The Socialism Canard

Every time Democrats propose having the government provide assistance to those in need or regulate business, the Republicans scream, with their throat veins bulging, “This is Socialism.”  And a large segment of the public, like a hypnotized subject, nods their head and agrees that this is terrible.  It’s only one step away from Communism.  It is against what makes America great.

To listen to the Republicans, one would think that they were against any government spending or action that helps others or in any way interferes with the market place.  That, however, is not the case.

Republicans are very supportive of the billions of dollars that the government spends, either in the form of direct payments or beneficial tax laws, that provide American corporations, especially big business, with government subsidies.  They are also very supportive of government regulation/interference that supports corporations, such as elements of the farm bill.  NOTE: Almost all government farm subsidies go to large corporate farms.  The embattled family farmer benefits hardly at all.

The only difference between the spending and regulation they support and the ones they don’t support is that the former benefit big business while the latter either benefit the average American or protects him by restricting the unfettered ability of big business to act as it wills.

This is hypocrisy.  But the immorality of their stance is even worse. To argue against measures that protect the average American or helps those in need while supporting spending and other measures that help those who are not in need is to take a stand which is immoral.

“Ah,” they say, “but cutting back on such spending or measures will harm American business on which the economy depends and will result in the loss of jobs.”  Any attempts to cut back on these items, or imposing new costs on business, are labeled, “job killers,” by Republicans.

But that is not true.  What is true is that if such subsidies are cut back or new costs imposed, corporate profits will be reduced (unless they raise prices) and thus shareholders will be impacted by lower stock market prices for their shares. 

I am not against corporations making a profit and benefitting their shareholders.  But many of these companies have profits at such high levels that the benefit to the larger society of cutbacks or new regulation/costs far outweighs the reduced profits to industry.  For example, many of our largest, most profitable corporations pay almost no taxes through the loopholes that they enjoy.

The cost to the American taxpayer of these corporate subsidies is unconscionable, especially at a time when the American middle class and the poor are being asked to make sacrifices in order to reduce the government deficit.  It is obscene that our middle class and poor are asked to shoulder the costs of providing subsidies to those who typically already have more money than they know what to do with, other than spend it on more luxury.

The American social contract has traditionally (since the early 20th century) required all aspects of our society to support the greater good, each to its ability.  That concept of fairness and the greater good has been so denigrated over the course of the last few decades by the Republican Party that Republicans in government should hang their heads in shame.

Government and business both have their place in American society and in our economy.  It is past time, however, to correct the balance between the two.

Why Should the Public Pay for Industry’s Costs of Production?

A for-profit business has to figure its costs of production in establishing a price and maintaining a sufficient profit margin to warrant being in business.  This includes all inputs into the production process.  However, for many if not most American businesses, this does not include the costs of rendering all byproduct outputs from the production process harmless to the environment.  

There are certainly measures that are required by regulation, but they are minimal relatively speaking.  When any efforts are made to require more stringent measures, the common outcry from industry is that the measures are too expensive.  And so government typically relents and the pollution or other damage continues, with the environment being damaged, sometimes irrevocably, sometimes to be cleaned up at the taxpayer’s expense.

Before any product is allowed to be processed or manufactured, why isn’t it required that a business provide an environmental impact statement indicating the measures it will take to insure that any potential impact is mitigated to the point that the process is harmless to the environment.  If a business cannot with a sufficient degree of certainty make such a statement, it should not be allowed to proceed.  (The former phrase is in italics because industry routinely makes such bold statements without there being any rigorous research or data backing up the statements.)

The obvious case in point is hydraulic fracking, but the same principle applies to coal mining, electric generating plants, chemical plants, and many other industries where one wouldn’t necessarily think that toxic discharges would be a problem.  No industry should be allowed to despoil the environment.  And the public should not have to pay for mitigation measures that should be considered costs of production.   

If such a system is not put in place and the government/taxpayer ends up paying, then isn’t that a form of socialism that big business and conservatives so abhor?  Why is it only socialism to these people when the government helps those who are in need, but not when government either directly or indirectly subsidizes the cost of doing business?

This is but one more example where corporate interests usually trump all others because of the power they have through the money they donate to politicians and the money they spend lobbying for their point of view.  Those who speak on the public’s behalf are drowned out by the shear magnitude of corporate power over the process.