Replacing Big Government with Bigger Government

Jeff  Carter
|
Posted: Oct 18, 2011 12:01 AM

The media is on a full court press to bring Occupy Wall Street (OWS) to the fore. They are even tying Greek protests to OWS, even though the Greeks have been marching practically every day for the better part of a year. In other countries of Europe, people have been marching as well. The prospect of changing government programs is driving European people into the streets. Clearly, the big government model hasn’t worked.

Is that what Occupy Wall Street protestors want here in the US?

In a sign that the establishment leftists have grabbed control of the movement, Obama yesterday at the dedication of the MLK monument said it was time for the unemployed to rise up. I ask the OWS crowd, is it European socialism or communism you want? Because that’s who is driving your movement.

The answer to the problems the US has is not bigger government. More government programs are not going to be a salve for what ails you.

Look at Europe. Huge programs, huge safety net. They are out of money. Sooner or later private companies have to produce something to sustain the lifestyle you would like to be accustomed to. Governments don’t produce anything, and when they do they allocate resources poorly and we get bankrupt companies.

I pulled this geometric drawing off Chicago Boyz and I think it’s a good broad representation.

Okay Occupy people, ignore the emotional rhetoric and think about this logically.

Big government sets regulatory policy using a large, faceless bureaucracy. The bureaucracy is unaccountable to voters, because our elected officials can no longer manage and control all of it. Big corporations have the money and wherewithal to either lobby big government and create opportunities for themselves-or they are so big they can avoid the effects of it. Small and medium size businesses can’t, and start up businesses that are successful are so small they aren’t affected.

The answer to this conundrum is not bigger government to oversee and correct the problems of big government.

The answer is to decrease the effects of big government and let markets work to curb the influence of big corporations.

As an OWS protestor, you may not believe in the invisible hand, or the principles of Adam Smith. However, I can tell you from personal experience they work if left unspoiled by humans. The problem with markets happen when man makes a value judgement and monkeys with the system.

For example, there is a lot of unemployment out there. If we counted everyone, it might be over 20%. However, the government has stepped in and forcibly created unemployment with the establishment of the minimum wage. Unions have created even more unemployment by negotiating even higher wages. Supply and demand tells you that the higher the price goes, the lower demand is and quantity demanded (output) drops. Demand curves always slope down.

Try something less emotional. Bread. If bread is $3 per loaf, you will eat a certain quantity of it. How would your behavior change if bread were $15 per loaf?

You might say, “Those dirty bread companies are making too much money off of me.” But, producing that bread isn’t free. If the government sets the wage the company has to pay the employee, and unions further drive up the cost, it makes the bread more expensive. Going further, if the government sets an ethanol policy that makes the grain that goes into the bread more expensive, the cost to produce the bread has to go higher.

As the bread company manufacturer, I have a choice. Cede to the Occupy Wall Street demands and give them free bread, or at least bread way at a price way below what it costs me to produce and go broke. Or go out of business.

That’s exactly what is happening in all segments of the economy today. Businesses are choosing to go out of business, or they are not even starting. Huge multinational corporations can avoid the pitfalls of big government and can make a profit.

Big government always benefits big multinational business.

It’s exactly what we are seeing with Dodd-Frank and new banking laws. Big banks benefit. Medium and small banks get squeezed.

If Occupy Wall Streeters had any common sense, they would be marching upon the bureaucratic offices of the government. They would be marching upon the biggest supporter of big government and increased regulation that we have ever seen, Barack Obama.

But, I bet most of them voted for him. If you are a member of OWS that is ticked off-join the Tea Party. Don’t blindly follow the hard left wingers that are using you as a puppet to get what they want.


John Ransom | Create Your Badge

Twitter http://twitter.com/#!/bamransom -See more top stories from Townhall Finance. New Homepage, more content. Be the best informed fiscal conservative.