Tag Archives: government expansion

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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Message From Europe

The election results are finally tallied from all the recent voting in Europe.  We already know the outcome of the California tax issues elections.  Seems that some one in Washington should start paying attention to these results.  The mantra has been around for a few decades that California leads the way in the US on all issues.  They do it first and then it spreads to the nether reaches of this fair land so the theory goes.  In economic, social and cultural aspects there has been a strong element of truth to that adage for a number of years.  Seems as though those Tea Parties carried a bit more heft than some of the politicians would care to acknowledge.   IsCalifornia leading the way again?

The California vote was not only against raising taxes it was also a referendum on the growth of government and the deficit spending that goes with that unrestrained growth.  There was a hue and cry that painful cuts would have to be made in State services if these issues failed even though the California government has added over 150,000 employees in this century already.  The voters get it and still didn’t want any increase in taxes and more expansion of government.  What particularly got my attention was the spread in the vote–the five issues rejected were voted down by virtually a 2 to 1 ratio.  That is a landslide in political terms.   The Washington crowd appears to be moving along blithely ignoring those results as though they didn’t happen.  That vote I hope is only a straw in the wind for a growing rebellion by the taxpayers against Government, Inc. and the desire of politicians to sop up even more of our economy into the maw of government like a cat licking the last drop of milk from the saucer.   It would be nice if all the planned US government expenditures were put to a referendum right now.  I wonder how well, TARP, PIPP, TALF, the mortgage rescue plans, the GM and Chrysler bailouts, the GMAC funding and the insane purchasing of Treasury bills by the Federal Reserve would do in such a vote.  Those guys spending our money might give a moment’s thought to the next election which looms around the corner with each passing day.  The health care plan alone will drown us in debt and higher taxes with no end in sight.  Everyone wants better health insurance but at what price?  

The European elections are even more interesting.  There was a decided lurch to the right by the Europeans across the Continent and the UK.  So many of our academics, pundits and politicians of the liberal wing have been wanting to emulate that European model in socialism and to expand the size and scope of our government and they must be disappointed.  Just as California leads the way in the US  many of our liberal friends they have always looked to the European model as the template for their game plan in the US.  The swing to the right was not isolated to only a couple of countries but was spread from the Dutch to Spain to the UK to France and Germany, Italy and the Scandanvian lands.  Those folks knew what they were voting for and it clearly was for putting the brakes on government growth and higher taxes.  It seems the socialist agenda is waning in favor among the voters of Europe.  They have always been much more “liberal” in social matters than we have been and they are accustomed to the government running and/or owning significant portions of their industries.  The European governments’ percentage of GDP has always been much higher than ours and now ours is heading in that same direction.  But the Continentals are backpedaling in a major way.  Apparently many of them have had about all that Mother Government they can stand and would like a little more freedom and lower taxes for a change.  It was quite strking also when analyzing the results that the left wing parties lost ground from previous years.  It was not only a growth on the right but a loss of the left that produced the rather dramatic European results. 

On immigration matters the Europeans are bringing to rein in their open arms philosophy and intergration policies.  Several of the anti-immigrant parties will have representation for the first time in the European Parlianment.  That is stunning given the history of Europe since the War.  They apparently do want their borders protected and don’t want to be “Balkanized” or “Islamified” as some of the papers stated it.  Maybe those in Washington calling for amnesty for illegal aliens will pay heed to this trend.  The Europeans are tired of their riches and generosity being abused by those who come there illegally. 

You are urged to do your own reading about these vital elections.  Reach your own conclusions.  The British are clearly pulling back from government expansion and higher expenditures and deficits.  Labor is on its way out.   That special relationship we have with them should be used as a learning tool for our politicians.  They are going one way and we are heading in the opposite.   That  is truly an astounding circumstance and only the second time in my lifetime.  Thatcher was the first.  Europe sent us our forefathers four centuries ago and maybe now they will send us lessons about taxes, size of government and restrained government from abroad.

“Any pary which takes credit for the rain must not be surprised if its opp0nents blame it for the drought.”   Dwight Morrow

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