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Always “Moar Big Government”

I must hat-tip John M. Mason at Seeking Alpha for inspiring this post. He weaves some recent news articles into a story which I shall sharpen, with my own viewpoint and commentary.

First, consider that “Recovery in U.S. is lifting profits, but not adding jobs” (says the New York Times). As percentages of national income, corporate profits today are they highest they’ve been since the 1950s, and employee income is the lowest it’s been since the 1960s.

So what are companies doing with their profits?

In other words: Companies just don’t feel that they have many productive opportunities / uses for their money, in the U.S. And do feel that they face unpredictable, yet ever-growing regulation – as well as relatively high taxes. So, they don’t hire (in the U.S.). Instead, they dispose of their profits in ways that accomplish little but to reward their shareholders, thus raising the stock market.

Connect that, folks, to the market’s recent highs. But what does a rising stock market accomplish? Little but to make the wealthiest households feel wealthier.

And so, to the extent that rising consumer spending has contributed something to U.S. recovery, that spending has come more from the wealthier households. “Wealthier Households Carry the Spending Load”, says the Wall Street Journal. Meanwhile, Wal-Mart and Target, who serve less-wealthy households, have reported slower sales.

This is an economy suffering from the anti-market, anti-growth policies of the Obama administration. Not surprisingly, it is also an economy skewed to the wealthy.

I say “not surprisingly”, because I know that the two things are connected. It is precisely the middle and working classes which benefit from Small Government policies, which are pro-market and pro-growth policies (that the Left carefully propagandizes as “harsh”, “austere”, “devastating”, etc.).

And it is precisely the established elites, the American aristocracy, who benefit from the world of sluggishness and stagnation that the socialistic, Big Government policies so beloved by Obama, Paul Krugman, etc. will cause every time. It’s happening before your eyes, folks. You’re living it.

But that’s not the ironic part. The ironic – no, tragic – part is that left-liberals, who we know complain about income inequality (thanks Kurt!), are being given that inequality by the policies of the Obama administration. In other words: Their own, left-wing policies of Big Government and money-printing are causing the conditions they decry.

But they don’t see it. They don’t make the connections. They don’t understand that the Federal Reserve’s money-printing – done explicitly to make the wealthy feel wealthier, and not-so-explicitly to finance Obama’s gaping deficits – is a regressive tax, a tax that destroys opportunity for the middle and working classes even as it raises their cost of living.

So, what will lefties offer as a solution to these problems? Why, more of the poison that caused the problems, naturally. More money-printing. More government programs. More regulation. More bailouts (just maybe for a slightly different set of people). More socialism. Always, always MOAR BIG GOVERNMENT.

For example, lately we’ve seen a drumbeat of calls for (yet) higher taxes on the wealthy; taxes that Obama supporters like Warren Buffett would avoid via their accountants, but that would serve to (further) injure small business and up-and-comers, thus protecting the established positions of the elite.

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8 Comments

  1. The only way you can justify some of the positions of people like Krugman is through the premise that at the end of the day, they want a different country — a socialistic nation with limited private property rights. If you did not place that premise at the foundation of their arguments, you can’t wrap your mind around some of their views, which endorse outright fraud (i.e. debt repudiation through inflation). I consider these people to be radical left — a smaller portion of the populace who are for a (near) total government-driven economy.

    The frustrating thing is the rest of the left. I hear intelligent people say stuff like — “I don’t believe in trickle-down economics”, “I believe in universal healthcare and healthcare shouldn’t be for-profit” (so if I am stupid enough to be a doctor, I will have my wages controlled by mandate, but if I’m smart enough to be an entertainer, I can make endless amounts). And these people who hold these views nevertheless claim they are not anti-capitalism (and they definitely don’t want socialism). Therefore, they logically conclude, that more governmental intervention is a solution to any number of problems. People really do not see that trying to have a little socialism and a little capitalism will lead to socialism in the end — unless you have gutsy politicians who will occasionally reverse the course a little (like they did in US and Sweden at least once). “Social democracy” is the new mantra for this crowd these days — and they keep throwing Sweden in my face as the ideal country that they would like to see US shaped after. I laugh whenever I hear this because otherwise I want to cry.

    Comment by Jane Austen — March 19, 2013 @ 12:53 pm - March 19, 2013

  2. JA, exactly. Sweden is a wonderful example of what goes wrong in a country when it becomes too anti-market – and why only moving back along the spectrum, toward the pro-market pole, can fix it.

    I’m thinking of doing a post on “free-market populism”. The phrase is Sarah Palin’s. The meaning is what I tried to touch on in this post: that socialistic policies are actually aristocratic policies (with many layers of makeup and deception applied), while laissez-faire capitalist policies are the real populist policies, the ones that historically improved things for the working class and created the great American middle class.

    Comment by ILoveCapitalism — March 19, 2013 @ 1:06 pm - March 19, 2013

  3. Wait a second. So the Obama economy is benefiting the 1% and foreign bankers? Got it.

    So that’s why Romney wanted to lose.

    Comment by BigJ — March 19, 2013 @ 1:33 pm - March 19, 2013

  4. Sweden’s corporate tax rate: 25%
    Obama’s corporate tax rate: 39.6%

    Who is more Socialist?

    Comment by V the K — March 19, 2013 @ 3:00 pm - March 19, 2013

  5. MOARRRRR GOVERNMENT! MOARRRRRRR WARRRRR!

    Barack Obama, 2013

    Comment by Bruce (GayPatriot) — March 19, 2013 @ 5:07 pm - March 19, 2013

  6. V the K, good point — but people look at more convenient metrics to argue that we are not socialist (I mean social-democrat) enough. Sweden had among the world’s highest top income tax rates (still do), higher government spend % of GDP, more burdensome labor and financial market regulations, a government-run compulsary retirement system, and more “free” stuff. Their deficit problems were bigger than ours. That’s the dream many of our countrymen want to march towards. They miss the part of the Swedish history where the country finally started to reverse course — lowered top income tax rates, semi-privatized pension system, cut other welfare, liberalized trade, and overall moved towards reducing government.

    Comment by Jane Austen — March 19, 2013 @ 6:34 pm - March 19, 2013

  7. I guess when the only tool you have is a hammer, every problem looks like a nail.

    Comment by V the K — March 19, 2013 @ 7:45 pm - March 19, 2013

  8. Great post, Jeff. I get so tired of explaining to liberals that just because corporate profits are up does NOT mean it all should or must be spent hiring workers and building plant. They are of course convinced it’s all a big anti-Obama conspiracy. But then, they read Krugman.

    Comment by Tom the Redhunter — March 19, 2013 @ 9:21 pm - March 19, 2013

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