Conservatism or Corporatism?

[bord-du-rasoir.livejournal.com]

What accounts for the spikes in these graphs? Conservative (free market) policy or corporatist (government intervention) policy?









Why'd average Wall St. bonus pay recently quadruple average annual salaries? Why'd the financial sector recently triple the nonfinancial sector? Why'd the highest incomes recently increase 36 times faster than median family income?

Provide concrete explanations as to how X (policy) caused Y (economic indicator). Point to specific legislation or executive orders.

The liberal position is predictable: The unprecedented extreme growth in the financial sector and increased inequality is bad. Free market policy (deregulation of banks --> derivatives market expansion --> collapse) is to blame.

I'm more interested in the conservative position: How do you explain the unprecedented growth in the financial sector and the increased income inequality? What're the causes? Is corporatism (government interventionism) responsible? If so, how? Do you draw a connection between the above figures and the financial collapse?

I honestly don't understand the conservative position.

Comments

[mahnmut.livejournal.com]

Conservatism in the US, if I'm getting it right, is touted as being the home of the 'average Joe', yet it also tends to represent the interests of big business. The 'average Joe' conservative will defend big business whilst the self same big business demands lower wages and more time at work for the 'average Joe'.

It baffles me how conservatives will go off on a bender about guns, abortion and a god (small g), yet continue to be silent in the face of increasing demands on workers; an issue that has immediate material and tangible effects on them.

Surely the interests of corporate America (increased production for less money) is in conflict with the interests of the average Joe (less work for more pay)?

[badlydrawnjeff.livejournal.com]

Surely the interests of corporate America (increased production for less money) is in conflict with the interests of the average Joe (less work for more pay)?

No, I don't think it is. Conservatism is at minimum about the acceptance that the rich are necessary and that incentives are encouraged. Big corporate money doesn't keep me from having a job or a good wage, it enhances it.

[mahnmut.livejournal.com]

It does, when done in a socially responsible way. Ultimately it boils down to the question: does corporate profit trump the social responsibility that the corporation is having toward its employees and the communit(ies) it operates in, or not. I admit I have no data to base my impression on, but it is that the former is the case with the majority of large-scale corporations. What is yours?

[badlydrawnjeff.livejournal.com]

Ultimately it boils down to the question: does corporate profit trump the social responsibility that the corporation is having toward its employees and the communit(ies) it operates in, or not.

A corporation's social responsibility is to provide the product/service that it is in business to provide. Beyond that, you'll be hard pressed to convince me that they have some significant responsibility beyond that.

[wyrrlen.livejournal.com]

Well, you're neglecting that income inequality leads to political instability. While corporations may be benefitting greatly in the short term by exacerbating income inequality, it ultimately leads to an environment where it is more difficult to achieve financial success. I'm reminded of the story (possibly posted on talk politics?) of the inequality gap between Saddam Hussein's supporters and the iraqi populace being much greater than the income gap between the affluent and poor in european countries - it turned out that where the gap was smaller, the affluent made significantly more money than where the gap was greatest.

Perhaps I wouldn't call this a responsibility, though. I think it is more of an imperative to maintain stable markets in order to maximize financial outcomes.

[badlydrawnjeff.livejournal.com]

Well, you're neglecting that income inequality leads to political instability. While corporations may be benefitting greatly in the short term by exacerbating income inequality, it ultimately leads to an environment where it is more difficult to achieve financial success.

Does it in a first world nation like the US, though? There is some class warfare in political play right now, but we're also a nation where the poor are able to have things we'd consider luxuries, like televisions and cell phones.

[mrbogey.livejournal.com]

'Well, you're neglecting that income inequality leads to political instability. '

I do not accept that premise as true.

Inequality is nebulous and worth little outside of absolute poverty.

[wyrrlen.livejournal.com]

(laughs) Oh gosh, I referenced the Green Party advert. I don't disagree with that part of the post though, obviously.

[green-man-2010.livejournal.com]

that's ok, I forgive you :)

But yes, It is true that even in the west, we get more social stability, we get less crime and less mental illness when people are more equal and the extreme poverty gets ironed out.

Go see the link on the end of my last OP...

[majortom-thecat.livejournal.com]

Wow. I hope I never end up working for or living near a corporation that has such limited principles!

[badlydrawnjeff.livejournal.com]

Thankfully, you have that choice!

[majortom-thecat.livejournal.com]

Not really. Sometimes there aren't a lot of options.

[mrbogey.livejournal.com]

The desirability of a choice does not negate the existence of the choice.

We're in a nation where our forefathers risked their lives just to move from one state to another yet people today act as if the world will end if there is a change in their lifestyle.

[majortom-thecat.livejournal.com]

I don't mean to pry, but are you one of those people who dress up in period costumes at tea party rallies?

Sorry, that wasn't nice. I do agree that changes in lifestyle are sometimes inevitable and crucial but shouldn't include things like having to live with pollution and living in poverty when employers can easily afford to pay better.

[badlydrawnjeff.livejournal.com]

There are always options.

[majortom-thecat.livejournal.com]

That is a lovely thought, but I'm not convinced.

[anfalicious.livejournal.com]

Don't you know, everyone can afford to live in a nice middle class neighbourhood.

[majortom-thecat.livejournal.com]

Yeah, I've seen those preachers on tv. You just have to really really believe that God wants you to have that house, and then send in your money so you can be blessed.

[abomvubuso.livejournal.com]

Reminds me of the so-called "technological unemployment", a much neglected phenomenon.

[abomvubuso.livejournal.com]

Good link.

[rasilio.livejournal.com]

Actually this is incorrect.

The Republicrat party is a party of big business, of course so is the Democan party, they just each favor a slightly different set of big businesses.

However the conservative movement actually distrusts big business at best, they are MUCH more aligned with pro small business policies.

That said the what you refer to as the interests of corporate America sufers from the broken widow falacy.

Let us assume that a corporation doubles it's income and halves it's cost. It's profit has now quadrupled. What happens to those huge profits?

Well, some will be reflected in increased stock prices for that company and who are the majority stockholders? Common Peoples retirement and investment accounts. So the common man benefits.

Even for the big time investors who hold that company though, they take the profits they make from that increased stock price and invest somewhere else in the economy allowing another business to grow and create new jobs, more jobs = more demand for labor = higher wages. Again the common man benefits.

Now, other people all of a sudden look at that marketspace and see the huge profits that company makes and decide they want a piece of that. They either expand their existing businesses into it or open new ones. Both create jobs, good for the common man once again.

Once these competitors get off the ground there is now price competition for the original company as the new players can undercut the existing companies prices and still make a significant profit. In theory they could charge as little as 25% of the original company and still make the profit it started with. The end result however is a price war as the price of the commodity or service is driven down to near the same profit margin it had originally which leads to lower prices and therefore once again a benefit for the common man.

Anyway you cut it a benefit to the corporation is a benefit to the average Joe with one exception. When a corporation gets large enough that it can use the power of the state to alter the business rules to lock out competition or raise the competitions costs relative to their own and this is the source of conservatives not being fans of big business, because those big businesses drive the government to seize more and more power so they can offer more and more benefits to the businesses that power the politicians campaigns.