After reading Jack Van Ens’ column “A
fiscal diet for Wall Street’s fat cats” which was published in the October 21
Denver Post YourHub, I had to write a few words in response. Van Ens presents the leftist view of the
causes of the current economic disaster and lays the blame on Wall Street and
the so called wealthy 1%. Van Ens echoes the progressive belief
that the current economic down turn is all the fault of greedy bankers and Wall
Street. Van Ens engages in the blame game. We love to blame
“The Man.” In this case the popular target is Big Business and the
rich. This attack upon big business and the wealthy of our country
is not new. The same thing happened during The Great Depression by blaming Wall
Street which is exactly what Van Ens proceeds to do in his article.
Van Ens starts out by blasting Herman Cain and Mitt Romney for their comments
about the economy, and he says that they need a refresher course on U. S.
financial history. However, Jack also shows a lack of understanding
when he proceeds to blame Big Business for “playing a leading role” in the
Great Depression and claims that President Roosevelt’s Big Government came to
the rescue and cleansed the temple of these “unscrupulous money changers” who
get the blame for that economic collapse.
The progressive political viewpoints of Keynesians such as Jack greatly color
their analysis of historic events that occurred eight decades ago. The
Keynesian versus Monetarists debate continue as to whether the Great Depression
was primarily a failure on the part of free markets or a failure of government
efforts to regulate interest rates, curtail widespread bank failures, and
control the money supply. Those who believe in Big Government believe that it
was primarily a failure of free markets, while those who believe in a smaller
role for the state believe that it was primarily a failure of government that
compounded the problem.
The Monetarists, who believe that the Great Depression started as
an ordinary recession, but that significant policy mistakes by monetary
authorities (especially the Federal Reserve), caused a shrinking of the
money supply which greatly exacerbated the economic situation, causing a
recession to descend into the Great Depression. Monetarists,
including Frederick Hayek, Milton Friedman, and Ben Bernanke argued
that the Great Depression was mainly caused by monetary contraction, the
consequence of poor policy-making by the Federal Reserve System and continued
crisis in the banking system.
As the Depression wore on, Franklin D. Roosevelt tried public works, farm
subsidies, and other Keynesian devices to restart the US economy. According to the Keynesians, this improved
the economy, but the Monetarists will tell you that Roosevelt’s action
prolonged the suffering by throwing money into Big Government stimulus programs
that failed and did not bring the economy out of recession for 10 years.
Most historians and economists partly blame the Smoot-Hawley Tariff Act of
1930 for worsening the depression by seriously reducing international trade and
causing retaliatory tariffs in other countries.
The current debate about our economy is playing out very similarly. My
Keynesian friends tell me that the ongoing decline of the private sector has
absolutely nothing to do with the $14 trillion federal debt and the $1.5
trillion annual deficit. In his article, Van Ens claims the Wall Street
“money changers” are the villains. Progressives such as Van Ens believe
that the wealthy skated scot-free from the meltdown, benefited from the
bailouts, and are primarily responsible for the loss of jobs, and that
government has nothing to do with it. But that belief presupposes that
Wall Street and Big Government are somehow natural antagonists, which is
certainly not true. Recent Republican and Democrat administrations were
and are full of Wall Street veterans.
Van Ens says that Big Government needs to “cleanse Manhattan’s concrete canyons
of rotten financial deals.” However, our current problems can be
traced to the history of crony capitalism during recent president’s
administrations. As Denver talk radio host Mike Rosen says in one
of his Denver Post columns, “It's not surprising that leftists, who worship at
the shrine of big government, ignore the foundational role of government in
this fiasco. If they laid the blame at the feet of their savior, it would
contradict their blind faith in statism.” Big Government is an
equal partner is this economic destruction as is clearly evident in the rotten
financial deals such as Solyndra, Fannie Mae, and auto company bailouts.
Congressman Paul Ryan gets to the heart of the problem when he says we should
stop this Big Government and Big Business collusion and "lower the amount
of government spending the wealthy now receive." The "true sources of
inequity in this country," he says, are "corporate welfare that
enriches the powerful, and empty promises that betray the powerless."
The real class warfare that threatens us is "a class of bureaucrats and
connected crony capitalists trying to rise above the rest of us, call the
shots, rig the rules, and preserve their place atop society."
As Denver Post columnist Vincent Carroll says, “the political left needs a
bogeyman to buttress the thesis that growing income inequality is destroying
the middle class and requires higher taxes on the rich to rectify the
trend.” If we are not careful, we will fall to the progressive
politicians’ rhetoric and do the same thing this time as was done during the
Great Depression.
Let’s remember that
banks and their Wall Street investors didn’t force millions of Americans
against their wills to sign loan agreements. While there were some predator
lenders the vast majority were simply following the rules and regulations set
by our government. If you bought a house you cannot afford you are the
one truly at fault. No one forced anyone to sign a loan they did not
want.
Let’s stop blaming Big Business. Sure there is greed on Wall
Street. No one in America is promised riches or wealth or even a free
meal. It is time we all stopped looking for a rich Bogeyman to
blame Lets remember that when big business thrives so does the
common worker. Big business is not the problem; it is the solution. The
way out of this crisis is to stimulate business giving them incentives and
advantages that help them not hinder them. Part of the auto industries problems
lies in all the regulations Washington has placed upon them. Big business
creates jobs that last. While we should never simply let businesses run rampart
we should do all that we can to allow them to flourish. Doing so will then
indeed cause our economy to turn around. Big business is not the enemy of the
working class but its friend. Let’s
encourage Big Business to get bigger, make more people rich, and rich people to
get richer. While giving executives of failed corporations large bonuses is
outrageous, that is not what got us into this recession. It might make for good fodder for the
politicians, but it does not give us a solution for our present recession.
Let’s stop playing the blame game and work for true solutions to more quickly
recover from this recession.
Let’s stop blaming the wealthy. Rich people buy stuff regular people make
and sell thus spreading the wealth. Remember the Luxury tax a few
years back? The thinking went that rich people should pay more taxes so let’s
tax luxury items like yachts. Taxing the rich, who can afford more taxes would
alleviate the tax burden of the common man and thus give him relief. What
happened was the price of yachts went up and people stopped buying yachts due
to the tax. As a result, middle class workers who made yachts got laid off. The very tax that was suppose to help the
common man turned around and took his job. That tax was quickly repealed and
rich people went back to buying large ticket items that in turn keep regular
people employed.
An influential public speaker, Reverend William J. H. Boetcker, said in
1916 (in a quotation often misattributed to Abraham Lincoln), “You cannot
strengthen the weak by weakening the strong. You cannot lift the wage earner by
pulling down the wage payer. You cannot help the poor by destroying the
rich.” Let’s stop playing the blame game, and let’s stop the excessive
government spending and crony capitalism.
