Liberals, the Super Rich, and Strange Allies

If you read the fairy tale weaved by the major media and our history books, we would believe that liberal policies are beneficial to everyone, whether if those policies are popular are not. The upper classes can complain all they want, but they sleep better at night knowing that the government is generous with their wealth, even if those wealthy are actually "quite greedy." The middle class who aspire to be rich might have to face tougher regulations and taxes that might prevent them from meeting their dream, but at least they know their "fundamental needs" are being met. This would never happen, we are told, without the benevolent hand of the government. Than there are those who are poor and they are obviously the biggest beneficiaries of a big and generous government. These people would surely be found lying dead in the street without the generosity of a redistributing government.

The reality is, the only ones who benefit at all from a government that is growing out of control are the super rich and, if you consider getting "something for nothing" a "good thing," the poor. The rest of us are squeezed by the pressures driven by the highest income groups.

Liberals want us to believe that conservatives are "for business" while they are for "the people." It is correct that, true conservatives, support bills that encourage economic freedom. But businesses support liberal candidates as well. Liberals want us to believe that Obama raised almost ten times more than McCain in the last Presidential campaign by getting coupons and food stamps from the homeless and the destitute. According to the FEC, the top 1 parent income group gave three to one more to Barack Obama than John McCain. How is that possible for a President who is bent on being the "Peoples' President?" The reason for this is simple, the mega rich are the only ones that can actually afford big government.

I worked for a member of the US Senate and learned how the super rich and the liberals work hand and hand. For example, major energy companies and environmental activists (yes, odd bedfellows) decide that it was time to upgrade the environmental quality of gas pumps in the early 1990s. So, they send their team of lobbyists upon Washington, DC to persuade members of Congress to pass legislation that would cost -- $10,000 per gas pump on average in order to bring them up to code.

Now, the liberal members of Congress are sitting in their office and the lobbyists visit them. They see a "business man" who represents an energy company saying that forcing the upgrade of gas pumps is a good thing for everyone -- including business. It will "create new jobs" for those who make these better pumps. More "important," this legislation will make a "cleaner and safer environment," because fewer gas fumes will be pumped into the environment. The liberal, who is inclined towards expanding government any way, loves this. It is "pro-business" and "pro-environment, what can we lose?" What was lost was thousands of jobs, untold numbers of "mom and pop" gas stations that could not afford the upgrades, and consumers lost choices for buying gas. This epitomizes government at its worse. Big business has partnered with big government to mug small businesses for years with regulation and tax laws the latter cannot afford.

There is a similar situation when it comes to excessive, progressive, taxation. The super rich find this to be a laughable situation, since most of these taxes only apply when money is being used in economic activities. A great example is the capital gains tax. When you look at history, and when this tax was very high or in the process of increasing (like now), the result is a dramatic drop in economic activity and the jobs they created. The rich would sit on the largess they enjoyed and accumulated, while those who want to be rich find themselves unable to afford to take risks because the rewards were so damaged by the tax. The super rich actually get a break from the upper middle class that aspires to be rich when all taxes are high. In a way, these high taxes are an actual insurance program against those who would want to displace them on the economic ladder.

Big government, and its proponents, have always been funded and supported by the super rich. Although more than 80 percent of all jobs are created by small business, major corporations and the people that benefit from them, dictate government policies that keep the wealthy on top and increases the numbers of the poor (by destroying job creation among small businesses and providing increased incentives for choosing a life of poverty). So, the next time you meet someone who says they are liberal, ask them why don't they give the "little guy" a break and support freedom instead.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is also host of the Price of Business (M-F at 11 AM on CNN 650). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

The Year of the Bailout

I consider myself the perennial optimist. I always try to view things from a "half full" versus "half empty" perspective. But 2008 was a challenging year. It is a year where it appears that we made a paradigm shift when it comes to the role of government in the economy.

I believe that future history books will call 2009 the year the United States became the "bailout nation." We saw more of such today with GMAC Finance receiving $6 billion from the federal government. Democrats defied the image of being for "the little guy" that they worked so hard to maintain by leading the effort for bailout for major banks and corporations. There was far more reluctance by Republicans to bailout these fat cats, but in the end, I am sure the media will find these bailouts the complete fault of the GOP if they fail and will be seen as an act of courage by Democrats if they are interpreted as successful. The reality is, we already know they have "failed" because we had to abandon the ideas of limited Constitutional government to make them happen and the hangover effect of them may not be felt for years.

What is almost as negative as the Constitutional and policy implications of these bailouts is the view they project of what is important to us a country. In the United States we have a safety net for the poor, we bailout the super rich, and we obliterate the engine that creates more than 80 percent of the jobs in the country through excessive taxation, regulation, and licensure law. The highest income groups are not nearly as influential as those rising up the economic ladder in creating jobs, yet we sacrifice the entrepreneur at the altar of the mega corporation.

Those who have eaten at the trough of bailout are extremely vulnerable in the future. The government never "gives" without demanding more. Many of the task masters in government that have fed these companies, have advocated the nationalizations of industries. The hubris to think they will not be vulnerable is unbelievable.

The United States has been successful because of its long term commitment to economic freedom. This freedom includes the right to succeed and fail. Moral hazard is an important element in economic freedom. There has to be consequences to failure in order to avoid those mistakes in the future. The government is replacing this system with one that will eventually force the failure of many entrepreneurs and create a new welfare class of the mega wealthy. Let's hope 2009 sees a reversal of such a trend.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.