Abandoning Old Economic Dogma

[Double A]

Abandoning Old Economic Dogma

Jeff Alworth

Right-wing economic dogma has had powerful sway not only over economic policy in the US over the past two decades, but even over reality. That dogma holds that freer markets are always better while governments are always inefficient and incompetent; tax cuts are always the most effective way to boost economies; and privatizing government functions is the best and cheapest way to serve "customers." Much as the right was able to demonize the word "liberal," they have had nearly perfect success in communicating this ideology as fact, rather than the specious and self-serving dogma reality has lately proven it to be. One of the big fights in the next election will pit economic facts against this unchallenged GOP rhetoric; whom voters find persuasive will decide some races.

While markets are wonderfully efficient organisms in some cases, there are several obvious areas where they amount to nothing more than corporate welfare. Recently, student-loan companies have attracted a lot of attention for their payola schemes. It isn't unique to student loans, either; health care, vast military contracts, farm subsidies are other examples. The New Yorker's James Surowiecki describes the practice:

In part, it's ideology, and the dominance of what you might call the privatization mystique—the idea that anything the government can do, the private sector can do better. Often, this makes sense: the free market is more likely to come up with efficient ways of creating and distributing products and services than the government is. But the student-loan market isn't a free market in any meaningful sense of the term, because the government effectively determines prices, insures against losses, and subsidizes volume. In this environment, most of the competition among private companies is really just squabbling over how to split up the spoils. Economists call this behavior — when a company seeks to manipulate economic conditions rather than actually create value — "rent-seeking." It's common in areas where the fetish for privatization has taken hold, such as the outsourcing of homeland security to private contractors and the boom in private Medicare insurers. (The private insurers are less efficient than Medicare and receive billions in subsidies from the government.)

It doesn't sense on any level but as a payola scheme. Given the dramatic changes that Tom DeLay brokered between the GOP and K Street, it makes a lot of sense on that level.

The "fetish" of free markets also places value on only a single factor: a financial bottom line. But society is built on more than a single value. People will willingly sacrifice money for a number of other objectives--lowered risk (medical, old age), livability, community, healthy environments, and so on. Free markets are horrible mechanisms to accomplish these things--though of course Grover Norquist has been making that argument for 15 years.

A couple of articles reminded me of this recently. On Saturday, the Oregonian reported that while the housing bubble continues to burst nationwide, in Portland things are just fine. Why? Because Portland, unlike most cities in the nation, has invested in values beyond the financial bottom line:

Kathy Hall, a principal broker at The Hasson Co. in Lake Oswego, says the region continues to attract newcomers who like the region's livability -- clean air, hiking and biking -- and relative affordability.

"That's why our market has held its value," Hall says.

Every time the city--the "People's Republic of Portland" to right-wingers--wants to invest in bike lanes or street cars, conservatives scream that we're wasting our money. But these investments harvest not just direct benefits of livability, but financial benefits, too.

And in today's edition, the Oregonian reported that Portland enjoys a "green subsidy" of $2.6 billion because we drive less. That money--3% of our annual economy--would otherwise go to gas and car companies in Detroit and Houston. The values multiply--fewer cars on the roads mean those on the road spend less time in traffic; fewer cars means less carbon emissions. That benefit comes from careful, long-term planning by the city. None of these would emerge from right-wing thinking, which says serve the market by building more cars.

In the national debate, it's verboten even for Democratic leaders to mention national health care. This is a vestige of the right-wing dogma, which--all evidence to the contrary--still holds that public programs are a disaster. But we have seen, from real disasters on our bridges, in New Orleans, in Iraq, in our crumbling schools, and on and on, that the real disaster is in fetishizing markets.

I hope Democrats from Hillary and Barack to those at the local level start to reject the bizarro-world rhetoric of free-markets, tax cuts, and privatization. It's time to add other values to the formula and begin to demand that facts guide us, not empty rhetoric.

August 20, 2007 | Jeff Alworth

http://www.blueoregon.com/2007/08/abandoning-old-.html#more

[Conan71]

Just guessing AA, but I bet you work for a company who participates in our free market, yes?