How about a quick review of historical patterns of economic growth and depression in the US?
1820s – 1830s economic growth stemmed from the market revolution (expanding production & proto-consumerism); John Quincy Adams’ pro-growth “American System” sparked economic growth by dumping state and federal dollars into internal improvements, heavily taxing imports, and highly regulating economic policy. GOVERNMENT INVOLVEMENT = ECONOMIC GROWTH.
1837 – 1842 economic depression stemmed from Jacksonian era deregulation and speculative banking practices. LACK OF GOVERNMENT INVOLVEMENT = ECONOMIC DEPRESSION.
1840s-1880s economic growth and polarization of social classes stemmed from (1) government subsidized industrialization (ex. US gov paid for transcendental railroad with land grant and massive loans to big business) and (2) government's alliance with moneyed interests to put down labor organizations. GOVERNMENT INVOLVEMENT = ECONOMIC GROWTH.
1865-1890s economic stagnation in the South occurred as millions of dollars in property (slaves) disappeared and the region resisted the market revolution that transformed the north forty years previous. In this case, government involvement technically led to economic depression but only because it was government who freed the slaves.
1929-40 – depression followed ramped unregulated growth; Hoover’s hands off policy, even after the crash of 1929, demonstrated that LACK OF GOVERNMENT INVOLVEMENT = ECONOMIC DEPRESSION.
1945-70s – cold war growth as the US government dumped tons of cash into the military industrial complex. GOVERNMENT INVOLVEMENT = ECONOMIC GROWTH.
2008 – Crash following thirty years of deregulation in energy, transportation, communications, and banking. LACK OF GOVERNMENT INVOLVEMENT = ECONOMIC DEPRESSION.
So, what is the pattern?
I’m so sick of empty rhetoric arguing that the economy does best when government stays out; it simply isn’t true. American history shows clearly that the economy does best when Congress and the President work to regulate and guide the economy, often dumping federal tax dollars into various sectors.
Conversely, “trickle-down economics” (the idea that lessening taxes on big business with strengthen the economy and trickle down to the middle and poor classes) doesn’t work.
The only time the non-rich get any help is when government uses social programs to give back to the working classes what big business has unfairly appropriated through unrestrained capitalism. No, I don’t advocate communism, but no matter how good you are at a job you don’t deserve to make tens of millions of dollars a year more than others. You’re not that good—nobody is. The wealthy don’t deserve to jump to the top of transplant lists, they don’t deserve to live longer than everyone else because they have better health insurance (paid for by money they appropriated from the working classes), and they don’t deserve to more money than they know how to spend. When we look at all the high paid CEOs and how they get paid ridiculous salaries (many as they drive companies into the ground) I can help but think (1) "do they really deserve those inflated salaries," and (2) “is this the best use of money?" The answer is no.
Monetary value isn’t created by speculators on Wall Street; at its most basic root it stems from labor and resources—labor put in by working class Americans. High prices and low salaries allow big business to appropriate the value of the working classes' labor; however, through systems like social security and a national health care plan that hard earned wealth can be returned to the people who created it and truly deserve it. That sounds not only fair, but economically wise when we consider how beneficial government involvement in the economy has proven.
Think about it.
5 comments:
Well said, it's just too bad your not 35! :)
Yeah right! While I can see that if you pick points in history as "causation by association" you can make assumptions like the ones you have made, I would hope that a history major of all people might be a bit slower to jump to conclusions (I love how the Reaganomics era is left out). By the way, although I can agree that tax breaks don't guarantee a trickle down (although it does happen), additional taxes do. I completely agree that some governmental oversight is healthy in certain sectors to prevent infringing on other people’s rights. I said rights not desires. That said, I disagree with everything else you have said in this post. We do not have the "right" to other peoples' money and nobody can say how much another person should be allowed to be paid. All we are or should be guaranteed is the right to make it for ourselves. Basically, it comes down to work ethic. If someone is willing to work hard enough, eventually he will come out on top. The key is hard work. Second, it is not the government's responsibility to provide for those who cannot provide for themselves. It is our responsibility, not at a national level, at a community (personal) level, where there is choice on the part of the benefactor and some sense of accountability on the part of the receiver. Without the community-level element, we end up with the same worthless welfare programs that are currently in place that turn more people into life-long victims than they actually help. I have no problem helping the people who can’t help themselves (as opposed to those who won’t or choose to do things that will not help them get out of their current predicament). I'm sick of all the people in the country who think they have a right to other people's money (who have usually worked very hard to have it). My grandfather started with nothing, my father started with nothing and my wife and I have certainly been at the nothing point, but we all have freedom to work. I'll never expect a handout from anyone, but I'll certainly expect others to expect it of me. Like crabs in a bucket.
I covered every boom and bust in US history... I think that is pretty balanced.
And no, of course people dont have the right to other people's money, and that is why the disgustingly wealthy should be taxed. They didnt earn that money--they exploited the system and took that money from the working classes. Capitalism is a great system for increasing production--I do not argue that. But at the same time it is also a system that inherently empowers the wealthy and disadvantages the poor. For example, a black youth raised in an inner city by a single mother would find it much more difficult to step out of poverty than a middle class white guy. If both work equally hard the white guy will always get more. And I'm not talking about taxing middle class white people--I'm talking about taxing anybody who makes more than $250,000/year. Lets be honest, there is no human being who contributes so much to society that he/she deserves to take home a million dollars a year, but lots of Americans do. I bet you can guess what race most of them are. Is that just a coincidence that nearly all the filthy rich people are white men? So are black women just stupid and lazy? Same for Mexicans? I refuse to believe that non-white people and women are generally less intelligent or simply dont work as hard. The more obvious answer is that the system empowers white men at the expense of all others. It makes it easier for whites to climb into the middle class, but more completely empowers the ultra rich at the cost of all others. Government exists to balance that system. People who work hard and try to elevate themselves should be able to do so, even if they were not white rich kids. The value of their labor has been unethically transferred to the ultra rich and government should help pass a little of that back.
Oh, and as for the Reagan administration economic boom I think you will agree that there was (1) a democratic congress for 6/8 years, and (2) Reagan dumped tons of $$$ into the military industrial complex. Both demonstrate that once again, big government dollars do drive the economy well.
Thanks for that history lesson Matt! I agree that government regulation keeps the market working.
I find it interesting that most people think the biggest social ills of our time are crime/violence/drugs/immorality - but I think this country's materialism and lack of distribution of wealth makes this the largest social problem of our time.
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