krebscycle

Look past the hype: elite “conservative” economists and ideologists from AEI and Chicago University and similar places  favor  enormous and intrusive governments and burdensome public debt and are deeply afraid of free markets. Their support for small government and free markets is an advertising gimmick that is designed to deceive the rubes – from tea partiers to the silly people who write editorials in newspapers.

It’s a plain historical fact that the  prosperity of the United States has been built on public investments in infrastructure and public planning for industrial growth. From the manufacturing protecting tariffs and military investment to protect shipping made by Thomas Jefferson’s administration, to the federal investments that paid for the development of the integrated circuit and the internet, America grew rich because the democratically governed republic invested in the economy. These investments created the conditions for the flourishing of private enterprise. James Madison justifying an early policy of protecting US industry against British competition, wrote that “However wise the theory may be which leaves to the sagacity and interest of individuals the application of their industry and resources, there are in this, as in other cases, exceptions to the general rule.” But over the last 40 years, through Democratic and Republican administrations, conservative ideologists have been successful in forcing a radical change. And a recent report from the American Society of Civil Engineers shows the result – American public infrastructure has grown so old and feeble that the foundations of our prosperity are collapsing.

While the teaparty members may not know any better, elite conservative “economists” surely know that public investments built the Erie Canal that originally made New York State an industrial power, the railroads that tied the country together, the interstate highways, the internet, and the education system that made the US the center of world technological innovation. In fact, we can see from their actions, if not from their words, that elite conservatives are not opposed to government economic policy. What the elite conservatives oppose is democratic control of public investment in the economy.

During the Bush administration, we saw what conservatives really mean by “limited government” and “free enterprise”

• No bid contracts for connected companies.
• Radical change in the legal system to benefit major corporations at the expense of consumers and small business.
• Unprecedented increases in public debt – transferring tax funds to “bondholders” both domestic and foreign.
• Vast increases in the size and profitability of the “security” industry so that private mercenaries can be paid 10 times what soldiers get –  using public funds.
• Huge subsidies for connected industries like the health insurance companies rewarded by the “medicare advantage” program.

When they were in power, elite conservatives used the government to protect connected corporations from competition and to divert public wealth to private purpose. Now, the conservatives have a million excuses for their decade of excess- ACORN made them do it, or Bush really wasn’t a conservative, or whatever. They even have the gall to argue that since Bush is no longer President, their actual record does not matter anymore.  But Conservatives say they are in favor of limited government and balanced budgets because they want, at all costs, to avoid debate over where public investment should go. They know that in any honest debate, there would be no support for giving billions to Blackwater while families of American servicemen and women have to apply for food stamps or for paying billions for military protection of oil companies instead of investing the money in green energy and energy independence. The elite conservatives know that even the most deluded tea partiers would not appreciate being fooled so that public money that could be spend for education or municipal water could be diverted to bonus payments for wall street pirates. Slogans like “it’s your money” and “government is the problem, not the solution” are just loud noises used to make the public look away while their pockets are being picked.

The reason that the conservatives have rediscovered their worries about the federal debt, after 10 years of throwing public money into the furnace, is that they are worried that the government might act to increase the economic power of the middle class and break the monopoly powers of their employers. If you want a simple example: think of who would benefit if employees could leave big companies to found competitors without being chained to their health insurance. There is a reason why the Chamber of Commerce now outspends both the major political parties. The reason is that the huge corporations that dominate the chamber of commerce are anxious to use the government to protect their monopolies. Exxon does not want a competitive market in green energy created by public investment. JP. Morgan does not want the government to lend money directly to students instead of paying the banks to do it or finance disruptive new manufacturing companies that could threaten their partners. And so the paid for hacks at the American Enterprise Institute and from the University of Chicago go on Network TV and NPR and complain about budget deficits for educated rubes and their popularizers like Rush and Glenn Beck go on talk radio and cable TV and dumb down the message for the  less educated rubes.