Tuesday, September 15, 2009

Free Market for individuals, Government aid for corporations

We hear propaganda about personal responsibility and the effectiveness of the free market constantly, but that standard is only applied to the poor. For instance; welfare, foodstamps, rehabilitation centers, leniency on crimes involving theft and free medical care are all examples of things that conservatives decry as government interference in the free market. The Feds, they say, take their money in the form of taxes and unfairly redistribute it into social spending. Why, then, is this argument not applied to all other forms of government spending? If the free market is better for rewarding efficiency, then government subsidies to corporations are decreasing the efficiency that conservatives say will be brought to the people by less government. Of course, this obviously isn't the case; the government subsidies allow those corporations to thrive.

One of the best examples of this is the existence of corporations themselves. An LLC (which stands for "Limited Liability Company") is given special government considerations, both legally and financially. No owners can be sued for actions taken by the company, nor can they be prosecuted for criminal acts that the management is responsible for in an effort to inflate prices. On the surface, these investors are detached from the immoral behavior under a guise of ignorance. What can they do about the decisions of management? They control only the capital supply, not the procedure or the operational day-to-day, so how could they be held responsible for firing labor organizers, dumping chemicals or hazardous working conditions for their workers? Of course, this a flimsy, thinly veiled excuse that's easily dismissed simply by seeing the shareholders take action whenever these things are absent; if a Chief of Operations doesn't stop his employees from Unionizing, or pushes too hard on safety or environmental standards, he is easily replaced (and well compensated to ensure loyalty to 'the company', which means not the employees of the company but rather those that make money from the work of the employees).

Another example are the subsidies that large corporations, exclusively owned by the wealthy elite, receiving not only friendly contracts, but subsidies and grants that amount to money being taken from the taxpayer and given freely to military contractors, agricultural lobbies, health care institutions and others in the guise of aiding struggling Americans. Again, this disguise is transparent when you consider that the money spent on these subsidies could go directly to infrastructure, education or general welfare spending rather than being drained through the corporate sifter and the money pocketed by the already wealthy.

Perhaps the most stark illustration are the recent bailouts and low interest rates for large banks. Rather than the owners of these institutions having their property devalued, the tax payer is penalized and the debts of the wealthy covered. Indeed, the government now lends money with no interest rate to large banks, which in turn charges high interest rates to those it re-lends the money to, allowing the rich owners of Goldman Sachs to post record profits while 49 million Americans go hungry.

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