Political Opinion: Who Is George Bush Taking His Cues From? Hint; Another President Who Spent A Lot Of Time Cutting Brush On His Ranch
Bush is a Reganite. In fact two of the principle members of his administration served under Reagan namely Cheney and Rumsfield. They of course brought along numerous lieutenants and minions that also served in the Reagan administration like Wolfowitz and Richard Pearl. Milton Friedman not in Bush’s administration but influential, was on Reagan’s Council of Economic Advisors.
Reagan was famous for embracing trickle down economics and using this thoroughly discredited economic theory to justify tax cuts for the wealthy while running massive budget deficits that led some responsible economists to speculate that Reagan’s profligate spending on defense might lead to bankruptcy. The boom years of the nineties and Clinton’s responsible fiscal and monetary policies put the United States back into the black. Nearly.
While Bush Jr. is an ideological heir to Reagan, He doesn’t talk about trickle down economics (anyone with common sense knows that money trickles up in our economy. When the average person has a job and a living wage he spends money on the necessities of modern life like appliances, cars and housing which causes money to flow into the coffers of the companies that sell those things.) However Bush follows Reagan in giving massive tax cuts to the wealthy while running steep budgetary deficits. Already this has been part of the reason for recent interest rate increases (along with increased oil prices caused by his foreign policy.)
Will Corporations Profit At The Expense Of The American Worker?
Reagan was anti union, pro deregulation and a free market capitalist as averred by University of Chicago economist Milton Friedman, as was Mrs. Thatcher, England’s prime minister while Reagan was president. She divorced the British government from owning or supporting industries like coal and steel that were unprofitable but provided well paying jobs. When the British government got out of these businesses they basically either closed down or reorganized and cut employment.
We saw the effect of these policies in the movie The Full Monty when laid off British steel workers were forced to become male dancers to earn a living. However Thatcher appears to have been right in getting the government out of these old smoke stack industries and allowing the market to dictate which businesses thrive and which die. The English economy seems to be thriving so far.
In South America we have seen the application of Friedman’s principles of free market capitalism produce mixed results particularly in Bolivia. Bolivia is now nationalizing its energy industry while allowing private companies to operate it. Venezuela is threatening to take a bigger chunk of oil profits of the oil companies who developed its fields. Brazil has been a social democracy with reasonable results for some time. Chile, which embraced Friedman’s theories under Pinochet and after seems to be on economically sound ground.
So Milton Freeman’s free market unregulated economies do not work everywhere and it is doubtful they work in their purest form anywhere. One could imagine the disaster if the U.S. pharmaceutical industry didn’t have to comply with the Food and Drug Department’s regulations or there was no Securities Exchange Commission to regulate the financial markets. Friedman believes the Great Depression was not a failure of capitalism but a failure of government and in particular the Federal Reserve System. according to Friedman it failed for allowing the money supply to rapidly contract by as much as a third.
Of course all this is counter to the Keynesian policies put into place by Franklin Delano Roosevelt after the essentially free market policies of the Twenties and which ended in the Great Depression
That is why Bush and his cronies would like to do away with Social Security, Medicare and create individual medical and retirement accounts for workers in order to free government and industry from their fair share of these social costs.
A medical savings account sounds great if a family never suffers a major medical crisis. However if a child is born into the family with an illness or disability requiring major and prolonged medical treatment an individual family’s account will soon be exhausted and the family driven into bankruptcy. Indeed most individual bankruptcies are now caused by the medical expenses of uninsured families. Families who can’t obtain insurance because of that severely disabled child or other family member.
The pooling of small contributions in a general fund works. Some people will never need substantial amounts from the fund while others will. Small affordable contributions by everyone is a small price to pay for the peace of mind that you will have access to medical treatment in a catastrophic event or that you will receive Social Security whether you die at sixty eight or if you live to be ninety and beyond. This is the basic rationale of insurance; for a small contribution you can spread the risk of life’s uncertainties.
Bush and his cronies are against these plans because they fetter free market capitalism and limit the profits of large companies.
The thousand largest American corporations have well over a trillion dollars in cash reserves at this point largely due to the efficiencies of computers, tax cuts, globalization, and the reduction of American employees in favor of cheaper foreign labor,with the concurrent reduction of pension and medical benefits promised to American employees. If you are waiting for this cash horde to be invested in new plant and equipment in the U.S. thus benefiting the American worker think again. What reason does an American company have to invest in the U.S. when most manufacturing and many services have been out sourced to other countries whose goods and services have been sold back by the companies to Americans who have mortgaged the equity in their homes to buy those goods, services and oil from abroad.
Do you think it will ever trickle back so that we once again will be a lender rather than a debtor country?