Wednesday, December 17, 2008

United Around Corporatism

For years, people have complained about the polarization of American politics; of the wide expanse between Republican and Democrat, conservative and liberal, red and blue. Most voters claim to want politicians who were more into dialogue than diatribe, and willing to make compromises for the sake of unity. They wanted to see all branches of government work together to address the problems facing the country.

Well, all branches of government are working together now. True, there’s the odd difference—Republicans and Democrats can’t agree on the terms for the Big Three bailout, and the incoming Obama Administration doesn’t seem to have much confidence in George W. Bush. But those squabbles are just over details—on the big issues, all three lawmaking bodies and both political parties see eye to eye (on the economic issue, at any rate, and there aren’t any other issues on Congress’ agenda at the moment).

But the government hasn’t embraced either conservatism or liberalism, at least as either are usually understood. (I suppose that there are both some “conservatives” and some “liberals” who each claim that the government’s present course of action is exactly in line with their beliefs). Instead, we’ve been saddled with what is, essentially, a form of corporatism. The federal government and large corporations have united in an attempt to direct the ebb and flow of the economy.

That sounds like the sort of charge that obnoxious far-left conspiracy theorists and Ayn Randian uber-libertarians are always making, so a bit a clarification is necessary. Our current economic plan isn’t some premeditated, Bond Villain attempt to take over the world—in fact, the intentions behind the plan are not nefarious at all. Nor is it premeditated—rather, the recent spate of bailouts came as needed as the economy collapsed. The massive government expansion wasn’t really intended—it was almost an accident; the result of panic. But the fact remains—the American response to the credit crisis has resulted in a dangerous union of big government and big business.

It probably wasn’t supposed to happen this way—originally, Henry Paulson just wanted to buy some bad mortgages—but the TARP Act has become a free money supply for failing businesses. Corporation after corporation has been saved from bankruptcy by a quick infusion of free cash courtesy of the federal government. The government is many things—but it is not a massive insurance agent. (And, of course, I’m fairly sure that the Constitution frowns on the federal government sending out billions of dollars to private businesses).

The bailouts haven’t really worked—the stock market is still down, and the credit situation is just as shaky as before—perhaps worse. But apart from the fact that it hasn’t worked (which is kind of a big problem), the bailouts set a horrible precedent. The federal government has established that it is there whenever a failing corporation needs a quick hit of cash, and business has proved that it is more than willing to grant Washington a bit of control in return for capital.

This situation really isn’t good, and most people don’t really like it—most polls showed that the majority of the American people were not in favor of the bailouts. But people were scared, and didn’t complain (I didn’t), leaving the government with a massive amount of control over business—and business with a massive amount of control over the government. And that situation probably isn’t going to change soon either—politicians like power, and business likes money, and there’s no way Washington—or Wall Street—will give this opportunity up. Americans wanted their politicians to present a united front and try to fix the economic problem together—and they got what they asked for.

6 Comments:

At December 18, 2008 at 2:48 AM , Anonymous SteveB said...

I wonder whether this is a temporary situation, or a long term trend. I find it hard to imagine, once the economy inevitably rebounds, that sorporations will appreciate the level of governement intervention, even if it means readily available credit.
On the plus side, it also gives truly fiscal conservatives something to run on in four years.

 
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