth, simply robbed the rest of us and bankrupted our economy while they lined their pockets.  Even Allen Greenspan, the great guru of this line of thought, finally admitted he had made a mistake.  This failed economy is what Republican economic philosophy has brought us.

And it has worked so well.  From The Bill Moyers’ Journal, Bill reported:

“Or this: the 30-nation Organization for Economic Co-operation and Development – or OECD – is out this week with a new report on global gaps between rich and poor. Guess which great industrial nation had the fourth highest inequality in incomes – behind Mexico, Turkey and Portugal? Right. Us.”

Or said another way, wealth is being spread around, but to only a very few wealthy and it is hurting our economy.  The New York Times, in a lengthy editorial endorsing Barack Obama for President, noted:

“The American financial system is the victim of decades of Republican deregulatory and anti-tax policies. Those ideas have been proved wrong at an unfathomable price, but Mr. McCain — a self-proclaimed “foot soldier in the Reagan revolution” — is still a believer.”

But they missed an even more important point about the reality of Republican economic philosophy, which was reported by Mr. James K. Galbraith on the same Bill Moyers show:

“What I mean is the people who took over the government were not interested in reducing the government and having a small government, the conservative principle. They were interested in using these great institutions for private benefit, to place them in the control of their friends and to put them to the use of their clients. They wanted to privatize Social Security. They created a Medicare drug benefit in such a way as to create the maximum profit for pharmaceutical companies.”

It is not just that government should not impede business, but that it no longer represents the citizens, but corporations and then works to favor them over the citizens.  This is the true impact of Reaganism and the Republican revolution.  It is centralizing wealth among a few and destroying our economy.

So with the recent events, you would think that we have learned our lesson but I am not so sure.  Note that Mr. Paulson and President Bush talk about these “temporary” measures we are taking and emphasis is on temporary.  Most Republicans, I believe, think this is just a bump in the road on the way to restoring the Republican economic ideal.  “Some people got greedy, but as soon as we can restore the markets, we can return to business as usual.”  How else do you explain John McCain’s economic proposals?

What I think you are going to hear is the call for a return to the basics of Ronald Reagan.  Except if anybody was paying attention there were no basics.  Andrew Bacevich, in his thought provoking book, “The Limits of Power”, notes:

“He (Ronald Reagan) vowed to put America’s economic house in order.  “you and I, as individuals, can, by borrowing, live beyond our means, think that collectively, as a nation, we’re not bound by the same Limitation?”  Reagan reiterated an oft-made promise “to check and reverse the growth of government.”  He would do none of these things.  In each case, in fact, he did just the reverse.  During the Carter years, the federal deficit had averaged $54.5 billion annually.  During the Reagan era, deficits skyrocketed, averaging $210.6 billion over the course of Reagan’s two terms in office.  Overall federal spending nearly doubled, from $590.9 billion in 1980 to $1.14 trillion in 1989.  The federal government did not shrink.  It grew, the bureaucracy swelling by nearly 5 percent while Reagan occupied the White House.”

The point is, it has never worked and now we are facing new challenges that few of us understand.  Americans think in clichés and proverbs and do not deeply examine them.  After almost 30 years we are buried in conservative economic conventional wisdom, which we have seen, is failing us miserably.  Taxes aren’t necessarily bad if they pay for the things we need, and they aren’t too burdensome.  Creating a climate for the rich to get richer does not lead to an increased standard of living for all of us.  And of course, government is not necessarily the problem.

The future we face is going to require government to be a major player in restarting our economy and then making the investments in our citizens and our infrastructure to prepare us for a vibrant economy in the future.  Socialism is not bad if it means access to education for everyone, reliable and affordable healthcare, and good transportation systems so that goods and services can move freely.  The fight is going to be with the old guard who will want to reign in government spending and limit its ability to pull us out of our mounting economic crisis and to invest in our future.  For the near term, deficits don’t matter.  We have to develop a plan led by government to put our people back to work, keep them in their homes, and increase their ability to compete in the 21st century.  To get there we will have to jettison conservative economic philosophy and the Republicans who have championed it.