“I will formulate a rule which says that for every one new regulation, two old regulations must be eliminated.”
-President Elect Donald Trump, 11/22/16-
Deregulate, they say, and allow the market to sort it all out. Because of this, they believe that the minimum wage is an artificial inflation of wages that kills jobs and makes us all worse off in the long run somehow. They think that things like OSHA or the Food & Drug Administration, for all of the protections they afford, are mere burdensome obstructions placed in the way of the free market, and that the market, in its all-knowing infinite wisdom, will provide an answer for it all, eventually. We simply have to trust that it will work. We simply have to have faith, and believe.
The only problem with free market capitalism really, is that it does not work. Not only does it not work in theory, every historical example of deregulation and free market capitalism in American history has ended in an economic disaster, and we, the people, have paid the price. Every. Single. Time. In fact, there is really no example where completely unrestrained capitalism has come anywhere remotely close to working for anyone, save a few individuals at they very top rung of the economic ladder... you know, like Trump.
And for all of you small business people out there who believe that deregulation will free you of all the crushing rules and laws and taxes in your life, rest assured, that the top 1% will not help you either. Because the regulations that are crushing you are, ironically, mostly put in place by big business to keep your small business small, and from growing to become a competitor with the big business leaders who are really running things.
Economists have expended entire careers arguing the causes of the market crash of 1929. Prior to that one, there were regularly occurring lesser crashes and depressions all throughout the era of the government's laissez-fair economic policy. Laissez-faire (hands off, or not to touch), by the way, is an economic system in which business is free from all restrictive government interference such as regulations. Aside from causing countless recessions and crises, the policy also led to the era of the trusts, where one or two individuals established control and monopoly dominance over entire industries, and the vast majority of the populace lived in crushing debt and poverty.
The crash of 1929 itself was caused by overextended speculation, and a bubble that could not have been made possible without deregulation. The depression that followed was amplified by a totally free agricultural market and the overproduction that resulted. Similarly, deregulation (and policies of self-regulation) led to the savings and loan crisis of the 1980s. And more recently, deregulation in banking gave us the housing bubble and the economic crisis that followed.
Common denominators for all of these examples are deregulation, followed by short, dramatic expansion, and then scandal and complete economic system failure, ended with taxpayers picking up the financial pieces and the profiteers running out the back door in armored trucks full of cash. What is most alarming about the next round of deregulation, and the inevitable results, is that our new president will be one of the guys driving the getaway trucks full of cash this time.
Deregulation only means less consumer protections, less worker protections, and ends with the bizarre belief that industries will regulate themselves and the free market will cure everything. It is like establishing a system whereby known kleptomaniacs are given a universal key to every store in town and then asked to pay for whatever they take by means of an honor jar placed just outside the door.
Remember in the wake of the housing market crisis when we rounded up all of the perpetrators and threw them in prison? No? Oh yeah. That's because it didn't happen. Deregulation, and the lack of oversight and laws made all of that possible. The financial CEOs got richer selling bad mortgages. The stock jobbers got richer bundling them and selling those loans. And when it all came crashing down and everyone else lost jobs and homes and retirement 401k's, we paid to bail them all out, and guess what? They got even richer. Thanks deregulation!
More recently, the CEO of Wells Fargo oversaw the largest outright consumer theft by a financial institution in recent American history when 5,000 employees opened over 2 million accounts for people without their consent. Guess what happened? While they were busy opening those accounts, the top brass got richer. And when the shit hit the fan, they fired all 5,000 of the low level employees who were doing what they were told to do. And the executive who oversaw it all retired with stock options estimated at $125 million, and $20 million in bonuses paid out while the fraud was going on. Thanks deregulation!
We already live under an economic system that works only to enrich those who need it the least. It is a system where a poor man can get thrown into county jail for stealing a loaf of bread and rot there for months for lack of bail money. It is a system where a rich man can rob billions of dollars from millions of people, and expect only to get richer as a result. Deregulation only serves to widen the already deep disparity within this capitalist chasm.
Before you start grumbling that the author of this blog is just a sore loser who is upset about the election result, know that it is my opinion that Hillary (with deep ties to Wall Street) would have only been slightly better on this front. The difference would be (as it has so often become with our two parties) the difference between a Pabst Blue Ribbon and a Pabst Blue Ribbon Light. While slightly more palatable and easier to drink, it is only a diluted sampling of the same shitty beverage.
As I write this, the Dow has closed at a record high above 19,000. The stock jobbers are giddy with anticipation of complete Republican control of government and all of the deregulation they will bring with them. Barring some unforeseen war caused by a foreign leader making fun of Trump's tiny little hands in a tweet, history tells us we can reasonably expect a market expansion of biblical proportions. 401ks will almost double and we will dance in the streets with exuberance, dizzy from champagne and fat investment portfolios.
In the midst of it all, there will be another push for private conversion of social security funds to individual accounts in the stock market. It will seem like not such a bad idea at the time because of all the money that is being made by everyone else. Then, sometime thereafter, in a few months, or a few years, the bubble will burst.
Retirements will be lost. Unemployment will skyrocket. Life savings will vanish. And Trump and Company will drive off into the sunset with all of it. This will happen again, and again, and again, until the working classes in this country stop believing it when billionaires pretend to be our saviors. It will only end when we, the people, begin placing as much faith in ourselves as we do in a failed economic system designed to keep us all in bondage.
Unbridled free market capitalism does not mean freedom. It is, in fact, the antithesis of freedom. Instead of creating equality, it breeds disparity. Instead of schools, it builds prisons. Instead of community, it builds walls. For it to survive it depends upon all of us, to keep doing what we've been doing, to simply vote and to trust, and most of all, to believe.
"Capitalism does not permit an even flow of economic resources. With this system, a small privileged few are rich beyond conscience, and almost all others are doomed to be poor at some level. That's the way the system works. And since we know that the system will not change the rules, we are going to have to change the system." -Martin Luther King, Jr."-