Friday, March 13, 2009

Back to the 70s: More than One Road to Socialism

Congress is considering legislation aimed at making our food supply safer, but for small farmers and ranchers, one such bill looks like another example of big business and big government teaming up to get the little guy out of the way....Livestock Tracing Bill Could be End of Family Farms, Ranches, Timothy P. Carney,, 3/13/09

For those of you too young to remember some of the aftermath of the expensive accident at 3-Mile Island, one of the more startling revelations was that a number of American coal companies were leading sponsors of anti-atomic-power organizations. It's a standard tactic by dominant organizations. Use any means to fight the competition. Disciples of any crusade really need to take care when confronted by some new cause, whether the terror of the cleanest power generation ever devised, or of global warming.

In the matter written about by Timothy P. Carney, this has been going on for decades. In New York City, City Council flurries about the cleanliness of local coffee shops and inexpensive family restaurants is often followed by a) health violation citations, b) closings, and c) the arrival of McDonald's, Burger King, and Dunkin' Donuts. You don't have to ask whose attorneys brought the City Council's attention to the health conditions in family-operated coffee shops. And if they can't get away with that, they'll sponsor a consumer organization to make the case for them.

Writ large, this is how American socialism has come to pass. Despite evidence that suggests large corporate enterprises foster mediocre products (see Detroit's auto industry), high level and expensive corruption, now, as in the 1970s, the exact opposite of what the market is dictating is being advocated, and acted upon, as official policy. The market suggests, for instance, that a super-sized bank like CitiBank is grossly inefficient, approximately useless to investors, a danger to depositors, underwriters and insurers, and populated by a management more suited to a government agency than to a private business (i.e., more into turf protection than profit-making). What's policy under the new administration? Throw a hundred billion at Citibank, on the advice of a White House team populated by many ex-senior managers from -- gasp! -- Citibank. Why does this happen?

Corporations, at a certain size, are virtually indistinguishable from socialist departments of government. In the ancient days of the 1970's, a popular saying was "Senior corporate officers and the members of the Politburo of the USSR belong to the same union." For students of films by Sidney Lumet, this was illuminated, to a magnificent extreme, in a scene in "Network" when Ned Beatty instructed his network's new prophet on the realities of corporate and communist life. Corporations, as anyone in small competing businesses knows, abhor competition almost as much as the communist party does. And, if they can't beat it, they buy it. Look at Microsoft's gobbling up of small software companies, and its ongoing efforts to make Windows the only alternative. In this, the software giant is only emulating its precedessor IBM's behavior. (IBM's idea of customer service was first to blame the user -- should sound familiar.)

When you dominate a market, quality of product is far less important than turf protection. One of the reasons General Motors is in such sorry shape is that its management, after twenty-five years of getting whomped by the Japanese (Toyota is now the largest auto company), still seems unaware that there are other games in town. Assuming that sheer size can overwhelm such issues as the likelihood that gasoline prices will skyrocket as the economy recovers, they still try to peddle vehicles that get 20 miles per gallon only at an EPA laboratory. On the road last summer, those "efficient" Escalades, Expeditions and the like gobbled up their owners' wallets at a rate of 60-100 dollars a tank.

When you dominate, the behavior you're emulating is that of the state itself which, as Hobbes (or Mao) put it, has not only economic power but possession of most of the means of violence. Even in America, for every psychopath that shoots a dozen people in a schoolyard, there are a dozen bombers and a thousand missiles that can kill a billion people in an hour. As with apes, every bully prefers to associate with the dominant individual. It's no different with senior management at the Fortune 500.

As such, human creativity is choked, as it was throughout the 1970s, in such an environment. So much the better for the dominant. When General Motors was truly the strongest auto company on the earth, they could sell a product that had matured technologically in the 1940s. In the mid-1970s, the only difference between a Cadillac built then and one built in 1953 was the shape of the body and the presence of safety equipment mandated by the federal government. The latter was also a perfect excuse for continuing price increases for an increasingly mediocre product. The advent of Japanese competition in the 1980s was Detroit's Pearl Harbor. Their first response wasn't to build better products but to lobby the federal government for trade protection! Were you surprised? How long after that did you hear consumer groups howling about small cars being too dangerous for the American road? And could we hazard a guess as to who footed the bill for those groups?

Politicians, claiming to safeguard the people and spurred by self-proclaimed consumer-protection groups, advance regulation favored by industry giants who understand that the regulations’ burden may crush smaller competitors...(Animal Tracing...Tracey Carney, cont'd)

Americans are too smart to be fooled by a totally Red agenda. And, surprisingly enough, American political and corporate elites know very well that the state isn't capable of running the entire economy. So, what they join up to do is to divide the economy into segments they feel competent to run. With the stock market down 50%, even with the current rally, the credit market in tatters, the government with a trillion and a half fiscal deficit, welfarism on the rise again, and some of America's largest companies on the rocks, corporate and government self-esteem looks more narcissistic than real.

That rarely troubles socialists. To them, narcissism is an affect of anyone trying to break into their game.


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