Wednesday, June 18, 2014

It's not the Corporations, It's the Government

Yesterday talk-show host Rush Limbaugh riffed off a piece in Redstate.com about crony capitalism.  Big business, you see, doesn't like Dave Brat and his populist anti-corporatism.  They are afraid that Tea Party populism could upset their relationship with their "strongest champions on Capitol Hill."

Look, I understand how business feels about this.  It's all very well for a Tea Party candidate to rail against bankers and demand that we put them in jail, but what are the bankers supposed to do when the government comes calling and demanding that they lend money to deadbeats?

So big business does what comes naturally.  It goes along to get along.

My poster-boy for this attitude is none other than folk-hero Warren Buffett.  Good ole Warren knows which side his bread is buttered on, as I wrote in 2010.  His insurance business makes a ton of money on life insurance for small businesses so their heirs can have cash to pay estate tax.  And he also likes to buy businesses when the principals die and the business needs to be sold quickly to pay estate tax.  And he's making a ton of money with BNSF oil trains while new pipelines like the Keystone XL are held up by coal-speculator Tom Steyer and his green friends.  Plus, did you notice, Warren just gave away a billion or so for abortion.

That's what you call taking care of business.

I maintain that business doesn't care one way or another what government does.  It just wants to stay out of trouble, and when government wants its help for, e.g., getting Obamacare off the ground, then business is perfectly willing to help, for a fee.

I have a friend that seems to get a lot of his news from Comedy Central Stewart/Colbert. And he fervently believes in the sins of the insurance companies and the banksters.  There's no doubt that insurance companies and banks are in up to their necks with the ruling class.  But that tells us nothing.  Why are corporations so interested in government?  It's simple: government is interested in them.

Remember Bill Gates?  He and Microsoft wanted nothing to do with politics until the day the federal government came calling with an anti-trust suit.

It's the old saw from Trotsky: You many not be interested in war, but war is interested in you.  Which means that you have to pay attention, whether you like it or not.

Yes, insurance companies are monsters that deny you coverage just when you need it.  And they are deep in Obamacare with the "risk corridors" that compensate them for losses in the transition.  But insurance companies have been regulated by government for over a century.  Why?  Because people get pissed off when the insurance company doesn't pay when they have a loss due to something-or-other in the "fine print."  But why did the fine print get there?  I will tell you why.  Because people cheat.

Yes, banksters are monsters that got themselves in a mess with reckless loans and derivatives in the 2000s.  And they oughta go to jail.  Just don't forget that the monetary/financial/credit system is dominated by government, starting with the Federal Reserve System and continuing to Fannie and Freddie the mortgage twins.  Due to lefty activists, the government set policy for Fannie and Freddie that forced them to increase loans to marginal borrowers.  It seemed like a good deal to the banks at the time because they could sell all their dodgy loans to Fannie and Freddie.  Then they started packaging mortgage loans to sell to European banks and pension funds and mitigating the risk with derivatives.  Yeah, but they should have known!  Except that if they didn't get into the profitable mortgage business they would have shown reduced earnings and been bought up by another bank, or something.

Look, I'm with Dave on this.  We've got to pull crony capitalism out by the roots. But we also have to realize that the problem isn't the crony capitalists.  The problem is the government, and behind the government the liberal ruling class.  And behind the ruling class are the ordinary Americans pissed off because life isn't free and demanding that government "do something" about it.

1 comment:

  1. "But we also have to realize that the problem isn't the crony capitalists. The problem is the government, and behind the government the liberal ruling class. And behind the ruling class are the ordinary Americans pissed off because life isn't free and demanding that government "do something" about it."

    Which means that Plato was right about democracy.

    ReplyDelete