Republicans Enjoy Big Government Intervention In The Market Just As Much As Democrats Do
They just prefer to distribute income upwards.
Few are cognizant or even aware of this one simple fact. I have brought it up numerous times with my conservative friends and family. I have mentioned it many times in social media and in my writings. I can’t think of a single time that anyone, liberal or conservative, has acknowledged that conservatives love government intervention in the markets as much as liberals, and continued the conversation. When I bring up this fact in person, the response is often quizzical, and the conversation stops or the subject is changed.
Conservatives love to point to big government liberal interference in the market as the cause of the nation’s woes. They often paint a picture of all things government as bad, and then they spout the virtues of the free market. They will wax on endlessly about how regulations have strangled the market. They will pontificate about the virtues of the hidden hand of the free market. But they will rarely if ever, admit to the ways in which conservatives have enjoyed government intervention in the markets.
I’ve tried to get them to admit it, oh, how I’ve tried. I’ve tried on Twitter, Facebook, and the forlorn Google+. I’ve made many efforts to walk them down the road of government intervention on behalf of the wealthy. I’ve spent days in correspondence to get them to that point, after showing them example after example of evidence. All I ever got was crickets.
It’s hard even, to find a liberal who understands this dynamic. Few economists will talk about it. Fewer liberal politicians will even discuss it. It’s like there is this unconscious rule that says that conservatives only want peace, freedom, and American pie, and liberals just want a generous welfare state. Both sides seem to be blinded by a false belief that conservatives want a free market while liberals want massive government intervention.
I’ve looked around and have found a few economists who are aware of, and willing to discuss conservative love of big government intervention in the markets. Paul Krugman comes to mind. Joe Stiglitz is another. Both are aware, and both will point to conservative indulgence in government interference in the markets. But like many commentators, they are far too polite about it.
There is one economist that really caught my attention on this topic. I found him quite by accident. I don’t remember all the details, but somehow, I found this video:
This is one economist who is willing to show us how conservatives were very happy to have the government intervene in the market to save investors from their own mistakes. Dean Baker is a senior economist at the Center for Economic Policy and Research, and he is a visiting professor at the Univerity of Utah. He is one of 6 economists who called the collapse of the housing bubble before it happened. He was and still is one of the few economists who point out the many blatant hypocrisies of conservative economic policy.
The video above was recorded on September 30th, 2008, the same day that all of the business news channels on cable were reporting that all the big banks had stocks that were worthless due to their exposure to the subprime home loans they owned at the time. He sums up the sentiment of the elites at the time very well in this article from The Guardian, published the day before that video was recorded:
In effect, the big banks had a gun pointed at their heads. The banks told Congress that if they didn’t get $700bn, then they would pull the trigger. Given this choice, Congress coughed up the cash.
The bank bailout was government intervention in the free market on a grand scale. Baker is clear in both the video and the article, that the primary beneficiaries of the bank bailout were not the poor and the middle class. No, the primary beneficiaries were the bank executives and bank shareholders. The money received by the banks from the government kept the banks from failing but did little to help the economy recover. This is the kind of intervention in the economy that elite conservatives love but won’t engage in debates about it. This is the kind of intervention that keeps the crickets singing in social media circles when I bring it up.
Another example can be found when states pass laws against unions, wildcat strikes, and other measures designed to limit the bargaining power of unions. That is the government intervening in the market on behalf of wealthy interests. Unions are an appropriate free-market response to employers who act with impunity against their employees. Unions arose as a direct response to monopsony. Monopsony is where buying power is concentrated in one buyer, like in a mining town with one giant employer. Without the union, employees have no bargaining power.
Conservatives will usually point to mob influence and corruption in unions and then tell us we should be more worried about organized crime than worker rights. Nevermind that the mob buys into all kinds of businesses to launder their money.
Conservatives are mum when asked to explain why wages have stagnated for 40 years while executive compensation grew by 900%. Conservatives are silent when asked to explain why free trade in services and products are great until the conversation turns to free trade in doctors by letting doctors from other countries come here to work for less. Conservatives can hardly muster a response when asked why they hardly ever question the cost of war but send up a big stink about food stamps.
Elected officials prefer to appeal to a few wealthy individuals and organizations than try to appeal to a large majority of the people. Harvard Professor Larry Lessig has documented this dynamic in the following video:
Here Lessig shows us how a tiny minority, 0.02% contributes a very large chunk of money to finance our elections. He shows us in detail, how the money primary works and that the money primary gives us a slate of candidates that are always “leaning to the green”. Conservatives don’t like to talk about this, either.
I’ve corresponded with Dean Baker via Twitter about how shy conservative have been unwilling to admit their love of government intervention in the markets. He says that he’s tried to raise this issue with conservatives but they never actually respond. Here’s what he said:
I believe that we need to take the arguments to the conservatives and that we don’t need to preach to the choir. We need to take the debate to the conservatives on FOX News, and in the townhalls and ask them to justify the way the government intervenes on behalf of their benefactors. It’s time to get conservatives politicians on camera to see how they justify their support for a market structured to distribute income upwards. Perhaps then, we can make an accurate appraisal of their motives.