Reader Scott raised a great point recently about the Occupy Wall Street movement. Scott challenged me to point out specific examples of where the Movement advocates more big government. As I replied briefly yesterday, the official Movement has in fact been very understated regarding its demands.
The three main demands as far as I’ve been able to determine are getting money out of politics; reinstating the Glass-Steagall Act — the 1999 repeal of which removed the separation of investment banking and commercial banking functions thus vastly increasing the severity of the 2007 financial crisis; and closing the loophole that allows members of Congress to pass legislation affecting Delaware-based corporations in which members themselves are investors.
Reinstating Glass-Steagall and closing what I’ll call the “Delaware loophole” seem pretty reasonable and while the latter may seem at first to be a pretty obscure issue, check out this 60 Minutes piece on our elected officials trading on inside information, and (after you wretch) you’ll hopefully agree that the necessity of such a repeal seems self-evident.
Getting money out of politics is a little more problematic from where I sit. Whose money do we get out of politics? Corporate money? Great… But what about labor unions? What about government unions like AFSCME? What about foundations that spend hundreds of million of dollars to influence public policy? What about money from special interests pushing for even bigger government and more social spending for their pet causes?
The big challenge for the Occupy movement as I see it, is that it’s in danger of being hijacked by all manner of hangers-on who do advocate for an even more expansive Savior State. Take a look at these demands posted on the Occupy site – yes, I know that these aren’t official demands of the Movement itself and may have even been posted by a provocateur, but it’s naïve to think that this type of thinking isn’t prevalent among many of the Movement’s sympathizers and supporters.
I’ve said before that the real problem we face as a society is the cause of “bigness” – big government, big business, big labor – a system of economic tripartism in which business, labor and the state conspire in the setting of economic policy that more often than not protects them, while screwing the rest of us.
This manifests itself most often in a progressive corporatist mindset that has nothing to do with free markets, but instead organizes the world into dominant interest groups and business monopolies in order to divide up the spoils. The result is the vast regulatory state we “enjoy” today in which business and government use the regulatory process (with the full, if perhaps unintended blessing of many progressives) to keep out those pesky upstart competitors.
Early progressives in fact, didn’t much care about trust-busting… They were more interested in making sure competing businesses combined or merged to create more efficient monopolies. Progressives then pushed for heavy regulations on these new corporate monstrosities – regulations that monopolies had the size and scale to easily comply with, but that were devastating to potential competitors.
JP Morgan himself was described by his biographer in 1911 thusly;
“Mr. Morgan has stood in a unique way for the principle that capital must always organize and do away with internal friction, war, waste, among its factors and segments. He has been the great Progressive among capitalists.”
So how does progressive corporatism manifest itself today? Let’s revisit JP Morgan for a second. Most people probably don’t know it, but according to The Economic Collapse Blog, JP Morgan makes bigger profits whenever the number of Americans on food stamps increases. Why? Because the good progressives at JP Morgan contract with the federal government to issue food stamp debit cards in 26 states and Washington DC. The division that issues the debit cards made $5.4 billion in net revenue in 2010.
Doesn’t it go without saying that JP Morgan has a big financial incentive to keep the number of Americans on food stamps at record levels? Of course it does. But what about the government? Here to, the Obama administration is doing its part, offering $75,000 grants to groups who can come up with “effective strategies” to increase participation in the food stamp program. U.S. Agriculture Secretary Tom Vilsack goes so far as to suggest that getting more Americans enrolled in the food stamp program will be a great way to “stimulate the economy.” Complete balderdash…
When the economy was booming, the JP Morgan’s of the world enslaved us in debt by working hand in glove with the Bush administration to push dubious egalitarian (and progressive) notions about “home ownership for all.”
When the mortgage Ponzi imploded, Wall Street convinced the Bush and Obama administrations that the sky was falling and we’d all be doomed unless we bailed the bankers out. Wall Street and the government conspired to socialize the losses among all of us while allowing Wall Street to privatize the gains.
Now when we are so down on our luck that we’ve become dependent on the Savior State for handouts, the JP Morgan’s of the world step into the void yet again, working with the Obama administration’s progressive Savior State thinkers like Secretary Vilsack to push food stamp debit cards.
Progressive corporatism is irrespective of party. Democrats and Republicans are equally as guilty of propping up a corrupt system that hides behind “free market” rhetoric, but offers solutions that are anything but. That’s why it’s so dangerous.
I suppose it’s possible that the Occupy movement gets this, but if so, they will have to do a much better job of distancing themselves from some of the more toxic progressive thinking that plays right into the hands of big government, big business and big labor.
