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The Miracles That Never Were

July 16th, 2008 · No Comments · Economics, Politics

Maybe you’ve heard the plaintive cries: get the government off of our backs (except in the bedroom and on the phone and the net). The ones shedding the tears can’t understand why sane people don’t acknowledge them as prophets and sages. The simple truths are so obvious. Simple? Yes. Obvious? Hardly.

Deregulation is just one of the two traditional foundations of conservatism. The other is tax cuts. These two miracles, when combined, give us, er, uh . . . the mess we are now enjoying?

We’ve recently had a substitute for a tax cut. Are you still trying to find ways to do your part to stimulate the economy? Some people, those who don’t love America as much as you and I, used their $600 to pay off debts. We patriotic paladins gritted our teeth, filled up our tanks (to help the economies of our devoted friends at OPEC) and drove to Wal-Mart (to help the economy of our devoted friend, China).

It worked. The Dow Jones is poised to race past the 14,000 mark. The price of gasoline has fallen back to last year’s level. The value of your house is skyrocketing. So many great jobs are being created Mexico can’t meet the demand. It’s true. The Gospel According to Adam Smith says so.

Well, on closer reading, something these staunch advocates of laissez faire capitalism fail to do is to read Adam Smith. They consider him the prophet of capitalism. Some think he invented it. In fact, he was describing it. He was not a fan. Neither were most of the Founding Fathers. These minions of the mutual funds even confuse capitalism and free-market.

Do you harbor doubts that these are miracles? John McCain assures us that deregulation and tax cuts will solve every problem and challenge we face. He is the voice of experience. He and the other four members of the Keating Five had ringside seats when deregulation gave us the Savings and Loan Scan . . . , Miracle only 19 short years ago. We need that kind of experience to guide us through the current and future Fannie Mae, Freddie Mac, Countrywide, Bear Stearns and American Flag Lapel Pin cris, er, miracles.

The putative conservatives are not scholars. Even Milton Friedman, Arthur Laffer and others of that ilk are really just true believers in a cult that has difficulty with facts, analysis and reality. Their paths to influence are easy, however. All they have had to do was convince such dullards as Reagan, the Bushes and McCain that they are conservatives and understand economics. A far too close association with the subject of economics quickly convinced me that it has yet to develop sufficiently to be considered a genuine academic discipline.

As an alternative to listening to economic illiterates yell at each other while the politicians make promises they wouldn’t keep, even if they meant them, let’s look at a little history. If you want the stock market to increase, you usually get more of what you want when the Democrats are in charge. Well, how about job creation? No contest. So far, my life is book-ended by Herbert Hoover and George W. Bush. Essentially, any metric you want to use casts these so-called conservatives in a very poor light.

Even if the tax cuts were directed to the middle class, they would, under most circumstances, have minimal impact. Even more rarely would that impact be positive. Directed at the top one or two percent, the impact is always negative. Directed at business, they are almost always a serious mistake.

Given the national debt, a tax cut is a lie. It is a tax deferment. It adds a burden to future generations. It is also a tax on the present population, as it cheapens the USD and costs us in a myriad of other ways. Remember. If we are in serious debt, a tax cut is a lie. The lie may work to the advantage of politicians but only to the detriment of the nation.

McCain says that Bush’s goals were the right ones. The problem, he says, is that Bush wasn’t competent in running the economy; carrying out the deregulation and those tax cuts. In truth, the problem is the simpleminded belief that those policies work. Tax cuts don’t stimulate the economy and deregulation breeds scandals and crises.

I used the term ‘putative conservatives.’ They are not real conservatives. They don’t even know the meaning of the word. They want semi-socialism. They want businesses to be free of constraints such as taxes and regulations to protect the people, the country, the government and those self-same businesses. When this gets them into trouble, the government bails them out.

The taxpayers cover their losses while the CEOs and Chairmen get to keep their multi-million dollar incomes and the stockholders get to keep their gains. You and I are offered the opportunity to pay for their greed and incompetence.

How do advocates of socialism for businesses and the wealthy get to hide behind such a misleading tag as conservative? Remember, that even though they were a very small minority of the communist movement in Russia, they called themselves the Bolsheviks, meaning majority. It seems the ‘conservatives’ use some of the same methods.

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