Republicans Don't Understand Capitalism

I found this at http://www.buzzflash.com/contributors/04/11/con04501.html
And found it well worth the read.
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Republicans Don't Understand Capitalism

A BUZZFLASH READER CONTRIBUTION
by Marc McDonald

If you're a progressive, you know how tedious it can be to engage in an argument with a Republican these days. Conservatives delight in pompously rambling on about topics that they believe they understand (but are actually totally clueless about). "American values" for one thing. "Christianity" for another.

But no topic gets Republicans more passionate than "capitalism." After all, the GOP is supposed to be the party of capitalism, free markets, and unbridled free enterprise.

It's interesting, though, how little Republicans seem to know about capitalism. It's probably just as well, because if they delved into the history of capitalist theory, they'd likely have a heart attack.

Take, for example, the bible of capitalism, Adam Smith's "The Wealth of Nations." Smith wrote this book after an extended visit to Paris in the 1760s in which he met with French economic thinkers and listened to their theories about laissez faire.

Therefore, much of what we identify as "capitalism" these days originated in France, of all places. So the next time your conservative brother-in-law starts bending your ear about capitalism, free markets, and economic competition, you might point out to him that he's supporting French ideas.

This really shouldn't be surprising, though. I mean, what could be more French than George W. Bush taking a 5-week vacation?

When I hear the likes of Bush and Dick Cheney talking about capitalism and free markets, I have to laugh. Neither man would know capitalism if it ran over him on the highway.

For example, Bush was a total failure in the business world. He drove three companies he founded into the ground (despite the fact that his daddies' rich friends gave him financial backing).

Bush only became rich when his daddies' wealthy friends linked him up with a sweetheart deal: The Ballpark stadium in Arlington, Texas. The stadium was funded by taxpayers. It was hardly an example of "capitalism". In fact, it was the very definition of corporate welfare.

It's obvious that Bush knows nothing about capitalism, or what it takes to survive and prosper in the private sector. But that, of course, doesn't keep him from constantly rambling on as though he were a seasoned expert on topics like capitalism, the private sector and free markets.

It's clear that Bush's idea of "capitalism" consists of socialism for the rich, and brutal, dog-eat-dog capitalism for the rest of us. As a result, in Bush's America, U.S. corporations pocket over $300 billion a year in corporate welfare. And over 60 percent of corporations pay zero income taxes.

Meanwhile, small mom-and-pop businesses across the land are struggling to compete with the likes of corporate-welfare-collecting giants like Wal-Mart. As a result, Wal-Mart's success in crushing its smaller rivals has nothing to do with "the free market" or "capitalism."

Republicans know nothing about capitalism. And the fact that they control all the levers of power in this country at the moment is worrying for anyone who's concerned about America's economic health.

A big problem is Bush's lackadaisical attitude toward deficits. America's trade deficits and government deficits are both at unprecedented levels and are soaring into the stratosphere.

If Bush was a seasoned, experienced businessman with real-world success in the private sector, he might be alarmed at the deficits he's racking up.

People like George Soros (who have real-world experience in the dog-eat-dog capitalist jungle) ARE alarmed. They realize that America's nightmarish deficits are unsustainable. In fact, to a growing number of economic commentators, America's mammoth deficits are by far the biggest threat facing America these days.

I believe that Bush & Co. not only don't understand capitalism, but that their ignorance is responsible for an unfolding economic train wreck that will end America's dominance in the world.

One might wonder: why ISN'T Bush alarmed at America's deficits? After all, we're talking about deficits that are unprecedented in world history. We're talking about a government deficit so massive that it costs the U.S. over $300 billion a year just to service the debt interest. As author Gerald J. Swanson pointed out in his recent book, "America the Broke," our nation's total future obligation, in current dollars, now totals at least $44.2 trillion. (That's trillion, with a "T").

Actually, there's a simple reason for Bush's complacency. He's confident that other nations will always be happy to finance our debt. Republicans in general have a "don't worry, be happy" approach to this crisis.

To Republicans, it's perfectly rational to dole out billions of dollars in tax breaks for the rich, while launching two costly wars. They give little thought to where all this money is coming from. They're quite confident that the likes of China and Japan will always be happy to dole out billions to finance our deficits.

Republicans remind me of wealthy, naive, trust-fund-collecting kids who regularly jump into their BMWs and drive up to their ATM machines to withdraw money. They never give a second's thought about where that money is coming from. Actually, come to think of it, many Republicans ARE wealthy, trust-fund kids, whose parents have always showered them with money.

To those of us who actually understand capitalism, though, we have reason for alarm about America's future. We understand what it takes to run a successful business and balance our books. And we know that America's soaring deficits are simply unsustainable.

We understand that the nations that finance America's debt could get cold feet at any moment and yank the rug out from underneath the U.S. With the dollar already in steady decline, investing in the U.S. Treasury bills is an increasingly unattractive option for the likes of Japan and China these days.

Unlike Bush & Co., anyone with even a passing knowledge of capitalism understands that the U.S. dollar is headed for meltdown. And the era of U.S. economic global dominance is about to end.

People born with a silver spoon in their mouth, like & Co. and their smug wealthy supporters, are about to get a harsh dose of cold reality in the lessons of Basic Capitalism 101.

Unfortunately, it'll be the American people who pay the price for Republicans' ignorance about the fundamentals of capitalism.

Marc McDonald
Fort Worth, Texas

 

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Hmmm, so we can't blame any of it on the French?

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Ultimately G.Bush will not only lead the US to economic ruin but will bring a bout a very nasty widening (neverending) conflict that possibly may have some radioactive fallout to it as well. Blame those of you who voted republican. It was a really stupid idea!

 

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Uummmmm, much as I dislike arguing with people, I would like to ask when Adam Smith was in Japan.
As for the claim that he became enamoured of Laissez faire in Paris, the actual situation was more complex. He had already written his "theory of Moral sentiments" and lectured on justice, police, revenue and arms in the 50's in Glasgow, and it seems clear that in Glasgow in the 1750's he found the basic material that went into "the wealth of nations". He was in France as the tutor of the young Duke of Buccleugh, and whilst abroad was in touch with Quesnay, Turgot and dAlembert and Helvetius.

If i remember correctly, much of the original colonies were led by aristocrats, who liked to sit about doing nothing, moreover they didn tlike to dirty their hands with toil, and knew little about the soil. Hence it took gifts from the Indians to keep them alive. Capitalism may have been rooted in the USA, but the theoretical jsutification came out of the Scottish Enlightenment in the 18th century, which is I think part of the point of the article, though it possibly talks up the French links for rhetorical effects.

 

Hmm, interesting... Bush and his kind have sold the nation and its future generations for a quick profit. I think they understand the principle of capitalism quite well.

 

WEll, let me state quite categorically that Adam Smith the 18th century Scotsman never went to Japan. I have however got no information as to whether or not he was perturbed that the USA didnt listen to him. (Except given that he has been crowed about for years over there, someone might have, except also that these people tend to forget he was also a philosopher and moralist.)
However, I fail to see how the Japanese East Asian model of capitalism is like how Adam Smith envisaged it, seeing as how there is generally a lack of competition involved.

I am amazed by you roptimism that the USA can get back to trillion dollar surpluses and tehreby get rid of the war debt problem, given that the national debt doesnt seem to have been decreased noticeably after the Reagan years, and indeed has kept on advancing. I would similarly be interested in how you reckon the Bush tax cuts actually helped stimulate the economy, given that they went to the kind of people most likely to stash the money offshore and not use it in the USA.

 

So your a convert to the idea that theres no such thing as a truly free market?

For a slightly different view you could try this:
http://www.commondreams.org/headlines01/0523-02.htm
http://www.commondreams.org/views03/0524-01.htm


I dont also see how cutting business taxes will affect the consumer well, since the consumer will have to pay more taxes personally in order to keep on having public services and invade other countries.

Yet another view:
http://www.commondreams.org/views01/0217-05.htm
"Mr. O’ Neill’s claim that the president’s tax plan would spur invest-ment in the American economy would perhaps be more persuasive if sup-ported by evidence. For instance, where is the data that weak invest-ment is what ails American makers of cars or computers?"
"Moreover, the $1,600 in tax savings for the average American household trotted out by the Bush administration is inaccurate, notes Max Sawicky of the Economic Policy Institute. He explains that less than 11 percent of taxpayers would get that amount or more."

Your optimism with regarsd to taxes ignores the simple fact that the money needed to pay for things comes from the taxes. Sure, theres some waste, there always is, but simply cutting taxes wont make any different.

 

It depends on how you do it. If you suddenly impose a 100% tariff, and announce it beforehand, a great deal of money will leave the country and the dollar will likely drop drastically. Countries that impose tariffs and suchlike get hammered by the international money markets, which as we all know are so large that they can do severe damage to countries economies, eg in South Asia in umm, 97 wasnt it? Tarriffs on money transfers are actually quite a good idea, one called the tobin tax has been promoted by groups interested in helping developing countries, because by taxing financial transactions by even a small amount, you can help both raise money and keep the money from acting so hot and leaving the country at the slightest opportunity. Mere financial speculation tends to benefit only the speculators. Actual long term investment is something different, but if you can get better gains from speculation, guess which one most people go for?

Then if you impose tarriffs, you will likely plunge the USA into a depression for a while, until the extra costs work through and companies tool up to produce stuff. you might well increase employment, because of the need for companies to employ more people to produce more to sell.

I really cannot tell if decreasign direct taxes and getting the money from tarriffs will do anything about inflation. There will almost certainly be some inflation. Moreover, your point about encouraging domestic oil and gas exploration is nullified by the simple point that there is very little oil left in the USA. Thats the reason imports have risen so much. WIth regards to that you are up against a siple physical fact. However what it would do is make the alternatives more plausible, such as people living closer to work and shopping, public transport, the demise of SUV's, etc.

 

I think you've got your numebrs right. But since the seventies, oil has always been about to run out in "thirty years."
No one really knows how much oil is locked up in Alaska, since there's been no real exploration.

One of the major contibutors to WWI were high tariffs and nationalism. If the USA imposed 100% import tariffs, we would seriously hurt other countries, and they might retaliate by snubbing us with their own tariffs.

 

The original article was nothing more than a screed. Oh, yes Bubba Joe, let's hate laissez faire economics because the French came up with it. Hoo yah. Right...

About the oil...This is where you can see the progressives squirm. Ok, drilling for oil is bad. So is importing it. The economy cannot run without oil -- in the near term. When was the last time a refinery was created in the U.S? What, thirty years ago? So what to do? You can't give the businesses a break in searching or refining or building, because that's "corporate welfare". So naturally the price of oil goes up. Then, they complain about the price of oil. It's a sad little game they play, perpetually blaming others for the problems they've created. You can see the same effect when discussing the inner cities and the sexual revolution.

How do you know there's so little oil left? You don't. You haven't looked yourself, you make it expensive to look, and you don't really want people to look. (And then the ecoterrorists spaz out when we try to drill for oil off the coast.) You then sanguinely proclaim that there's so little oil left. You might want to contact the owners of small oil fields (and there's a lot of them) who can't produce because of the green tape and/or don't have the economic incentive to start pumping oil again. Or talk to the ecoterrorists who are one of the guiltiest parties in screwing over the economy.

More myths deconstructed:

"I dont also see how cutting business taxes will affect the consumer well, since the consumer will have to pay more taxes personally in order to keep on having public services and invade other countries."

Let's see. If the businesses pay less tax, they pass it on in better wages to employees and cheaper products. The businesses that don't lose market share and employees to those that do. A business tax is a double tax anyhow -- because the corporation pays taxes, that's a cut straight off the top of gross income, which employee salaries are derived from. Then the employees pay taxes AGAIN on their salaries. What a rape.

The colonists didn't have "social services" and I daresay, neither do we. There's very little that we actually need to have the government do for us; we are already paying for our own chains and we sure don't need any more.

 

When was the last time a refinery was created in the U.S? What, thirty years ago? So what to do? You can't give the businesses a break in searching or refining or building, because that's "corporate welfare". So naturally the price of oil goes up. Then, they complain about the price of oil.
Sorry, oil prices are going up worldwide. Woldwide shortage of refineries? I don't think so.

 

Yes it is. Arguments are stretched somewhat.

Nope. Imported oil is cheaper to pump (except Russian) and it's more abundant. It's better to save whatever little is left for the future.

Tax gas gazzlers more. Develop railroad transportation (4 times more energetically sound than trucking). Stop "sponsoring" trucking industry. Let trucking and railroading compete in earnest for cargo. Plan livable suburbia. Mandatory sidewalks in cities would be of the great help=Great savings. No new refineries are needed.

So, bussinesses (as large as BP) cannot do anything without government welfare? Why is that? Are they bussinesses or semi-government corporations?

It goes up for totally different reasons. People are siphoning extra $ into oil futures. It's one of the few good ROI areas for tonnes of extra $. You may consider it as an oil bubble. It's reason #1.

Oil prices is liberal fault. wow. Poor helpless corporations. They pay billions in various contributions in vain.

Inner cities is also liberal fault? Good transportation systems sucked middle/upper classes from cities. Industries followed in the search for profit. The poor folks remained to work in the few remaining labor intensive, old plants. Reagan's era made sure that few surviving inner city plants closed. It's liberal fault, right?

Did you notice the difference between plants in suburbia and old/deserted plants in cities (like Detroit)? Suburbian plants = single story (much cheaper to operate). City plants =multistory structures (expensive to operate). Ready availability of the cheap (relatively) land in suburbia is liberal fault. Who would think.

Time of the revenge is coming. China will suck suburbia dry. As suburbia has sucked cities dry.

Evil progressives (without power) made oil exploration expensive? How did they manage? Lemme guess, minimal wage is holding American corporation down. Right? Oil exploration is going on constantly. Too bad, the number of the new fields discovered is getting smaller each year (despite all increasing exploration efforts). There are few restricted for oil exploration areas in the USA (not prohibited). There are not indications showing that second Persian gulf is hiding there.

Green tape? What is that? Where are the green taped areas? "Economic incentive" is provided by market prices. Market is God, right? What additional incentives do you suggest? Zero minimal wage, zero environmental regulation, direct subsidies ... what else?

So far, you are creating them.

Obviously, it's not the case. Average salary (corrected for inflation) is just about the same as it was 3 years ago (or even 30 years ago). Cheaper products? You must be kidding. Where did tax cuts go?

Man, what are you bubbling about? Salaries of workers (except CEO and upper management) changed very little after Bush's tax cuts. Capitalists voluntary share additional profits with workers?

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It's against everything capitalism is about. it's quite ridiculous statement going against common sense and history. I'm not completely sure; but I think that corporations do NOT pay taxes based exclusively on profits. Thus, significant portion of corporation taxes is just another indirect tax on customers not on corporations (it's included in the price of goods).

Sure they did have social services, kind of. One would have been asked to wear a robe saying poor, or something like that, while living on help.

Man, obviously, you never have lived in a weak government country. Weak government=strong corruption/crime/mafia/etc. Government, strong man or constant turf wars between criminal clans. That's choises one has. Paradise is not on the list. And, no, your big gun will not help you much. See, modern history of Russia.

Libertarian phylosophy is quite stupid if one will think little more: see Libertarianism in One Lesson

 

Which bit of this is confusing? The USA has been increasing its % oil from imports for years. So has the UK, where I live. Our North sea oil production peaked something like 7 years ago, we're producing less now than we used to. A fair number of people are waking up to the point that the era of really cheap easily available oil is within sight of ending. It scares a lot of us as well.

Yes, maybe nuclear plants would help. People dont always know things are this bad, since it is rarely stated in newspapers and news programs. The UK switched to being a net importer of natural gas this year, and all I saw were a few mentioned buried deep in the business pages when they were walking about long distance gas pipelines across central Asia and which companies were involved in them. The fact that it means we'll be spending more money importing resources, as well as importing them across some of the more unstable parts of the world seems to have escaped most of the mainstream media. Some branches of "progressives" have been talking about all this for years. Many have made wildly innacurate predictions, but then thats normal for every prediction game.

 

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Saudi "terrorism" was sponsored by Americans&Pakistani to fight soviets in Afghanistan. Dog has biten feeding hand, who would think? Taliban was created by Pakistanis using American $ and expertise. I don't buy terrorism histeria. The root of the current brand of terrorism is in the USA and its foreign policies and disregard to others. Impotent, sybarite Saudi ruling class (depending on the USA for its existence) and its slaves are danger to the world? gimme a break.

Terrorism is just another form of a war. It's time to get used to the idea. It's the only war poors can wage. Comparing body counts, it's much more "humane" than conventional, "civilized" warfare.

 

Oh, I agree - one persons freedom fighter is another persons ''terrorist''. However, whether ultimately history will judge them as ''right'' or ''wrong'' - 15 of the 19 9/11 hijackers were Saudi -- Saudi money has long funded anti-American activity. But the Saudi's are Bush (and others) oil butt-buddy's. So its the hypocrasy of the whole situation which bothers me, and which I try to bring attention to.

 

As for Saudis hijackers, I've seen no proof. There was too little real info on 9-11. Lots of questions/hypothesis remains unanswered. People believe everything government feeds them unquestionably. On the other hand, several men, FBI claimed to be on the planes, were found alive elsewhere.

There are no buddies on the top. It's a lonely place. If something connecting USA and Saudi plutocracies, it's mutual interest.

 

*You've* seen no proof?!

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Well if YOU have not seen proof, then who cares if even the 9/11 investigation confirmed that the majority of the hijackers were Saudi citizens . . . I mean after all *YOU* have not seen proof! LOL!

 

9/11 investigation confirmed. How did they confirm? Previous, "conformation" wasn't quite precise. Have you seen the proof? Of course, we can trust fearless leaders, if they say something it's a unmovable rock. I guess, it's cheaper for government to question the sanity of the people asking those questions. It's predictable. Still, lots of questions remain to be answered.

 

The people in power DON'T want Saudi Arabia to be seen as bad guys. They are their oil butt-buddy's! The people in power would have wanted the 9/11 hijackers to have been seen as Iraqi's I'm sure. The Saudi's being allowed to fly out of the USA after all air-traffic was grounded post 9/11 . . . but folks from other mid-east countries and such not being allowed to do same? Suspicious.

Now I certainly agree that none of us know for certain what is going on. But for us to selectively cozy up to nasty folks like the Saudi's, South Koreans and Israeli's - while meanwhile demonizing other countries selectively -- shows mostly which countries line our pockets or fit into our main superstitious/religious beliefs I suspect.

Anyways, you have not seen anymore or any less ''proof'' than I have ultimately - unless you've been in the boardrooms of those nations first-hand. All any of have to go on are the 2cd hand reports we all get from various sources.