The War on Business

Since it's so popular to talk of wars on this and wars on that, like the war on drugs, the war on women and the war on poverty, there's one war that's coming to a head -- the war on business. It wasn't started by Obama and the current Leftist realm -- it's been around since the beginning of recorded history. Throughout history we've read the stories of the rulling class denigrating the greedy merchants. This charge of greedy business people was leveled against Jews for a long time, and still is, away from the public spotlight, or, in some mideast countries, right out in the open.

The Left has traditionally held a cynical view toward business, unless the business was politically correct and politically useful, like the current acceptance of green businesses. The Information Age gives voice to the business community, which before the internet and alternative media was hardly ever heard from unless there was a scandal, or some rich, flambouyant  personality made it into the spotlight. Just a decade or so ago, most people couldn't name any important business people, but now more are familiar with business people such as Jack Welch, Steve Wynn, Bill Gates and Steve Jobs.

US government has had a strange relationship with American business. There's the common, base crony relationship, then there's the adversarial relationship like between Democrats and Big Oil, and then there's the partnership relationship. Added to the relationships is the semi-nationalized relationship currently between GM and the government. Much of the adversarial aspect of the relationships is no doubt for show since politicians are dependent on corporate money to get re-elected. Let's be kind and say the relationships are confused and confusing at times.

In the last few years, the division between American business in general and the Obama administration has grown wider. Some individual businesses appear to get along splendidly with the administration, such as GE whose CEO, Immelt, is part of the Obama team. Obama's gang has picked its favorites, but the rest of the business community realizes that the Obama administration is waging a war against business. While many companies have done well with profit, they are not expanding in America. It's as if business, per se, has been shut down in America, and businesses of all sizes have been hurt, in spite of large corporations being profitable, mainly from overseas operations. Now that recession is presenting a global threat, US companies are worried, so you see companies moving from the Obama camp to Romney's camp. Obama has blamed businesses for a variety of America's problems, plus he accuses them of not paying their fair share, although they pay the lion's share of taxes.

China's growth is slowing. China's government is spending to prop up economic growth, but this can't last. The US has a chance to lead the world out of recession, but first the US must once again create a business friendly environment. This is no time for socialist experimentation -- this is no time for our government to wage a war on business.

Two worlds -- political and non-political

If "non-political' is possible in our current environment, but, yes, there's still a space which is distinct from the political world - a political world that emanates from a powerful State, characterized mainly by news media in America. When Allen West responded harshly to Debbie Wasser"person" Schultz, he did so non-politically as a human being who'd had enough. Criticism of West from the political realm is based on the idea that, politically speaking, such straightforward responses are politically inappropriate.

When the Washington establishment, both Republican and Democrat, demean Tea Party representatives for their political naivette and "extremism", they don't mean, necessarily, that the Tea Party position is wrong, but rather the Tea Party is politically isolated in Washington DC. Most mature actors in DC believe we're facing a debt crisis, but the political system is incapable of dealing with it head on, because there are political interests involved, and those in the political realm will likely dissemble and spin rather than face the crisis and take the difficult measures needed to address the crisis.

Charles Krauthammer and the gang on the Fox All-Stars pretty much agreed today that compromise on the debt ceiling issue is necessary to avoid a credit rating downgrade -- however, in the non-political world America should be downgraded to match the reality of our financial situation and future unfunded liabilities. If America's government had to face this reality immediately, as they should, there would be greater urgency to limit government -- but, just like Fannie and Freddie and Big Banks were ignored by credit agencies for political reasons, our representatives will, as the old saying goes, fiddle as Rome burns.

Because America has been crippled by the inundation of political ideas, intervention, language and "logic", much of the nation, especially that part of the nation with influence, is now incapable of dealing straightforwardly with reality, especially economic reality. The delusion exists that political perceptions can substitute for reality, therefore, if a poll is twisted to support an unreasonable political position,   consensus detemines the correct policy. If someone outside the political realm insists that despite the poll and popular opinion, we still have a debt crisis facing us, and if we don't act there will be dire consequences, the dissenting voice becomes politically inappropriate -- extreme. The political actors will say that in this political world resisting the political compromise is tantamount to heresy, a radical monkey wrench in the political machine - a machine which has to achieve agreement in order to function properly. The proper functioning of the political machine is more important than what actions are actually taken, and what results follow from the actions.

For most reasonably intelligent people who possess knowledge of our history of Middle East involvement and current state of Afghanistan and Pakistan governance, remaining in Afghanistan is a misuse of our troops and waste of taxpayer money, but, politically, it makes sense to the Obama administration to find a politically feasible exit. In the non-political world, this means that every American soldier who dies in Afghanistan is a life that is basically wasted because of a political decision to extend the Afghanistan War. In the political realm such trade-offs are common, and it goes to show how affected our society is by the logic of politics. Those who back the adminsitration know down deep that staying in Afghanistan for another year or two won't make a difference to our national interests, but they've allowed political motives to anesthesize their conscience.

When American enterprise became politicized years ago it skewed decision-making at the top, so that CEO and corporate board members felt pressure to play the political game, thus the phenomenon of lobbyists on K Street materialized and proliferated. No company wanted to be left disconnected from Washington, because their competitors might get the upperhand through legislative favors. Business priniciples and capitalism itself were perverted as companies realized that in their efforts to avoid being beat by competitors at the political game they could get good at it and thrive by eliminating competition from below. GE is a prime example of a "State" corporation which lobbied its way into government protection -- GE's CEO is a part of the Obama administration and will be rewarded as green energy schemes proliferate. The political capture of Big Business has thwarted all efforts to establish a free market in America, and this started practically from the beginning of our nation.

Outside the political realm, intelligent observers shake their heads at the current debt ceiling debate and manipulations behind the scenes knowing the outcome will be greater extraction of capital from the private sector and more government spending, but within the political realm it matters most who wins the political battle and frames the images best for 2012 elections.

Government and GE sitting in a tree...

Daniel Ikenson at Cato has written a good article about government/corporate enmeshment as it relates to the Obama administration and GE. This partnership between Barack Obama and Jeffrey Immelt is  a continuation of corporate favoritism by government. Many people became outraged when it was reported that GE paid no taxes on billions in profit, but this happened legally because government made it possible. Immelt, though, is not blameless – he’s a rent-seeker of the worst kind. However, it’s understandable that Immelt would enjoy his protected position in industry, and from a purely rational point of view, he’s helping his stock-holders.

This Merchant-State evolution into State Capitalism is antithetical to a free market, and it squeezes small and medium size business out of competition. For all the loathing on the Left regarding corporate power, there is very little resistance from the Left when GE partners with government on a beloved project – green energy. Perhaps this is the socialist transition in America – government/corporate partnership for the correct causes. It became obvious decades ago that States make a mess of owning and directly managing industries, so now they just protect and guide their favorite companies, using them as long as they are useful. Immelt is a protected patsy.

This idea that market competition is now between States is only a ridiculous stage in the transition to a few States re-dividing the world. After WWII the world was divided between Russia and America, but now China wants its place at the table.  Soon India and Iran and Turkey and Brazil will have their place. Germany will want more say. It will be decided at some point that it’s useless to fight when they can coordinate and manage the globe. As power increases, the ideological differences fade. Our future disagreements, if this movement isn’t stopped, will be strictly over power-sharing, not disagreements between capitalism and socialism, or western values and Islamist law (disagreements in the past might have always been about power-sharing, with ideology as a front).

I’m not sure our nation understands the importance of implementing a free market and limiting government power – it’s not to enrich even more powerful corporations – it’s to open up competiton so that the government/corporate enmeshment enabled by statism doesn’t destroy everything America  has  supposedly stood for.

Politics as image

It's probably always been like this and we just didn't have access to information as we now have in the Information Age, but I have to believe it's gotten worse -- at least the arrogance of the Image-Makers is worse, seeing as how they know the public has access to information yet they still assume the public will buy the image over reality. The State machine which protects the image is attempting to marginalize information which exposes the images, but they aren't succeeding -- I don't think.

It's important to stay focused on what government actually does. The Image-Makers are working off an old play book, which has its roots in propaganda, advertising, art and marketing. Image-Making is not always bad. If a politician is unknown and wants to be known, good marketing/image-making of the pols' real assets can help to get this reality out to the public -- however, in the present political environment Image-Makers are primarily concerned with deception and illusion, not matching image with reality.

Are the many images presented to us by the political class, the media and numerous intellectuals consistent with reality or are they deceptions designed to obscure the problems we face? How is that the image of Obama can be presented now as a deficit hawk at the same there are reports he will ask for more government spending on infrastructure, education and research? How can this image of spending be presented as "investment" when it's not unlike the almost one trillion dollar sitimulus last year? The image being presented shortly before the SOTU is of a president who has moved to the center, is now business-friendly and has developed a deep concern for reducing deficits and debt, yet he will request that capital be diverted from private sector investors and producers to government economic managers, adding to our budget deficit and long term debt and expanding State power over our economy. Pehaps he will give lip service to cutting spending and balancing the budget, but this is to support the image, not to address reality.

The image of an Obama who has learned a lesson and will now allow the private sector to create jobs, is undermined by the reality that capital diverted from the private sector will be directed to companies chosen by government, thus favoring a few businesses over the many who could be creating jobs if the market was truly free and all government obstacles were removed. The image of GE's Immelt chosen as a sign of the adminsitration's willingness to work with American businesses is undermined by the likely reality that GE will benefit from the infrastructure projects more than other businesses. GE was protected by government from its financial mistakes, and now its stagnant core business will be given a boost by government stimulus measures -- I'm only guessing here, so we'll have to wait and see who wins and who loses. But as long as the image is left unmarred, who really cares, right? Wrong. The public cares.

I hope I'm wrong, and if I am, I will apologize.

The Ameri-Sino-GE-Goldman collaboration

While on the face of it libertarians can find little to complain about Obama's recent "conversion" to enterprise-focused concerns and move to the "center", for a libertarian who sees so many masks in the political realm, further consideration and much caution is called for.

I am one who doesn't believe a conversion has taken place -- after Obama's meeting with Bill Clinton and appointment of Bill Daley, it was obvious to me that first we'd see razzle, then we'd see dazzle. As I wrote in a previous post about The Very Important State, The Very Important Leaders of The Very Important State are not going to turn the market loose for any amount of creative destruction, innovation and bottom-up economic growth. In stead, we'll see the further development of State Capitalism as The Very Important State Leaders weave a global web with our weaving partners China, GE, Goldman Sachs and other Modern State Players. Since business has gone global, the Big States and Big Businesses are actually concentrating on Global Capitalism.

All this does nothing to create the necessary open environment in which small to medium enterprises can flourish. This current change is central planning (not direct price, wage and production planning, but rather overall management of direction of the Global Economy) on steroids. It's still statism, just statism in the service of wealth creation that's controlled by Big States. If American government policy can benefit GE, Goldman, China (which is like a Big Corporation) and the other chosen, global movers and shakers, then Obama and the progressives get what they need to provide the infrastructure development which fits into their agenda (alternative energy, high speed rail), and it creates jobs at the same time. This type of global and domestic "investment" will be sold as a new direction in which we keep apace of global changes, establishing America's position in the competitive global market.

In practice, domestically, it will amount to corporate/union welfare/favoritism and support-purchase for re-election in 2012. So, I'm not impressed by Obama's "move to the center". The center? Of what? Global statist management? Jump on board all you opportunists -- mark your place and hope they need you next year.