Countdown 44 Day Election

California 14 days until early voting

WELFARE and CAPITALISM                                     

Welfare is crucial to maintain a capitalist society that functions without insurrection.  If you have a society in despair any way out including crime becomes the norm.  With capitalism here will always be those less fortunate (winners and losers), the key to everyone’s security is to minimize the numbers of those individuals that are living in desperation at any given time. 

I lay the problem of disparity of incomes and the abject poverty some are experiencing at the feet of the Republican party starting with Richard Nixon and Ronald Reagan in their support of the economics of Milton Freedman.  As an economist myself I feel I am capable of denouncing the abject failures of his policies.  After all I have 50 years of hindsight to say how things could have been better, in a 20-20 fashion.

Milton Freedman was a free-market ideologue.  He published an essay 50 years ago that contributed to the pain of our economic policies.  In the Times article he penned he argued that corporations should not go beyond the letter of the law to combat discrimination, or reduce pollution, or maintain community institutions. Corporations, he said, have no social responsibility except the sacred responsibility to make money.  This gives everyone the feeling that being selfish is a principled thing.  Religion be dammed, and this attitude ignores Christian ethics.  How do Evangelicals ever trust a republican, or are they Sunday only Christians making it look like faux Christian hypocrites?

During the Nixon administration in the early 70’s began the process of de-industrialization of the United States.  This came with Nixon opening up the China ties.  Since then many U.S. and international corporations have taken advantage of the abundant and cheap labor. 

At the same time Large U.S. aerospace and aircraft manufacturers realized they could offload complex machine parts to China and sent their machine tools to China maintaining assembly only.  This was done to offset trade imbalances, China purchased the assets.

Slowly the textile mills went overseas, any manufacturing process that had large numbers of unskilled workers was sent out to maintain the maximum profit motif.  The aged tools and mills were being out produced and at a lower cost in China.

Walmart, Costco, K-mart, Target, and other big box stores eliminated the small mom-and-pop small grocery stores and small independent shops.  This along with the closure of mills, and small manufacturing being undercut by low cost cheap goods imported from China this had the effect of taking down main streets.  What the United Stated reaped was lower cost goods from China squelching any inflation for the last 10 years.

China, using newer production techniques and utilizing low cost abundant labor produced cheaper goods.  The international corporations would always seek lower cost and higher profits. 

Ronald Reagan endorsed the idea that cutting taxes would ultimately result in a payback in taxes of more than the cut with economic growth, and voodoo economics.  This failed ploy by the Republicans to minimize the Federal Government has not worked.

This creed became the rationale for corporate callousness. In 1997 the Business Roundtable, the leading business lobby in DC declared that maximizing profit was the purpose of a corporation.  The philosophy morphed into a push to revive the faith in the power of the markets.  To that end there has been a constant push by Milton Freedman and his fellow followers for the argument that if corporations focused on making money, and the government got out of the way, the economy would grow and everyone benefits.  The problem arises when government gets out of the way.  With the notion of greed and avarice being primal and corporations having no other goal than making money the corporations are free to rape and pillage the environment unabated.  I therefore disagree with the “and the government got out of the way” portion of his philosophy. 

The action of offshoring by corporations is a primary factor used to stimmy unions, slashed taxes, reduce regulations, and all this to increase profits. It has been a 50 year experiment and if the goal was an equitable society it has been an abject failure.  If the ultimate goal is to see who is the winner capturing of all the money as in Monopoly, we are not there yet.

The results are clear, the gap between the wealthy and the poor has expanded.  This I can also blame on Politicians.  Once upon a time when politicians were also fiscally responsible and honorable there was a tax on the wealthy at 76%.  This was in part to pay for the monies borrowed during WWII and Korea.  Imagine that having the nerve to actually pay off debt.  Today Trump is running up trillions of dollars of debt with no end in sight and no way to pay it back.

One way to avoid desperation is to provide jobs for those capable of work.  This can take many forms including cities make work programs that beautify neighborhoods, cleaning parks, helping seniors with clean-up and yard care, and cleaning vacant lots. 

Some homeless actually want to live on the streets with no responsibility. The cities that have a homeless population problem can use the labor to build encampments with facilities like a park with showers and recreation opportunities.  This is option only hides the problem.

The problem is not the idea that corporations are there for only profit, that won’t change, it’s that the government has the power to impose and rectify the matter if it takes the reigns.  For example pass regulations such as minimum wage, a more responsible tax structure, carbon emission tax on dirty energy use anti-trust laws to break up monopolies.

CORPORATE WELARE

 The powers of government action has been greatly diminished by the Supreme Court decision  “Citizens United” basically making Corporate political expenditures speech, and therefore no one can limit their expenditures elevating it to a 1^st amendment free speech argument.  Was this intent of the conservative Court so as it can only be changed by altering the constitution? 

Since this decision by the Supreme Court corporate welfare has blossomed.  Giveaways millions to big oil, billions to big pharma, not to mention big Agra.  The sum of the corporate annual giveaway’s has burgeoned in the last decade.

Corporate welfare has now become a thing.  With the tax breaks for risky activities, farm subsidies as a result of ill-informed tariff wars. The Fed has for the first time ever purchasing bonds and corporate debt so the stock market is vibrant wreaks of corporate socialism picking winners and losers, and choosing who to give relief too.  This corporate welfare system is now over 4 trillion (1 T in PPP and 3 T in FED loans and bond purchases I call deferred debt) this year,  at the same time the cost of current social welfare that actually gives benefits to the needy is 1.3 trillion.

With corporate control of government, which once was the only body capable of reigning in the environmental abuses of big corporations, and that are only interested in profit, we will experience the following:

1.Science denial by corporate hacks convincing the public that what you see in climate change does not exist.

2. The idea that fracking is good, injecting potentially toxic chemicals into the ground creating earthquakes and polluting water tables without any liability.

3. Allowing pollution with chemicals known to cause health problems injected into the waterways and groundwater.

4. Relaxing mileage standards for automobiles.

5 Elimination of corporate liability for negligent actions.

These are a few of my favorite things.

Milton Freedman was only partially correct, the government role and responsibility begins where the profit motif ends, that is,  governments must be responsible for the health and well-being of their citizens and they, not the lobbyist, must reign if we’re going to survive on this planet for much longer.  Science will eventually win out; but only if the public not the corporations take control of at least 2 branches of government for a decade.  Will it be too late to reverse the current global warming trends dooming us all?  With corporate control the end hastens.