Thursday, June 18, 2009

Is Government the enemy?

Many Americans think that. On April 15, tax day, a national organization held a series of “tea parties”all over the country to commemorate the colonists' resistance to government and specifically to taxation. They are planning more events for the 4th of July. At present, the Republicans in Congress are are resisting the proposal to have government provide health insurance for some Americans. Anything done by the government, they believe, is worse than anything done by private business.
This is an old belief among Americans. The authors of the Constitution wrote that document after having successfully freed themselves from the British government and established their own. The political system they created is very concerned to preserve individual liberties against government attempts to limit freedom. It is, we think, a good system. Citizens have elaborate rights to a protest, to tell the government what they think. The leaders of the government are elected; they hold their jobs by the will of the citizens and can be removed from office if they ignore the citizens' wishes.
These are important institutions, but our country has changed fundamentally since the end of the 18th century. Then a citizen's freedoms were threatened by the government and by lawless fellow citizens. We face a third and much more formidable threat today: big business.
In 2005, WalMart had annual sales of $312 billion. In the current fiscal year the budget of the state of New York – one of the larger states in the US-- amounts to $120 billion. Wal-Mart is almost 3 times as large an enterprise as the state of New York.
The governor, the legislators, the attorney generals, the mayors, the city councils, and other officials are elected. They are therefore subject to a certain amount of control by the citizens. What happens if you don't like a policy at Wal-Mart? Who do you write to? The people who run Wal-Mart are not elected. They sell $312 billion worth of goods every year. So they don't really care a lot what you think.
Things get much worse if you actually work for Wal-Mart. Wages are notoriously low. Employees who try to organize unions get fired – even though that's illegal. The employee has nothing to say, nowhere to complain. The Constitution guarantees all citizens the right to assemble peacefully, that means that we have the right to organize; citizens have the right to petition the government, that means, to say what bothers them. Employees of Wal-Mart do not have those rights. If you complain or try to organize you are out the door. Its like living under a dictatorship. The greatest threat to individual freedom are big employers.
Private business, the enemies of government say, is much more efficient. To be sure, government bureaucracy is horrible. But have you ever tried to get your insurance company to pay for a medication, prescribed by your doctor, which was not on the insurance company's approved list? Everyone has horror stories about the inefficiencies of private insurers.
Everyone knows that. Why do people nevertheless keep coming around to say: don't trust the government, trust private enterprise? Look again at the Republican objection to government insurance. Republicans regularly speak for the interest of large business. The large insurance companies do not want to have to compete against the government. That might be bad for the almighty bottom line. Big business has always been opposed to what they call “big government” because government has had the job of enforcing antitrust legislation passed by Congress at the request of ordinary citizens. If it were not for the government enforcing wage and hour legislation, if it were not for OSHA enforcing (sometimes) health and safety standards, if the government did not limit the hours that children are allowed to work, if the government did not protect workers as imperfectly as it does, you can imagine how much more oppressive ordinary employment would be.
Big business does not like the government protecting workers. Big business does not like the government trying to clean up the environment polluted by business. Big business does not like the government supervising, however imperfectly, the formation of huge companies that have too much power. And so they keep harping on the evils of “big government.” But if you think about what your citizen's freedoms are in relation to the government and what your freedoms are in relation to your employers, may be government doesn't look quite so bad. You have to admit that the greatest threat to individual freedom comes from the folks you work for.

Wednesday, June 3, 2009

General Motors goes bankrupt

Congratulations, Ms. and Mr. America. Overnight you have become industrialists. You are now owners of what used to be called General Motors, and perhaps should now be called US Motors. GM went bankrupt and now the US gov't—your and my government—owns about 60% of the company.
But then something really odd happened. The man who looks after our interests in Washington—at least that's what he is supposed to do—Barack Obama said that he is not interested in running GM. I presume that means that the previous management will continue to be in charge.
Imagine this: suppose you can't pay your mortgage and the bank repossesses the house. But the bank says “We are not interested in doing anything with that house.” So you stay there, you keep mowing the lawn and tending the flowers. You clean the house and make repairs where needed. The bank is not exercising its ownership rights. It is not taking real possession of the house. In fact, it looks as if it just gave you a chunk of money by allowing you to live in the house even though you are not paying the mortgage.
But of course we are dreaming. Banks don't act that way. If you don't pay what you owe, the banks takes back the house and you have to leave and move back in with the in-laws. There is no such thing as free rent.
Except if you are General Motors and you are in hock for billions of dollars to Uncle Sam.
That strikes me as fishy. The American tax payer—not Barack Obama—has given GM billions of dollars. GM now belongs to the American Taxpayer. But the folks who are elected to mind our affairs refuse to do so. We don't want to run GM, they say. All they want to do is to give GM billions of dollars of our money.
Maybe we should send letters to the White House saying “Barack are you minding the store? First you buy GM with our money and then you don't want to take possession what you just bought for us. This looks a lot like giving our money to General Motors without any return.”
It looks like one more example of different rules applying to big corporations from the rules that apply to you and me. If you or I go bankrupt, we loose the house. If GM goes bankrupt they get to help themselves from the public till—to our money. You figure it.
Who is the President working for anyway: ordinary voters or global corporations?