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Why Sticking it to Big Business Sticks it to the Little Guy

Reality.

Call me quaint, but I believe we are obligated to conform our beliefs to the actual world around us.  It was chiefly on account of this that I felt compelled to take a perspective that we today call ‘conservative.’   There is the world we wished we lived in and there is the world that we actually live in.  Another way of putting this is:  people are as people are going to be and no social engineering will ever change what people are.

I begin this way as a response to those in the ‘Occupy Wall Street’ crowd.   Let me acknowledge up front that I take many of them to be sincere in their desire to help humanity (over against the ‘elite’ progressives and Dems who I think are chiefly concerned with power).  I also agree that many of the problems they cite are legitimate problems.    It is the nature of their solutions that I am chiefly take issue with, and it is there that we see that they are fundamentally out of touch with reality.

Let’s say you are a wealthy business owner and the people in your town think that the way you’re making your money is not socially acceptable.  The OWS folks, and leftists and progressives and liberals, etc, have one basic solution:  pass a law to regulate that person’s business to require social compliance.  At this point, the business owner, being an actual human being, will consider whether or not to comply with the law, or move to a jurisdiction where the law does not apply.

Now, for most of us, when faced with a burdensome law, we do not have the flexibility to simply pick up and leave.  Indeed, since most of us are busy just living out our lives, minding our own business, we are rarely even aware of a burdensome law until after it is too late to do anything about it, and frankly- if we’re honest- we usually couldn’t do anything about it, anyway.  Why not?

Again, the facts of reality set in.  We’re busy.  We have jobs.  We have families.  We have obligations.  We don’t have the time and resources to keep track of everything our local municipality is up to, let alone the state and Federal government.   Ah… but our wealthy business owner, if he is sufficiently wealthy, can position himself to be aware of what is happening to him legislatively, and more than that, can hire people whose sole jobs are to attempt to influence that legislation.

Come on, admit it.  If you had the money, you’d do the same thing.  But since you don’t have the money, you chafe at others doing it.  But the business person is only doing what a human in that situation can be expected to do.   Now, does the liberal mind recognize this fact and note well how in passing the first round of legislation the actually incrementally disenfranchised themselves?  Ha!  No, sir.  Obviously what is necessary is another round of legislation, another layer of bureaucracy, another committee, or whatever.  Right?

Now, each time this happens, another lever of power is created, and hence another point in the system where someone with means can attempt to influence how that power is asserted.   They, naturally (being humans acting as humans always will!), will attempt to influence this new legislation and this new level of bureaucracy in a way that will benefit them.   You would do the same, if only you had the means.

But here we recognize a new phenomenon.  As each new regulation is added on top of previous regulations, and new layers are created on top of old layers, and new oversight committees are created to oversee previous oversight committees, it becomes the case that our wealthy business owner will reach a point where he is no longer able to finance the kind of operation necessary to remain fully involved in the processes directly affecting him.

However, other wealthy folks- a corporation, perhaps- can.    And they do.  And this spawns yet another new phenomenon:  the ability of these more deeply connected entities to influence legislation so that it not only represents their interests, but can directly or indirectly undermine competitors.

What does the leftist say to that?  “The horror!  The horror!  What we need is a new law!  A new oversight committee!  More regulation!”  And our politicians, who never tire of pressing the levers of power and creating new ones to play with, happily comply.  The actual result is that the organizations they are trying to stick it to- big corporations, most notably- are presented with one more rung of the ladder that they, and probably only they, will have the wherewithal to climb.   At the same time, note what has happened to the individual, the sole proprietor, and the small businessman:  he has been left behind, disenfranchised by legislation by a thousand cuts, and subject to regulations that were influenced by competitors who no doubt protected their own interests.

In short, the Wall Street Protesters, and the left in general, has in its rage (at possibly legitimate wrongs), brought about the very circumstances that they deplore.  They brought the corruption on their own heads and in their mindless lashing about and emotional frothing at the mouth call for even more of what put them in that state in the first place.

Examples of these phenomena are rampant and everywhere, and bear all the marks of how the real world works.  For years, Microsoft did their worst and then the government got involved- next thing you know, Microsoft got involved in the lobbying business to the tune of millions and millions of dollars.  No wonder the new tech firm starting up in the guys garage had trouble making headway.    Google does the same thing.  You can be sure the huge toy manufacturers protected their interests when the new lead testing requirements went into effect (nearly putting out of business every thrift shop in the country overnight!) Monsanto, perhaps the most evil corporation that has ever existed, continues to trample on whomever they wish- and you can be darn sure that in the Food Safety Modernization Act they made sure their interests were preserved.

Who of you, my friends, have the resources to make sure that your interests are protected and preserved while the big boys were doing the same?  And you really think the solution is yet another layer of legislation and bureaucracy?

In saying all this, I am not necessarily arguing for no regulations at all.  I am highlighting the real effect of trying to solve problems in that manner.  I’m talking about the real effect on average Americans and small businessmen in determining their own course and making sure their own interests are protected and preserved.   People will be people, and will do what people do.  People with money who want more money will do the things that people will do when they have money and want more of it.  People without money and want more money may want to do certain things but will not be able to afford it.   By turning to additional layers of bureaucracy, they actually harm themselves- and worse, make it even more difficult to reverse the harm.

Nor do I wish anyone to think that Republicans have been all that great at resisting this trend.  But that’s another issue.

I conclusion, I would like to point out that there are people out there who understands how this works:  the advocates of the central planners.  What is communism except the acknowledgement that people will be people unless other people put their boots on the necks of others to prevent them from doing what they would otherwise do?

But at least they recognize the reality of how people will actually behave if left to their own devices.  That’s why they won’t leave anyone to their own devices… by using a gun, rather than a law.

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    • Alex (Patron Saint of the Confused) on October 19, 2011 at 8:32 pm

    When Jesus argued against the Pharisees; when he denounced rich people who ignored the concerns of the poor; when he told his critics that it was more important on the Sabbath for a hungry man to glean a little food than to obey the Sabbath laws; and when he overturned the tables of the money-changers in the Temple and, well, occupied it, was he “conforming his beliefs to the actual world around him”, as you put it, or was he trying to change the world around him?

    Occupy Wall Street people don’t have an issue with entrepreneurs and business people. It’s Occupy Wall Street, not Occupy Main Street. What they, and I, dislike is the fact that finance people, who create about as much actual value for the economy as your local snake-oil salesman, ran this economy into a ditch. When they were coming up with their credit default swaps and cubed-collateralized-debt-obligations and other elaborate financial instruments and thinking themselves so smart, they were not creating value. They were destabilizing the rest of the economy based on algorithms that they were too dumb or too self-interested to realize were flawed. They used their money to head off anything that would stop the merry-go-round before they had time to make their pile on it. The money they used, and the salaries and bonuses they garnered, came from your and my savings, pensions, and mortgage payments; and hardly anybody has been brought to heel for any of this by a lickspittle Congress that depends on Wall Street for campaign donations.

    I don’t chafe at people giving money to campaigns. I chafe at them giving money to campaigns and thereby screwing over you, me, and the rest of us. It’s natural, sure, in the way that it is natural for a psychopath to stalk and kill his victims; that doesn’t mean that we should declare stalking and killing A-OK.

    What you seem to be articulating is your deep distrust of using government to achieve anything, at all, ever, to improve anything about our common life together in this country; and your feeling that the malevolent impulses of the human heart will trump any effort to legislate morality. It is always possible that it will, but the examples of it not doing so are also many.

    To take a canonical example, blacks are now able to vote because the government intervened and made it happen, and the fact that people in government cared enough to intervene in itself had a partial and beneficent effect on humans’ hearts. There may well still be many people who feel in their hearts that black people should not have the vote, but that is no longer part of our public culture, and we are better for it. Government shapes culture, and culture shapes hearts, just as much as hearts and culture shape the kind of government we have.

    Recent study of the millionaires’ tax in New York state suggests that, of the billions of dollars it raised, a mere 0.6% was lost by millionaires decamping for other states. Millionaires are less mobile than you might suppose, and taxation is only one among very many factors that affect their choices of where to live.

    Regulations do indeed get captured by large players, and genuine small businesses have no good voice in Congress – the US Chamber of Commerce has become a shill for large businesses, not for small ones. But you should recognize Occupy Wall Street for what it is – an attempt to articulate the voices of those who do get shut out, and to serve as a counterweight to the enormous influence of large corporations.

    It is possible that you are right, that the Republic is lost, and that we have now no choice but to knuckle under the rule of a Corporate State; but let us try saying No first, before the light goes out.

    The truth is that we have seen so little of organized power among the non-rich in this country recently, that it is hard to recognize that already, after one month, a little of it is making oligarchs sleep a little less easy. There are, after all, far more of us than there are of them, and we all still have one vote apiece.

    As an analogy, my work to help girls in Africa is an idealistic work, and your work to help people understand Christianity is an idealistic work. There may well be people who scorn what I do or what you do as being naive and that we will never really change anything. But I can see in my work, and I believe that you can see in yours, that that is not so. Small efforts can become large efforts and can make real differences in people’s lives, and whether it is done in government or out of it, that still holds true.

    So, what you describe as “communism” is in reality nothing more than the old American proposition that nobody, even if they are rich, should be above the law. If these folks broke the law, then I don’t care how many billions they have or how many houses in the Hamptons they have. The politicians may be too frightened to cross them, but that doesn’t mean that the people have to be.

    • Kathy on October 20, 2011 at 6:29 am

    Alex, I enjoyed reading your thoughts. I will be reading through it a few times since there’s much there. One statement you made stood out to me that I’d like to comment on and then generally comment on OWS.

    “There may well still be many people who feel in their hearts that black people should not have the vote, but that is no longer part of our public culture, and we are better for it.”

    Sounds like I’m taking a bunny trail here but it is relevant to the topic. Since there “may well still be people who feel in their hearts that black people should not have the vote”, isn’t it true that these people may have an internal anger or rage in their lawful compliance to acknowledge the right blacks have to vote? And this is what concerns me about OWS.

    God and government has given us freedoms. The government, through the 1st amendment, has given us the freedom of assembly. How does our God-given freedoms line up with this? I think about what the Apostle Paul said: “All things are lawful for me, but not all things are profitable.”

    No one argues the “right” OWS has to assemble. I question the internal; the motivation. By all indications, it appears primarily an opportunity to express one’s frustration and anger. There’s more here than big business vs. small business and all the perks or lack thereof that is attached. There exists a myriad of incoherent demands including forgiveness of college debt, halting all foreclosures for the unemployed, sick, and elderly, and reinstatement of the Glass Steagall Act.

    That said, what is the goal here? To ultimately overthrow the US government? An imperfect government, an imperfect system of economy and business, yet, in comparison to the suffering in totalitarian and dictatorship nations, the protestors appear to be spoiled brats.

    • Alex (Patron Saint of the Confused) on October 20, 2011 at 7:08 am

    Kathy,

    Of course the goal is not to overthrow the US government. Why should it be?

    The people participating in these protests want very much a government that serves the interests of more than just the very wealthy and privileged, but it is quite possible to achieve that within the Constitutional setup we have.

    As for whether they are angry – people don’t go out and “petition their government for a redress of grievances”, as the First Amendment puts it, because they feel a sense of gentle and mild disquiet at how things are. People do it because they have grievances. And that is all right too. Anger is understandable. Violence is not, but these seem on the whole to be very peaceful demonstrations, with any violence tending to come from the police rather than from the protesters.

    I do not think it is unreasonable or spoiled for them to want a government that works for them. You can always find a country where life is harder – why bother protesting here at home when thousands of women are being raped in the Congo? – but that argument would be a recipe for always submitting to your government in all things, which is emphatically not American.

    The great promise of this country is that if you work hard and play by the rules, you can make a good life for yourself and your family; but here we are in 2011, and there are many, many people who are working 50, 60, 70 hours, and barely keeping their heads above the water, one illness or one family crisis away from destitution. Meanwhile, they see that the very wealthy – the oligarchs – run very few real risks, and are utterly insulated from the consequences of their own actions in crashing the economy. It is one rule for the rich, and another for the poor. Is that really the kind of America that we want to have?

    It’s not a choice between exactly the society we have now, and some species of totalitarian dictatorship. It’s a choice between the society we have now and a society that, while still capitalistic, is less gratuitously cruel to the sick, the poor, the unemployed and the old.

    • Kathy on October 20, 2011 at 3:27 pm

    Alex,

    True, the goal is not to overthrow the government. Yet, the buzz is that the protestors do not have leadership and many are unclear as to why they are protesting. They’re just upset and frustrated. If the protesters grow in number and of course the movement is expanding to other cities, the potential is there for their anger (which I agree is understandable) to turn into something more. Should we not assemble because of the “risk”. No. But I think it’s clear that it’s easy for riots to break out when anger and frustration is mixed with poor leadership and vague goals.

    Secondly, I actually think it’s helpful to compare with other governments and nations. It kind of separates the men from the boys since in this mix of protesters, surely there is a good number with the entitlement mentality.

    Lastly, it is not a great promise of this country that if you work hard and play by the rules you will apprehend the American Dream. It is a great opportunity provided to everyone. Life isn’t fair. So the answer is for this 99% is to forgive their college debt? To halt foreclosures?

    Kathy

    • Kathy on October 20, 2011 at 5:30 pm

    I would like to add that in light of Gaddafi’s death, we are not only face to face with a regime that exemplifies cruelty, but his “hidden billions”.

    Now there is a real reason to occupy and protest.

    K.

    • Alex (Patron Saint of the Confused) on October 21, 2011 at 5:36 am

    Hi Kathy,

    Life is on the whole not fair, but societies can be consciously structured to be relatively more fair or relatively less fair. America is a country that has been attractive to others around the world partly because it was perceived as offering people a fair opportunity to get ahead.

    Part of the purpose of government is to set up fair and consistent rules for everyone to play by, and to set minimum standards of what we will and will not allow to happen. We do not, for example, allow people to die of starvation in this country, whether they can support themselves or not. We do not arbitrarily torture and murder people, even if we disapprove of what they do. The Bill of Rights embodies some limits beyond which it would be unfair for us as a society to go; Social Security, Medicare, Medicaid and the VA embody others. Simply saying “Life is not fair”, without also specifying basic and commonly acceptable standards, legitimizes every kind of abuse.

    On foreclosures, it is certainly true that there are people who unwisely took on more house than they could afford. It is also true, however (and I speak from some experience, because I worked in this industry at the time), that there were many mortgage brokers out there, like Countrywide, who sold people mortgages caring not a whit for whether the borrower could repay. Mortgage brokers got a commission for selling the mortgage, and then the mortgages were routinely sold to someone else on the secondary mortgage securitization market. They therefore had no incentive to make good loans, and every incentive to make bad ones and get as many commissions as possible. So they roped in thousands and thousands of people whose financial literacy was truthfully not that high, and who heard radio ads and saw TV ads suggesting that they could afford a home and believed them, when really they couldn’t.

    Then, on top of that, the mortgage securities were sliced and diced and resold to investors – pension funds and cities and so on – as triple-A-rated 99.9%-reliable investments, when in fact they were very vulnerable to a downturn in the housing market. In the heat of the boom, firms sold these securities as great investments to some of their smaller clients, having structured them to fail, in order to make a profit for themselves and for other larger clients. Finance people made a killing from defrauding the rest of us, and nobody has been punished for any of this.

    Now, what we have is millions of people who are trapped in a cycle of debt that they can’t escape. With so many people struggling with their debts – mortgage, credit card, medical and student debts – they cannot provide demand to businesses, and the economy cannot revive. It would help economic growth to reduce that burden on borrowers. It may seem politically unacceptable to allow it, but our politicians were very quick to bail out the big banks when they thought it important, weren’t they? Why is it “necessary” to help big businesses socialize their losses, but “socialism” to lend a hand to ordinary people?

    On the costs of education, let’s remember too that the costs of education are much, much higher than they used to be (along with the costs of many things). Economists are pretty much agreed that the GI Bill of the 1940s gave an enormous boost to the economy, by creating a more educated workforce at government expense. Yet nowadays, we expect poor people to somehow shoulder the cost of education up front, while they are receiving it, and go deeply into debt in the hope of getting good jobs that right now really aren’t out there (there are five or six job-seekers for every job).

    Why not, for example, instead of forcing people to pay up front for their education, charge them for it on the back end by doing like they do in New Zealand and instituting a “graduate tax”? (This is where college graduates, once they have received their education and have gotten a job, pay down their tuition through an additional payroll deduction). What is wrong with that, and what is moral or necessary about plunging people into debt up front? What is moral or necessary about hitting people (even people with insurance) with massive medical bills for conditions that they have done nothing to bring on themselves?

    I grew up in a very poor family. I got scholarships for my education, and we were foreclosed on when I was in my teens. We lived in a bad neighborhood, and I got myself out of it through luck and hard work. The best universities in the world were willing to offer me full rides for me to attend them, and without full rides, I couldn’t have gone.

    It’s not a just society where it is only possible to rise out of the circumstances you were born in if you are very smart and very hard-working and very lucky. It’s a just society that offers a reasonable chance at a decent life to people who are reasonably hard-working. We are too far from that right now, and it doesn’t have to be that way.

    We have focused too much on relieving the burdens of the very rich. We have spent ten years reducing their taxes and regulations in the hope that some of their increased wealth will be passed down to the rest of us. It hasn’t worked. Doing more of the same, and believing that if we just reduce their taxes a little more and regulate them a little less then somehow there will be a flood of decent jobs again, seems like craziness to me.

    Last, it does not seem that the Occupy protests are becoming violent. Their movement is a “leaderless” one, and their decision-making is highly consultative. If they do become violent, then let’s have that discussion; but we shouldn’t be condemning them on the basis of things they haven’t done yet.

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