Thursday, November 17, 2005

Republicans Don't Understand Capitalism


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 rambling on about topics that they believe they understand (but are actually clueless about). "American values" for one thing.

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.

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 the 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 Bush & 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.


Anonymous said...

Over the past few years, the GOP has been working to loosen the rules regarding children working. If we continue down this path, we could very well see a return to 19th century style child labor conditions. Already U.S. corporations are pocketing huge profits that derive from child labor in other nations, such as Indonesia. Give that some thought the next time you slip on your pair of Nikes.

Anonymous said...

Alan Greenspan has been sounding the alarm about America's huge deficits in his recent press conferences. It's a shame he didn't speak up about this previously during his long tenure at the Fed. It's clear that he now knows the deficits are out of control and he's just trying to cover his own ass.