conservative failure

The U.S. Chamber of Commerce: Threat To Capitalism

Eric Lotke — Thu, 11 Jun 2009 07:42:23 -0700

The U.S. Chamber of Commerce launched yesterday “a sweeping national advocacy campaign … to defend and advance America’s free enterprise values in the face of rapid government growth and attacks by anti-business activists.”

The Chamber of Commerce doesn’t get it. They aren’t defending capitalism and free enterprise. They are all but destroying it.

Free-market fundamentalists don’t understand that capitalism is a system. It has rules, boundaries and obligations. When those rules are broken, the system falters.

• It’s not football without lines to mark touchdowns and out of bounds.
• It’s not basketball without a referee to call the fouls.

This is more than just a sports metaphor. Capitalism won’t work unless a negotiated price and promise to pay $100 is followed by payment of $100. And someone needs to enforce those rules. Otherwise it's not capitalism. It’s robbery.

These rules operate at every level.

• My AAA bond valued at $100 million actually needs to be worth $100 million, and it needs AAA assurance of quality — not conflicts of interest where companies issuing securities pay the agencies for their ratings.

• My “mortgage-backed security” needs to be backed by an actual buyer with an actual stake in real property — not bankers whose interest is in transaction fees from bundling, re-bundling and sales.

• My tomato should be free of salmonella, my toys should not have illegal levels of lead-based paint, and my pet food should not be infused with toxic melamine.

If nobody enforces those rules, the system starts to break down. That’s what’s happening now.

A generation ago, free-market ideologues decided that markets could police themselves and regulate themselves. They said history had finally invented something that was truly-self correcting. So they took the police off the beat and slandered as socialism every effort to enforce rules or enforce the reliability of promises.

Look at the result. Now we need to save capitalism from itself.

“We’re launching this campaign,” declared Thomas Donahue, President and CEO of the U.S. Chamber of Commerce, “because those who make or influence economic policy must understand that a productive, competitive private sector is not something they can take for granted.”

That’s precisely the point. A productive, efficient private sector is not something we can “take for granted.” It is something we need to fight for.

We need to fight against anti-competitive monopolies, fight against regulatory agencies captured by the industry they are supposed to regulate, and fight against industry groups that break the rules in the name of freedom.

Freedom isn’t free. The crisis interventions of recent months were needed to save capitalism from itself. The Chamber of Commerce got exactly what it wanted these last few years. We need to stop them before they kill again.

Tea Party Blame Misplaced

Armand Biroonak — Thu, 16 Apr 2009 07:13:07 -0700

Protesters at the “Tea Party” in Washington yesterday (see our video here) had a jumbled message against everything from taxes, government spending, Obama, and pork. As I walked amongst the crowd, the anger and outrage against the recession were real and palpable. What was baffling though, were protesters’ chants assigning the blame for crises to Obama and Democrats, when conservative policies are at fault.

1) “Stop taxing the ‘average Joe.’” The truth is, conservative policies skewed the tax structure, burdening the working and middle class, while handsomely benefiting the very wealthy. The top 1 percent of households—with an average income of $1.3 million—have seen their tax burden shrink by one-third since 1986. Over those same years, the top 1 percent doubled their share of the nation's income, from 11 percent to 22 percent. Bush’s tax cuts gave the top 1 percent a percentage reduction in after-tax income that was 17 times greater than that provided the lowest 20 percent households. In dollar terms, the top 1 percent pocketed an average $44,622, people in the middle gained $746 and the bottom 20 percent received all of $22.

2) “Work harder to gain wealth!” But Americans have been working harder and gaining little in return. American workers are the most productive in the world . American productivity has grown 83 percent from 1973 to 2007. Meanwhile, from 1979 to 2007, the top 5 percent of income earners saw wages increase over 36 percent. while the middle quintile saw a paltry 7.8 percent increase, the bottom quintile averaged a meager 3%.

3) “I had to transfer colleges because the government took my money!” Government absence is the cause, not the remedy. With less funding, colleges are forced to hike tuition. The average tuition at a public four-year university has increased 29% between 2000 and 2007. Private college tuition increased by 13% over the same period. A December 2008 study by the National Center for Public Policy and Higher Education showed 49 states received a grade of F (failing) on college affordability.

4) “Obama-Pelosi spending will saddle future generations with debt.” Where was the outcry against Bush policies that largely contributed to deficits? The cost of Bush tax cuts for the wealthy left the country $1.5 trillion in the red. The total cost of the Iraq War is estimated to be nearly $3 trillion. Defense spending—excluding wars—skyrocketed, more than doubling since 2001.

The Tea Party rage against Obama and government is just plain wrong. Conservative policies of the past are to blame: “trickle-down” economics, less government and deregulation were the disastrous cocktail causing the crises faced today. To solve our problems, government investment and progressive taxation can not only pull our country out of crisis, but place America on a stronger foundation to move forward in the 21st century with quality education, health care, cleaner energy and modern infrastructure.

Manufacturing an Economy that Works for Working Americans

Anita Chariw2 — Tue, 07 Oct 2008 12:04:30 -0700

Conservative Failures

Anita Chariw2 — Mon, 08 Sep 2008 08:54:09 -0700

From the People Who Brought You Misery

Anita Chariw2 — Tue, 02 Sep 2008 08:36:41 -0700

Panel’s Bipartisan View: F.D.A. Is Underfinanced

Alex Carter — Wed, 16 Apr 2008 12:02:23 -0700

The Food and Drug Administration needs far more money than the White House has proposed for next year, senators of both parties said Tuesday. “To us, it’s clear that they’re seriously underfunded,” Senator Herb Kohl, Democrat of Wisconsin, said after a hearing of the Appropriations subcommittee, headed by Mr. Kohl, that oversees the agency’s spending.

Agency Is Under Pressure to Develop Disaster Housing

Alex Carter — Mon, 14 Apr 2008 09:30:45 -0700

After the federal government announced in February that it would no longer use travel trailers to house the victims of future disasters, there was an initial sense of relief along the hurricane-scarred Gulf Coast.

FEMA Limits Formaldehyde in Trailers

Alex Carter — Mon, 14 Apr 2008 09:12:12 -0700

After resisting for years, the Federal Emergency Management Agency is setting strict new limits on formaldehyde levels in the mobile homes it buys for disaster victims.

Conservatism Is Dying

Eric Lotke — Thu, 13 Mar 2008 18:48:11 -0700

Modern conservatism is dying. There’s still an election to be held, but conservatism as we’ve known it since Ronald Reagan is failing—ground down in the desert of Iraq, drowned in the floods of Hurricane Katrina, foreclosed by the housing crisis and poisoned by toys imported from China.

The American people are figuring this out. While conservatives repeat their time-worn slogans—“small government, low taxes, high security”—the American people are living the consequences.

We’ve seen eight years of a conservative presidency, six years overlapping with a conservative Congress, and 30 years of broadly conservative ideology. Now reality is showing how the values embodied in those slogans have been betrayed.

Conservatives say “shrink government.” We get inadequate levees, exploding steam pipes and schools without textbooks. Conservatives say “deregulate,” and now Thomas the Tank Engine is painted with toxic lead. Conservatives say “low taxes,” but it primarily applies to millionaires, billionaires and crony corporations.

What follows is a history of these problems, and the direction people want to go instead.

Appealing slogans, disastrous results

The conservative shibboleth—“small government, low taxes, high security”—has timeless appeal, founded on genuine moral and constitutional values. But the application of those values by today's conservatives is frightening.

Shrinking Government

"Government is not the solution to our problem; government is the problem."
—Ronald Reagan, First inaugural address, January 1981.
"My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub."
—Grover Norquist, Executive Director, Americans for Tax Reform.

The modern conservative movement is united less by belief in small government—a traditional constitutional value—than by disdain for government. They don’t just want to shrink it. They want to drown it in a bathtub. Such disdain courts exactly the kind of disasters we got.

Hurricane Katrina. A shrunken government failed in fundamental responsibilities when Hurricane Katrina hit New Orleans. Crucial levees had been left to rot and the Federal Emergency Management Agency had been “systematically downgraded and all but dismantled.” Reconstruction remains a forgotten promise.

Decaying Infrastructure. While government shrinks, America falls apart. A highway bridge collapses in Minneapolis and a steam pipe bursts in Manhattan. One out of four bridges is “structurally deficient or functionally obsolete.” Commuters waste hours in gridlock. School roofs leak and children share textbooks. State colleges raise tuition at three times the rate of inflation as states cut back public support. “Starve the beast,” conservatives say. But what they really starve are the triumphs of previous generations and investments vital to our future.

Free Market Faith

"The best minds are not in government; if they were, business would steal them away."
—Ronald Reagan
“The average Halliburton hand knows more about the world than the average member of Congress.”
—Vice President Dick Cheney

Conservatives disdain government but they revere the private sector. They think that government involvement in private enterprise is bad, and that everything done for profit will be done well. Conservatives seem to forget that the purpose of profit is profit. Business interests might well line up with the interests of government and taxpayers, but they might not. At those moments, government is supposed to be on the side of the people. That push and pull makes the system work; a one-sided system works for no one.

Enron and Friends. Deregulation of electricity led to the Enron fiasco. Without government supervision, Enron artificially limited the power supply in California and drove up prices. The ompact of the ensuing inflation of Enron stock value with no real economic basis is best understood by Enron employees who lost their pensions when the company went bankrupt. But Enron was not alone. Worldcom, Adelphia and hosts of other business debacles prove that markets need grown-up supervision.

The Housing Bubble. Failed regulation of the financial sector brought us the housing bubble. It became rare for banks and other mortgage issuers to hold mortgages, so they no longer cared whether the borrower could pay the mortgage. Instead, these companies made their money from the fees they charged the borrowers and quickly sold the mortages into the secondary market. They loans were then packaged into mortgage-backed securities, which were in turn packaged into "collaterized debt obligations" and other complex assets that were sold around the world to investors, many of whom had no idea what they were buying. This new finance structure, in which those who put up the money had no knowledge of the value of the underlying asset, pushed up home values beyond the reach of ordinary buyers. In response, homebuyers turned increasingly to risky instruments that created artificial money to buy houses at artificially high prices—until the bubble finally burst.

Consumer Safety. Deregulation of consumer products led to e-coli in our spinach, salmonella in our peanut butter and lead in our Barbie dolls. Agricultural inspectors sat on the sidelines while forklifts carried “downer cows”—who cannot walk and are presumptively unsafe for human consumption—for slaughter and sale as food.

Halliburton. The vice president's firm receives billions in no-bid contracts, despite marginal and often inadequate performance Most recently, a unit spun off from Halliburton provided water to military bases in Iraq that sickens troops.

Lower Taxes.

"Low taxes" as practiced under conservative rule is less about minimizing the tax burden on working people than about budget gimmickry that rewards friends and conceals deficits.

The biggest break for the richest people. Millionaires got an average $118,000 annual break from the Bush tax cuts, while average middle-income households got only $740. Billionaire money manager Warren Buffett points out that he pays taxes at a lower rate than his receptionist (and he would willingly change).

Subsidizing record profits. Oil companies pocket billions in subsidies and tax breaks while racking up the largest profits in corporate history. Corporations get tax breaks for moving jobs abroad.

Moral Values

The moral values crusade has turned morality into a burlesque. Conservative leaders are obsessed with abortion, gay marriage and stem-cell research—issues that divide and confuse. They don’t care enough about the morals we learned in kindergarten. Share. Wait your turn. Treat others as you want to be treated yourself.

And conservatism entirely misses the big picture. It doesn't see the greed and materialism tearing us apart. It doesn't see poverty and economic injustice, or refugees fleeing genocide. It doesn't care for the green Earth that earlier generations protected in national parks.

Terri Schiavo. Conservatives put her family through hell before honoring her husband’s request to remove life support. Blinded by faith, conservatives cast aside honored principles of small government and states’ rights.

Choice. Conservatives seek to deny women the right to decide whether to have a child on her own. They don’t seem to care about the women’s own decision, the risk to her health or the child’s well-being after birth. And they insist on teaching only abstinence during sex education in schools, though a mixed curriculum shows better results. Abortion-obsessed conservatives even force their morals onto foreign policy by denying U.S. government aid to organizations in countries that allow abortion in addition to contraception, family planning or other health programs.

High Security

Cowboy-booted conservatives constantly tell us how much danger we’re in and how much we need them to keep us safe. From crime to drugs to terrorism, conservatives wear the security mantle. Meanwhile, they ignore real risks, dismiss success stories and stir up hornets nests all over the world.

Iraq. Conservatives chose to invade Iraq on trumped-up charges of weapons of mass destruction. Now oil prices have skyrocketed, Baghdad has become a recruiting ground for jihadists, we’re bankrupting ourselves, and American standing has never been lower in the world.

**Slogans Have Consequences**

They Say …	We get…

Shrink Government --	The drowning of New Orleans
	Collapsing bridges
	Higher state college tuition
	Stuck in traffic …

Deregulation --	Housing bubbles
	E-coli spinach
	Toxic toys
	Enron economics …

Low taxes --	Higher tax rates than billionaires
	Oil company subsidies for record profits…

Moral values --	Terry Schiavo, yes
	Stem cell research, no…

High security --	Iraq…

Conservative Policies: Not what people want

Behind the high-level principles lay specific policies. Here again, conservative choices diverge from policies people want. Here are some polls about some signature policies.

Health Care

Health care reform is a top priority for America’s voters. A Gallup survey in November 2007 revealed 81 percent of Americans are “dissatisfied” with health care in this country, with 56 percent saying the health care system “has major problems.” Health care routinely appears at the top of voter concerns, mixed in with Iraq and the economy, depending on the exact question.

When asked how to deal with health care problems, people do not respond from a conservative position. They don’t talk about getting government out of the way or promoting individual responsibility. Quite the contrary, Gallup’s survey showed an overwhelming belief that it is the federal government’s responsibility to make sure all Americans have health care coverage (64 percent to 33 percent). A Quinnipiac University poll of registered voters in October 2007 showed that voters care more about covering the uninsured than keeping costs down (53 percent to 41 percent), even though most voters (94 percent) are insured. People want our government to be involved, not to shrink.

A survey by CBS News and the New York Times went one step further, asking people not only if they want the federal government to guarantee health insurance for all Americans (64 percent yes vs. 27 percent no), but whether they would be willing to pay extra for it. Even with money on the line, people wanted expanded health care. Four times as many people thought the government should “guarantee health insurance” even if “the cost of your own health insurance would go up” (48 percent vs. 11 percent). Similarly, four times as many people said it was more important to expand access to health care than maintain the Bush tax cuts (76 percent vs. 18 percent).

Energy

Americans are tired of rising fuel prices, but they want more than just cheaper gas. They are deeply dissatisfied with the status quo, and they want an entirely new energy policy. Democracy Corps’ survey of voters in April 2007 found 65 percent say our energy policy is “seriously off on the wrong track,” compared to just 27 percent who say it’s “headed in the right direction.” A survey by CBS News and the New York Times in April 2007 revealed 63 percent disapproval of George Bush’s “handling of the energy situation,” and only 27 percent approval.

In addition to disapproving of current policy choices, Americans are pointing where they want to go. Surveys by Gallup and CBS News indicate a higher priority on conservation than production (Gallup, 64 percent to 26 percent; CBS, 68 percent to 21 percent). The Democracy Corps survey of voters shows they want to “act immediately” on global warming (64 percent). Nearly three out of four voters (74 percent) want to “move from oil to alternative fuels for our vehicles because it will cause less pollution, stop global warming and make us more energy independent.”

Most tellingly, Americans do not view alternative energy as a threat. By an overwhelming margin (79 percent to 17 percent) voters surveyed by Democracy Corps believe that “shifting to new, alternative energy production will help America’s economy and create jobs, not cost Americans jobs.” Even if there were costs, people are willing to pay them. The CBS News/New York Times survey showed that 64 percent of Americans are “willing to pay higher taxes on gasoline and other fuels if the money was used for research into renewable sources like solar and wind energy.” Fully three out of every four (75 percent) Americans would be “willing to pay more for electricity if it were generated by renewable sources like solar or wind energy” in order to reduce global warming.

Taxes

Nobody likes to pay taxes, but the conservatives have manipulated that sentiment for political gain despite real world consequences, and people are starting to catch on. A January 2008 Wall Street Journal survey of adults shows more saying the Bush tax cuts were “not worth it” than “worth it” (45 percent to 42 percent). Democracy Corp’s poll of likely voters in December 2007 reveals more frustration that taxes are “unfair” (56 percent) than that they are “too high” (39 percent). Tax cuts provide less a sense of relief than an indication of which side the government is on—and people don’t like what they see. The biggest tax problems were loopholes and inequality. These troubled likely voters twice as much as high payments, even in Republican districts (51 percent vs. 24 percent).

The Bottom Line: A Dying Ideology

These surveys show that conservative policies diverge considerably from public opinion. Although it’s possible to win elections under such circumstances, it does not bode well for the health of a mass political movement.

Indeed, John McCain’s presidential campaign indicates the weakness of the conservative estate. Sometimes McCain brands himself as a "true conservative," but he's famous for being a maverick, an independent who bucks the conservative party line—and thus many "movement conservatives" have not rallied to his candidacy. Other candidates who proudly declared themselves conservative in recent months have not survived primaries or special elections. The March special election victory of progressive Democrat Bill Foster in the Illinois district that had been held by the fiercely conservative former House Speaker J. Dennis Hastert is a particularly dramatic example. That doesn’t mean Democrats will win in November—personalities, trust, personal attacks and get-out-the-vote efforts certainly matter—but conservatism is far from alive and well.

Creative Conservatism

Digby — Fri, 25 Jan 2008 16:19:19 -0800

Dave Roberts of Grist takes a look at Newt Gingrich's innovative new environmental proposals which, unsurprisingly, looks like another fantastic opportunity for rich people to bleed the taxpayers:

[W]hat Gingrich recommends is, in Sean's phrasing, pro-business, not pro-market. He wants to ladle out public money to favored corporations while shielding them from any regulations....This is what passes for conservative in today's party of economic royalists, but it is not conservative in the original sense.

It leaves Gingrich with very little to offer beyond media-friendly rhetoric. Look at the answer he offers Sierra Magazine (in a roundtable well worth reading) on what the next president and Congress should do first:

Americans are concerned about global climate change, but they want legislation that does not expand the size and severity of federal control of business enterprise. American businesses want to be part of the solution, and they have good ideas that are being implemented. Our business community is already ahead of the American government, so government must become a facilitator of innovation. The federal government could enact creative legislation that keeps businesses on task as we work to develop clean and sustainable alternatives to petroleum. Americans will elect candidates who support real changes in energy policy and market-based innovations that will lead the world to import clean American technology.

Rhetorical fluff aside, it seems that "facilitator of innovation" is the key concept here, and in Gingrich's mind, that translates to "dispensers of subsidies and tax breaks."

That would be in keeping with everything we saw the conservatives do for the last few years. From "faith-based" programs to Blackwater and everything in between, conservative businesses collected a very nice tithe from the American taxpayer for the past few years.

It's a testament to the pragmatism and creativity of the right that when they find themselves on the losing side of an issue they always find a way to use it anyway to deregulate business and funnel tax dollars to their contributors — and keep up the fiction that they believe in small government. Clearly, Gingrich sees the new Green Conservatism as another opportunity to use tax dollars to benefit their wealthy contributors without the inconvenience of regulations and oversight. (Plus, he's always thought of himself as something of a "futurist," so this issue this is tailor made for him.)

The truth is that "small government" was always hype. After all, the modern conservative movement was built on the idea of the need to build and maintain a large and very expensive police and military state to combat the commie boogeyman. The GWOT has brought that back with a vengeance.

Here's the small government philosopher king Gingrich in 2005:

We ought to say to [state university] campuses, it’s over…We should say to state legislatures, why are you making us pay for this? Boards of regents are artificial constructs of state law. Tenure is an artificial social construct. Tenure did not exist before the twentieth century, and we had free speech before then. You could introduce a bill that says, proof that you’re anti-American is grounds for dismissal.

Big government, conservative style. The amount of money being spent on Homeland Security and skimmed through war profiteering alone is enough to make a Roman Emperor jealous. Indeed, they've appropriated so much money they can't figure out how to spend it. It was reported not long ago that even small Alaskan fishing villages were being absurdly outfitted with surveillance tools intended for anti-terrorist activity:

So eyebrows were raised in January when the first surveillance cameras went up on Main Street. Each camera is a shiny white metallic box with two lenses like eyes. The camera's shape and design resemble a robot's head.

Workers on motorized lifts installed seven cameras in a 360-degree cluster on top of City Hall. They put up groups of six atop two light poles at the loading dock, and more at the fire hall and boat harbor.

By mid-February, more than 60 cameras watched over the town, and the Dillingham Police Department plans to install 20 more — all purchased through a $202,000 Homeland Security grant meant primarily to defend against a terrorist attack.

True, this was undoubtedly part of the Alaska congressional delegation's amazing ability to lard on the pork, but it illustrates the fact that there has been a huge amount of money specifically designated for very intrusive police agencies, and much of it is not being adequately monitored. If little Dillingham, Alaska, has 60 surveillance cameras, it's hard to imagine what kind of surveillance the Big Brother conservatives approved for the big police agencies in major cities.

This is a big, modern country with a large government sector and it always will be. The difference between the two competing American political philosophies is how government should be run and for what purpose. Modern conservatives believe in using government as a patronage machine to expand police and military power while dispensing tax money to (and protecting the interests of) big business and the wealthy. Modern progressives believe in using openness and transparency to protect civil rights and civil liberties, expand security and provide necessary services the markets can't adequately provide to average citizens.

So since it's clear that both conservatives and progressives agree on the fundamental question of the size of government, the only real question for citizens today is what they want their big government to do.