Libertarians, Tea Parties, and Economic Plumbing
I’ve been on a zero-growth economics kick for some time now, but it’s led me down a few other related paths: the role of Libertarians, the co-opting of Tea Parties, and the need for patching all the “leaks” in our economic plumbing.
Libertarians
First, Libertarians. Free-marketeers are anti-regulation because they feel that government’s role in regulation is a disruptive mechanism in what should be a self-correcting system. I understand this and agree, to some extent, for the reason I explained in this post. I could never be a true Libertarian because I’m big on wealth redistribution. To the poor and the weak, no less. The problem I have is that the current system favors the wealthy so that they are protected against risk. All those bank bailouts — instead of homeowner bailouts — are a clear indicator that the Fed favors saving the system from the top of the pyramid. As David Harvey points out in this most acute assessment of the current situation, the government could have worked to establish a corporation to buy troubled mortgages from homeowners:
DAVID HARVEY: I would take a lot of that [bailout] money, and I would put it into some kind of a national reconstruction corporation. And I would say, “Look, your first duty is to take care of the foreclosure crisis and the people who have been foreclosed upon. So go into cities like Cleveland and so on that have been devastated, and go into sort of areas in California and so on and take care of the foreclosure crisis.”
AMY GOODMAN: How would you do that?
DAVID HARVEY: Well, I think one of the ways you could do that is to start to buy out all of those houses that are about to be foreclosed on and put them into some kind of, I don’t know, municipal housing association or some collective form of that kind, and then allow people to remain in those houses, even though they’re no longer necessarily owners. So the ownership rights would shift.
Libertarians hated bailouts and wouldn’t have approved of bailing out anyone. Supposedly near to Libertarians on the political spectrum are right-wing Republicans, which brings me to Tea Parties…
Tea Parties
Sadly, the initial urge to protest against the bailouts was probably the voice of the regular citizens who objected to the government bailing out that top tier, the bankers who are already ridiculously rich. But the media machines (also corporations) realized this was a flaming fear-mongering opportunity to generate the type of noise that brings in viewers. So, they co-opted the tea parties and turned them into anti-Obama hate parties. It’s really a shame because our federal government could use some push-back for siding so blatantly with wealthy elites. We do need a citizen movement to rein in the power of the federal government. and especially, of Wall Street. Another quote from David Harvey:
Finance controls both the creation of housing, the production of housing, and also its consumption. You lend money to the developers. They go in and gentrify a neighborhood. You lend them money to the people who are going to occupy it. And even if they don’t have—you’ve got to find that market for the gentrification once that process goes on. And so, the connection there in this, the financial operators are working on both ends of this game
David Harvey calls himself a Marxist Geographer, which sounds a little nonsensical, but the man makes some good points simply by looking at things from an outsider’s perspective. And now, for my final gripe of the day, economic plumbing.
Economic Regulation: Patch the Leaks, Stop the Siphoning
Zero-growth economics has no current working model other than communism. Communism is unrealistic, often really ugly. Huge problem with sharing and our competitive nature or something, eh? But we’ve reached the point where we need to stop consuming, so… can we have growth without consumption? Can we have a .05% growth rate and still have a working system? Is a no-growth system possible with a burgeoning global population? Hmmm, lots of questions regarding viability.
In the meantime it would be great to at least improve our current form of mixed capitalism to ensure stability. If you’d like to see our system support jobs, keep our savings safe, and support homeownership again, we need to close up the places in our economy where investors, traders, and hedge-fund managers live: shadow banking, short-selling, currency trading, credit-default swaps, etc. I do not have deep knowledge of how these things work, but I think I understand that these areas of finance and investment are forms of creating wealth where none actually exists. This creation of false wealth devalues the real wealth of labor and goods, in essence, sucking the health out of our system. The trouble with too much financial liberty, ala Libertarians and strict free market capitalism, is that some jerk always figures out how to game the system and screws it up for the rest of us. Sometimes, like, say since Glass-Steagle was repealed, it’s a whole industry of jerks.
Hence the need for industry regulation. Adam Smith’s invisible hand is just too simple a metaphor. What we need is an even more ridiculous metaphor. Plumbing! Money travels through pipes, yeah. And the pipes leak, see? And then the leak grows into a big puddle and fails to… uh… trickle down. And then a bunch of parasites start to live in the puddle. I could go on and on! But hey, you get the idea. Clean pipes, clear channels with observable paths, a fixed, closed system that’s extensible, and begins at the source: real, actual goods and services. True capital.
Why I am Slowly Becoming a Progressive Libertarian
I strolled over to Cato Unbound yesterday for some fascinating reading. I found this month’s Lead Essay entitled Corporations Versus the Market. These guys are Libertarians, and I thought I was reading just to get a different perspective on things. On Facebook, some friends and I have been having a discussion about Red States versus Blue States, which led into a discussion about illegal immigration, and finally to corporate profits. With a newly elected Obama, I think we all need to reassess. The Bush years exposed the so-called conservative Republicans as none-of -the-above. The spending and federal bloating were out of control.
The fascinating thing about the Cato essay is that I found that I agreed with all of it. The essay argues (I hope I am paraphrasing accurately) that our current system is actually a huge promotion of corporate welfare via bailouts, subsidies, protectionist tariffs, and even the use of eminent domain for corporations. We don’t have a “free market.” If we did, we’d see lots more small and local businesses and fewer big-box and national chains. Government policy protects these businesses. They don’t really occur naturally. (I suppose by “naturally” I mean in a truly free market economy.)
This environment of the federal government favoring large corporations, combined with the federal government taxing us hugely, has led to a worldview that expects the government to redistribute wealth because we have neither control of any spare income (which instead goes to federal taxes) nor control over huge bureaucracies like in the case of the healthcare industry.
Here’s a real world example. I have been working for the past year to establish safe routes to school for our local elementary and junior high. I petitioned the city to improve signage and reclaim roadway on a very narrow and very high-traffic stretch of road. This is (IMHO) a traditional obligation on the part of local government: ensure safety for local residents on local roads.
But the city won’t help. Why? They told us to go get a federal grant to pay for it. The federal government’s reach into all areas of civil life has undermined our power as local citizens to have an impact. Not good!
So there it is. Duh pookie is now a Progressive Libertarian blog! I keep laughing to myself about how I just became a “compassionate conservative”!! I’d love it if there truly was such a thing.
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