Reality: It's a bitch.
Previously I mentioned that I was at the Atheist Alliance International meeting in Burbank recently. As expected a good number of people were dyed-in-the-wool Lefties of one statist variety or another. But a goodly number of people were libertarian—which is what I would expect.
In the course of the conference I meet and talked to dozens of people and have previously recounted some of the arguments I heard from the Left. But there was one argument I wanted to leave for a discussion by itself because it was so interesting. And, actually, it wasn’t really an argument, just a statement.
The discussion began with our Left-leaning friend saying that we need stringent government regulation of, well just about everything, in order to protect the Little Guy from rapacious Big Boys with lots of power. To do this we had to give the State lots and lots of power to counter-balance the Big Guys out to hurt the Little Guy. It’s a pretty standard argument from the Left.
My reply was what I would call Libertarianism 101. Simply put, I argued that history has shown that when the State is given such powers it is rarely used to protect Little Guy. Instead Mr. Politician conspires with Big Guy to use the new fangled powers in order to make life for Mr. Politician and Big Guy better at the expense of Little Guy.
As I’ve repeatedly said, the concentration of power does not help the powerless but those who already have power to grab the new power. Politicians need the support of powerful people, not little people. So they automatically turn to the Big Guys for financing. Senators don’t go out and have dinners at McDonald’s with the local gardener. They go to expensive restaurants with corporate executives and work out the “new” legislation that will protect the Little Guy. Since Big Guy and Mr. Politicians need each other, and the Little Guy only has to be fooled at the ballot box—which is a relatively easy thing to do—the end result is not favorable to Little Guy.
At this point my nemesis presented a very sad reply. And I don’t mean sad as in pathetic, I mean sad as in depressed or despondent. He actually looked sad as well. His voice got soft, as if he didn’t really want to say what he was about to say. He sort of shook his head slightly and lamented: “Yes, but it shouldn’t be that way.” And that was the end of his discussion. He bid me farewell and moved on. “Yes, but it shouldn’t be that way.”
What surprised was the lack of willingness to defend his fundamental argument that centralized power could be beneficial to the poor and the powerless. Instead, he just lamented that life is not the way he would like it to be and said, “It shouldn’t be that way.” He was acknowledging that it is that way; just saying it ought not be so. Which is like wishing to fly, despising gravity, and then stupidly flapping your arms in the hopes of getting airborne. He did not seem willing to abandon his premise that state power can be used in the way he thought would be good. He just lamented that reality is not the way it ought to be. If wishing were sufficient we’d all live in Candyland, walking streets of gold and be young, good looking, wealthy and smart. But reality loves to interfere with our wishes. Wishing isn’t enough.
Creating new powers and controls merely creates new ways in which the powerful can oppress the powerless. These new powers simply won’t be in the hands of the poor or the powerless. It doesn’t work that way. It doesn’t matter what I want, what you want, or what any of us want. Reality is what it is. Today’s New York Times illustrates this point perfectly with two stories.
The first article mentions the astronomical levels of debt that Obama has imposed on future generations of Americans. The new debt for the year is $1.4 trillion. That is equal to 10% of the entire economy. The Times says the debt is currently $12 trillion and that the Feds estimate it will rise by $9 trillion over the next decade. Anyone want to bet it will rise much, much faster than that? In essence, Obama is bankrupting America, just like Bush was doing, only more so.
The second story looks at one major cause of the new debt—the bailout packages. Politicians said they had to have billions in bailouts for Bankers to help the Little Guy --- it’s always to help the Little Guy, of course. But justification for policies and the results of policies rarely coincide. The Times notes that while people are struggling to pay debts and keep their homes “much of Wall Street is minting money—and looking forward again to hefty bonuses.”
The Times explains why: “It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street is not the banks but Washington.” Ah, excuse me, but YOU WEREN’T PAYING ATTENTION. This is NOT a surprise but precisely what I expected. This is the rule of power: expanding power always benefits those who have power already, not those who don’t. Maybe this is a surprise to the staff of the New York Times, as they seem relatively naïve on the role of incentives in politics and markets. But this sort of “surprise” is precisely what advocates of depoliticized, free markets predict will result from such policies. The Times says that the measures taken by the politicians “helped set the stage for this new era of Wall Street wealth.”
And the concentrated forms of wealth on Wall Street are only becoming more concentrated.
A year after the crisis struck, many of the industry’s behemoths — those institutions deemed too big to fail — are, in fact, getting bigger, not smaller. For many of them, it is business as usual. Over the last decade the financial sector was the fastest-growing part of the economy, with two-thirds of growth in gross domestic product attributable to incomes of workers in finance.
Now, the industry has new tools at its disposal, courtesy of the government.
I am sorry the New York Times is surprised that the policies they helped promote had results contrary to what they wanted. Ignore reality at your own peril. The Left does that in economics all the time. I guess the Times would say: “Yes, but it shouldn't be that way.” Yep, reality is a bitch, so maybe you ought to start paying attention to it.