Today in The New York Times, Nobel Prize winning Paul Krugman, who is consistently lambasted by Libertarians and neoconservatives for his essentially Keynesian stance regarding government involvement in the economy, poked holes in the now-trending Republican tactic of insisting that the economy can only grow and unemployment ease if we deregulate and allow Big Business to operate without hassles.
I've said it before, but I'll say it again: Isn't it interesting how, all of a sudden, all the Republicans and conservatives--from John Boehner, to Eric Cantor, to Rush Limbaugh, to nearly everyone who appears on Fox News--are using this argument? Perhaps those who count on God Almighty to use His Invisible Hand upon the American economy believe this is fate. But I blame it on e-mail and organization.
What's particularly funny about this rush to deregulate the country from calls to eviscerate the Environmental Protection Agency to tearful sobs coming from Wall Street billionaires who only make $4 billion a year, is that common people, people just like you and just like me, people who are barely getting by in this rotten-to-the-bone economy, are hollering the same thing.
We hear calls that Obama himself is the enemy of the economy and that his economic policies are to blame. But, especially from the Republican and conservative side of the argument, we hear next to nothing about the real and verifiable causes of the economic downturn which began in 2007 and has now resulted in a so-called "jobless recovery". Nope. When it comes to blaming financial "wizards" like the ones who habitate corner offices at Goldman Sachs for their crazy gambles with other people's money, we get silence from the right. And when we think about huge banks like J.P. Morgan being blamed for complicity in the subprime mortgage freak-out--well, nothing at all from the right.
Meanwhile, the so-called Teatards of the Tea Party (I call them Teatards because they call people like me Libertards for being Liberals) are wielding signs that call for government to get out of everywhere and blaming the whole mess with TARP on the Federal Reserve's fiat money policy and on what they continually dub Big Government.
This blame game is trickling down to lowly little me. Last July, for example, when the Teatard faction of Congress decided to take hostages and threatened to shut-down the government, I happened to be one of the inadvertent hostages. You see, I happen to be on disability and in an assisted living housing situation. Suddenly, because the Teatards wanted the government to default on its debt, as if that would be something positive, I faced the possibility of not getting my disability check on time.
This would have been a mini economic crisis of huge proportions for me. I wouldn't be able to pay my portion of the rent, I wouldn't be able to buy food, I wouldn't be able to purchase the medicine I need to stay healthy, and I'd have to dig into meager savings just so millionaires in Congress could play that dumb, dimwitted game with the US debt. In other words, I was one of the groundlings who got caught up in what essentially was a game of chicken between the free market crowd and the Keynesians--who believe that government regulation of the economy is one way to keep it from swinging widely.
Swinging widely? Since the Standard & Poor downgrade of the US credit rating, and since the collapse of Greece due to two aspects of free market ideology, the stock market has become nothing less than a series of sell-offs as big-wig financiers buy US Treasury bonds out of fears of yet another global crisis.
Greece, by the way, has been a battleground between free marketers (in Europe, they rightly call them "savage capitalists") and a government striving to keep its social democratic system intact. For one thing, the free marketers in Greece have been waging a campaign for years to cut taxes. The subsequent tax-cuts have robbed Greece's ability to support its social safety net to the point that, just as in the US, the Greek government was forced to borrow a lot of money. Then, Goldman Sachs got involved. Goldman offered to help the Greek government to hide its debt, took Greek debt, converted it into derivatives (does this sound familiar?) and then lost all the money.
Now, Greek's economy is going into default. This is so stressing the European Union that financiers on Wall Street are bracing for a real economic tremor, one that will shake the world.
And look at who's at the bottom of this: The free market crowd, a group of people so enamored with Milton Friedman and Friederich Hayek's idea of a market left alone by government to the point that its natural stability will begin to work as it should. Nobody mentions, however, that Hayek, in 1944, was so discombobulated by Hitler's incursion into Austria that he drew out an economic ideology that eliminates government altogether. Hence, we have the Libertarians and Randians and neo-cons and paleo-conservatives all marching in lockstep in the hobnail boots of an ideology that has been shown to result in a constant boom, bust, boom, bust scenero. We've seen it right here in America. Count the number of economic boom, bust cycles the US has endured since Reagan deregulated the banks in the Eighties.
Worse, strong evidence suggests that the 1999 repeal of the New Deal-era Glass-Steagal act led directly to the subprime mortgage crisis of 2007-08. When investment and deposit banks were allowed to marry, suddenly deposit banks were allowed to do much more with depositer money than previously. In fact, the incentive was so strong to invest debt that mortgage lenders literally went crazy with home mortgage lending--simply so they could combine home mortgage debts into packages called CMOs. When the predatory mortgage loans went south--most of these subprime loans weren't the typical and stable FHA-approved fixed loans but tended toward Adjustable Rate Mortgages with teaser rates that fooled a lot of people unaccustomed to fine print--many of those CMOs and CDOs turned into what was known as "toxic waste".
When all was said and done, companies like Goldman Sachs "liberated" pension funds, retirement accounts, 401(k) investments and dozens of other funds owned by average joes like me of a total of $13 trillion. That's a lot of money. And all the time those supposed wizards were doing their magic number routines, they knew the government would be forced to intervene should the scheme go cold.
Regardless, the Teatards of the dimwit Tea Party movement, perhaps because they've been brainwashed by right-wing talk radio hacks like Rush Limbaugh and Bill O'Reilly, continue to lobby and protest for even more government deregulation. It's crazy. Many of those regulations are designed to protect average people. In fact, the only ones who would benefit from widespread deregulation and a shrunken government would be big plutocrats like the Koch brothers, owners of Koch Industries, and big purveyors of getting out from under the regulatory state, something they've dubbed "the nanny state."
Remember little old me? Remember my little, teensie-weensie financial crisis of July 2011? That sort of injustice would occur on a massive scale, touching everyone but the richest of Americans should a wholesale deregulation take place.
The Bolsheviks called the Tea Party-types "convenient idiots". Ronald Reagan called them "true believers". Liberals call them "know nothings". But the truth to the matter, no way around it, those folks are lobbying against their own interests.
And it's gotta stop.