Our economy doesn’t function well without strong government oversight, regulation and demand-creating “stimulus.” We also need strong government to empower and protect us from those (foreign and domestic) who would keep us down and under their control. But the ones making big money from things that hurt our economy — and us — use that money to weaken our government, keeping us from stopping them.
Paint this picture in your mind. When a downturn in the “business cycle” begins:
1) Every company seeks to maximize its own profits, and cut its losses. Companies try to employ as few people as possible and pay as little as possible. (When there are more customers they hire to meet the demand, when there are fewer cutomers they lay off.) This is in the interest of each individual company but:
2) The people who work at one business are the customers of other businesses. When all of the businesses are minimizing the number of workers and cutting wages, businesses find themselves with decreasing sales (Falling demand.). So they have to lay more people off and cut wages further. In the larger overall economy:
3) This becomes a self-reinforcing downward cycle. People are laid off or their wages are cut so they cut back their own spending, which means they are not going into stores, buying cars, etc. so those businesses lay people off and cut wages… Falling demand causes demand to fall. (The economy lost 815,000 jobs in Bush’s last month in office.)
4) Individual businesses cannot worry about whether laying people off hurts the larger economy’s customer base (demand), they are just dealing with the effect on their own business now. They can’t look at the bigger picture of the economy. This is not their job. But it has to be someone’s job. So:
5) Businesses need a government that manages the bigger picture for an economy to work. Government is the authority that looks at the larger picture. Government is We, the People asking if individual actions are good for all of us when everyone does them — are they good for the larger economy? — and what can we do to make sure actions when done by everyone are not hurting the bigger picture. Government can also ask what can we do to compensate for the effect of individual actions on a mass scale (stimulus). It can work to mitigate the damage (unemployment benefits, food stamps).
This is why the “stimulus” stopped the crash that was occurring in the economy. Look at this chart and you can clearly see that the stimulus reversed the downward spiral that was occurring. The red lines, heading downward, were the self-reinforcing downward spiral. The blue lines, heading back upward, show how the stimulus reversed that.
When Money Influences The System
7) Even in a downturn some businesses are doing just fine and even getting rich, so they don’t care how what they are doing is affecting the larger economy — the rest of us. They might even want the downturn conditions to continue or even increase. They don’t want government coming to them when they have it so good and saying, “you have to stop doing that because it is hurting the rest of us.”
6) Those individuals are getting rich so they have money. If we allow money to influence our system, then the businesses who are making money from things that hurt the rest of us will of course use their money to keep their good thing going, even if it works against the larger good, and could even eventually collapse the system. They don’t care about that, they’re getting rich.
Government is the part of the system that looks at the bigger picture and makes sure the system isn’t doing things that hurt the economy. Individuals in the system have to look out for their own interest. This is why government looks out for everyone’s interests. It is the only part of the system that can do this.
Weakening government weakens the part of the system that fixes things that hurt the economy and the rest of us. Businesses that are doing well don’t care, they are getting rich now, even if it is killing the golden goose that is our economy. And business that are not doing well will want to do the things they need to do to try to save themselves, even if that hurts the rest of us.
That’s where government has to come in. And that’s exactly where those that are hurting the economy don’t want government to step in.
We are in the mess we are in because we have weakened government and allowed big money to buy policies that benefit big money. Think of all the ways big businesses do things that hurt the economy — and hurt us — but are able to continue because they are able to use the money they are making to keep government from stopping them.
Some Make Big Money Hurting The Rest Of Us
* Tobacco still kills more than 400,000 Americans every year, and still causes the rest of us to have to pay huge medical costs for those it injures.
* Oil companies block us from doing something about climate change and oil imports.
* Big banks stop us from doing something about the rampant fraud and “rent-seeking” (look it up) they are engaged in.
* example after example after example of big-money working to weaken our government so it can’t stop them from draining and harming us and the larger economy.
The ones we are hearing from, the ones complaining about “too much government,” are the ones who are making a ton of money doing things that are hurting the rest of us, and who know that the rest of us (government) would stop them if they don’t use the ton of money they are making to stop us.