Deregulation

Government is the not the solution! Government is the problem! That has been the mantra of the Republican establishment since Ronald Reagan ascended to the Presidency. It has been the cry of George Bush and McCain and all Republicans since their icon reigned in the White House and when they gained power they proved it. Yes, during the years of Republican ascendancy government was the problem, for they treated the levers of power as though they were there to serve them and their rich cronies. The powers of government were to be used to achieve a permanent Republican majority and to enrich their supporters in industry and in the financial sector in return for which these supporters would lavish upon them a small portion of their gains, enriching many members of the Republican establishment, and giving them the campaign funds with which they hoped they would achieve a permanent majority.

They have railed against a redistribution of wealth while systematically redistributing wealth from the middle class to the top 2% of the wealthiest of the wealthy.

They kept accusing Democrats of a policy of “tax and spend” while always spending at least as much as Democrats proposed, only the priorities were different, spending always being directed toward their goal of wealth redistribution upwards. They didn’t tax and spend, no, they borrowed and spent, and they borrowed more and more and more until our deficit has exceeded all previous deficits.

But their greed was so great that they caused the wheels to come off.

There is a basic axiom in economics. “The Greater the Risk the Greater the Reward.” And so our financial moguls took great risks and they enriched themselves. And so they took greater risks and more money flowed their way. This is what led to the Great depression of 1929 and after that depression Franklin Delano Roosevelt and his Democratic Congress put in place safeguards that did not allow the moguls to gamble with our money. For it is our money that they gamble with. It is the money that we deposit in their banks that they gamble with.

And Republicans for a very long time made no attempt to decimate the regulatory network set up in response to the depression until Ronald Reagan. Then an onslaught on the regulation that made reckless risks illegal began and where they could not persuade Congress to repeal these protections they proceeded to appoint to the regulatory agencies people who they knew would not enforce the law. They put the fox in the henhouse. Thus they made sure that the reckless risk takers would have a free hand.

Now they have discovered that government is the solution. To save their billionaire supporters they want the government to rescue them and there may be no choice because these moguls can bring our whole economy and the world economy to its knees and McCain is one of the main architects of this deregulation. As he said in 2003, ‘I have a long voting record in support of deregulation.’

Canada’s conservative daily “Globe and Mail” in today’s edition summarizes the situation as well as anyone could and so I quote their article in full:

“How is it now possible for a reasonable voter to cast a ballot for John McCain?

“The total cost of rescuing the financial services sector, including past and proposed actions, exceeds $1-trillion, more than twice the record $438-billion deficit projected for this fiscal year.

“American taxpayers are being asked to spend thousands of dollars per person to prevent the collapse of Wall Street. A whole lot of people who made an awful lot of money by taking enormous risks they couldn't afford will benefit, at the expense of everyone else.

“John McCain and platforms are ashes. They can forget about cutting taxes - for the middle classes, the upper classes or anyone else.

“And all those grandiose plans for health care and education and the military? Forget it. The next federal government, unless it abandons all pretense of responsibility, will have to focus exclusively on raising revenue and cutting spending, in an effort to bring the budget back into something remotely approaching balance.

“Mr. Obama acknowledged half as much yesterday. While insisting that many of his key promises were self-financing, he added the caveat: "It would be irresponsible of me to say I am not going to take into account what things look like should I take office." Voters have every reason to be nervous at the thought of this freshman senator, who has no experience at running any level of government, becoming president in a time of acute fiscal crisis.

“But now there really is no practical alternative. John McCain helped create this emergency. He's partly to blame for it. Under the circumstances, rewarding him by voting for him would be perverse.

“If there has been one constant in Mr. McCain's legislative record through decades in the House and Senate, it has been his unequivocal support for deregulation. He championed it during his years as chairman of the Senate commerce committee. He campaigned actively and successfully for the very act that scrapped the regulations whose absence created this cascade of bank and insurance-company failures.

“‘I have a long voting record in support of deregulation,’ he said back in 2003. It was no idle boast.

“Mr. McCain's election platform proposes allowing taxpayers to divert part of their social security payments into private investment accounts. It would deregulate the health sector, so that people could shop around for the best available health plan, rather than relying on their employer to provide it.

“‘Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation,’ he wrote in a magazine article published last week. Presumably, the piece was submitted before Lehman Brothers went belly up.

“Deregulation is not a bad thing. By loosening the restrictions that prevented innovation and risk, Ronald Reagan and Margaret Thatcher unleashed a generation of virtually uninterrupted growth that other countries, including Canada, rushed to emulate.

“But the watchman state at least needs to be a watchman. Deregulating past the point of common sense, so tainted food starts making its way onto shelves, municipal water supplies become lethally contaminated and banks take risks so hazardous they imperil the global economy, is an abdication by government of its duty to serve and protect its citizens.

“John McCain could honourably have said that, in retrospect, he might have been too enthusiastic in his support for unlimited deregulation, that he is learning lessons along with everyone else, and that, as president, he will restore a responsible level of federal oversight on Wall Street.

“Instead, he blames the greed of bank executives and accuses Barack Obama of failing to propose a realistic plan to fix the mess he helped create.

“That is base.

“An American might vote Republican because his father did, and so does he, and so will his son. She might vote Republican because John McCain opposes abortion and the right to life is the only issue that matters to her. They might vote Republican because they would never vote for a black man.

“But for a reasonable voter to support the Republican Party, after everything its candidate has done to help bring on the worst financial crisis since the Depression, well, that just makes no sense at all.”