The Only Thing New is That They’re Getting Away with It
I need to return to Adam Smith’s quote from last time. It’s so accurate it’s incredible. First the quote:
“The proposal of any new law or regulation of commerce which comes from this order [merchants and manufacturers], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.” (Wealth of Nations, Book 1, Chapter 3)
All by itself this stands as rebuttal to the Republican Party’s standard argument: “We’re businessmen, so we’re good for the economy.” It seems businessmen are not so benevolent. Let’s look at the record — Adam Smith could hardly have been more to the point.
I’ll start with Obama’s first term. George Bush left a mess so bad that it is only partially acknowledged. The stock market crashed and the economy was shutting down (basically from what amounted to misguided deregulation of the overall banking system). But that wasn’t the whole story. Hidden behind the smokescreen of “neoliberalism” was the fact that essentially all of the job loss to China occurred either during Bush’s administration or with their crash. Just look:
That’s no accident. The Bush people refused to resist China’s trade practices, because they were actively promoting off-shoring — since that’s what business wanted. In this case it’s tempting to say that “deceived and oppressed” is coupled with pure incompetence, but that actually misrepresents a situation that Adam Smith understood perfectly. Both the deregulation and the off-shoring were cases of business getting what it wanted without the necessary “suspicious attention”.
Obama’s job was to get us out of that mess, and he was well-underway when Republican decided that he might succeed. That could not be allowed, since there was an election coming up. So with the fabricated excuse of the “balanced budget amendment” rhetoric they essentially shut down government including all stimulus to the economy. That meant jobs and income for many people. They also blocked any aid to the millions of people who lost jobs from Bush’s off-shoring. “Deceived and oppressed” is right on.
Now we get to Trump. The “balanced budget amendment” language disappears instantly, and was replaced by a tax cut funded by a 2 trillion dollar deficit. That was going to cure the last part of the recovery they had sabotaged. However the economy was actually in pretty good shape, and (as noted last time) the only stimulus that Obama ever got past the Republicans (in his first term) was on the order of $500 billion. This needs to be emphasized. We read articles about governments in Africa where department heads steal millions by handling their budgets as personal slush funds. We in the US don’t do things like that. We’re much more civilized. The Republican Party stole 1.5 trillion dollars of benefits for its owners quite legally from the American people. ”Deceived” is the very least you could say.
That money went straight to Wall Street. It inflated corporate profits, so stocks went up. But the companies didn’t spend that money on employees or the business, they used it for stock buybacks — a second kick in the pants for the market. For the people in Adam Smith’s quote all you can say is-what a wonderful world this is!
And they’re ready to do it again. They’ve made up the fiction that inflation is all due to spending money for the benefit of the population. Can’t do that. Bad idea. Have to give it to us, and it will be Nirvana.
The next deficit is estimated at $4T. Republicans have signed-on salivating — Will wonders never cease? But that’s not the end of it. This set of proposals is wildly inflationary, potentially as damaging as what trashed the economy under George W. Bush — again without the necessary “suspicious attention”. All of us have to hope it doesn’t happen.
Adam Smith did his job. Can’t say we weren’t warned.
Originally published at http://ontheoutside.blog on September 15, 2024.
