D. C. –Central Command and Control For Economy

The progressive march toward D. C. controlling greater portions of our economy has been moving steadily forward since the time of FDR.  There have been a few short eras of retrenchment but the floodgates were opened when the Supreme Court adopted a “no limit” on the interstate commerce clause of the Constitution in the ’30’s.   Since then it has been pretty much anything that Congress wanted to enact became law regardless of the restrictions of the enumerated powers or the Tenth Amendment.  The safety net programs started in the ’30’s have exploded not only in size but scope.  The size increase is at least understandable due to our increase in population but the expansion of programs isn’t due to population growth but rather an attitude that government should control more of our lives and economy.

Naturally, once you control the economy you pretty much control everything of significance in people’s lives.   That continuing explosion of government power has been relentless.    Fifty years ago we only had half as many Cabinet positions as we have today.  That alone should tell you something.   The bureaus, agencies and administrations has grown like the proverbial mushroom in the dark overnight.   History is replete with examples of centrally controlled economies and the results of same.   You might think that Rome was the earliest example.  That would be partially true but the fact is that Rome only gave fairly broad requirements to the outer provinces and left the local economy pretty much on its own and the administration to the local Proconsul.   Rome would give a list of needs in the form of monies or goods it expected to receive and the details of delivery were left up to the local folks for the most part.   Likewise the British at the height of its empire under the Mercantilism method pretty much left local matters to local folks.  Social welfare issues were left up to the local counties and squires.  Britain did move toward a much more centrally controlled form of economy after WWII and the results were disasterous for several decades.  Look at the statistics on any basis you want from after the War to Thatcher and you will see that the economy was in the doldroms for that entire period of time.  The spark of innovation and incentives were missing during this period of time.  Businesses languished and in consequence the need for even greater welfare and social spending grew because the economy was not expanding and thus the job creation machine was not running at full capacity.

Naturally the clearest examples of centrally planned economies were those in the Soviet Union and China.  There all decisions came from those in power and were sent out to the hintelands.  It made no difference if the policies in Moscow were ridiculous for the nether reaches of that empire they had to be enforced.  The unintended consequences mounted and mounted over the years.  Actually WWII probably kept the Soviets in power longer than they would have been otherwise because it was such a traumatic event that people were concerned with mere survival rather than a “better” life.  That system had no incentives whatsoever and the lack of consumer goods and services in the Soviet Union were legendary.  What products they did produce were of poor quality and and the services were indifferent at best.  Read Solzhenetzin’s Cancer Ward to get a flavor of that era and what it means when all decisions come from far away and are made by the elite for the alleged good of the common man.

Our energy sector has been controlled by government for decades through regulation and tax policy.  Even if the government didn’t own outright positions in that sector it dictated policy.  Now that control is even more pronounced with the FERC and the new cap and tax proposals will hog tie one of our most productive and job producing industries.  It is the industry that is the most vital.  No modern economy can function without abundant energy.  Not merely enough but abundant.  That proposition cannot be gainsaid.  Government, Inc. controls throught ownership and regulations all our major banks at the moment and that gives it tremendous control over the entire economy.  If you control the banks you control who gets loans and who doesn’t and thus what industrial sector will thrive or whither on the vine.  At the moment 80% of all residential loans are made or insured by the government.  That is not good.  They control home ownership with that power rather than a free market and real world financial worthiness of borrowers and the risk assumption factor by lenders.   With GM and Chrysler owned and run by the government we have another important and large section of the economy controlled and run from D. C.  They will determine which unions are recognized, what cars will be built, pricing for our cars and even control the lending for those cars through GMAC which is government owned.  You might find it interesting that under the lending agreement with GM the current administration found that GM was a “financial institution” fr justification to lend from the TARP funds.   Of course we now face the prospect that Government, Inc. will soon control our health insurance and health care decisions from D. C.   That prospect should frighten any thoughtful person.  Even if you want everyone to have medical treatment why does everything have to be controlled from Washington?   What could be more personal than that.

People ultimately get the government they deserve.  If we truly want a government that dominants our lives and our economic welfare then it seems we will have that for a while.  Many aren’t ready to surrender their freedom yet for the yoke of government care.   Those views are at the opposite spectrums of the graph and perhaps we should acknowledge that and consider and peaceful parting of the ways.  Those two views of America can’t be reconciled, parting is such sweet sorrow.   www.olcranky.wordpress.com


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Filed under business, Economics, government, history, Socialized Medicine

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