21st Century Socialism and the War on (Small) Business

UnknownWhen I wrote about the “war on business,” some commenters dismissed this, saying profits have been strong, while it’s middle class jobholders who are hurting. True, up to a point. Big, established corporations, that can work the political system, and get government subsidies and protection against competitors, are indeed doing well. But smaller, newer firms face ever mounting obstacles. They’re tied in knots by complex regulatory schemes like Sarbanes-Oxley and Dodd-Frank (which big firms can cope with). And we get roughly all our net job growth from small businesses. If they’re struggling, and big firms needn’t compete with them for labor, no wonder worker pay is anemic.

California is a poster-boy for the war on (small) business. While the Silicon Valley scene is humming, because those firms gotta be there, many other companies are fleeing (or not starting). Exemplifying California’s business landscape is CEQA, an environmental review law that allows anybody to sue to stall any project. So if you want to open a new gas station, one nearby can sue to block you. Anybody with a financial motive can hold any project hostage by threatening to sue under CEQA, to extract concessions. Unknown-1Labor unions do this all the time. A recent issue of The Economist quoted a California observer about the state’s attitude toward business: “fuck you, fuck you, fuck you, fuck you, fuck you, and fuck you.”

But California is a business paradise compared to Venezuela, which the late President Hugo Chavez brayingly set on a path to “Twenty-first Century Socialism.” Among Venezuela’s “worker’s protection” laws is one effectively making it impossible for a business to fire anybody. There’s always the law of unintended consequences, but here the consequences are entirely predictable: workers who can’t be fired don’t work very hard. Or, for that matter, at all; absenteeism is rampant. Firms have to bribe employees to leave. And meantime the government laments sagging productivity!

Unknown-2You might think such “worker protections” applicable to the private sector would also cover government workers. Don’t be silly. Typical of authoritarian “socialist” regimes, in the Venezuelan worker’s paradise government workers have almost no rights at all, can be fired peremptorily (better stay politically correct), and don’t even think about organizing a strike or protest because they’ll throw your ass in jail.

Venezuela’s disaster may be approaching a climax, as the dysfunction of its “Twenty-first Century Socialism” wrecks the country. The regime, blinded by its twisted ideology, responds with even more counterproductive policies. I’m almost sorry Hugo Chavez didn’t live to see the denouement.

Socialism might be benign if people were angels. But they are not, power corrupts, and giving government so much economic and social power is a very bad idea. Twenty-first Century socialism isn’t any upgrade on the Twentieth Century version.

Yet lefties enjoy making mock of righties for throwing around the word “socialism,” as though it’s a bogeyman either imaginary or harmless. imagesI recently heard a re-broadcast interview with the late Pete Seeger, the folk singer who never really repented his Communist past, nor ever let a cross word pass his lips about any “socialist” regime (like Castro’s). The word “socialism” came up, with the usual sniggers, and Seeger said (paraphrasing), You know, the Post Office is a totally socialist thing, it’s textbook socialism, entirely owned and run by government; and of course everybody loves it.

Unknown-3Then Seeger surprised me by adding: But you know, no government-run post office in the world ever thought up anything like Federal Express; it took the private sector to come up with it; such innovation just isn’t in the DNA of a stodgy government bureaucracy.

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8 Responses to “21st Century Socialism and the War on (Small) Business”

  1. bruce Says:

    the question is, who? Who in the political world can set a course.
    unfortunately I think its the silver tongued flimflam man who meanders the ship of state. This is what makes a great leader so invisible in our lives.
    Otherwise its the few hearing what they know vrs the masses hearing what they want to hear.

  2. Herb Van Fleet Says:

    Optimist,

    I don’t have much to add to the comments I made on your “War on Business” article as they would certainly apply here.

    That said, I think it should be pointed out that the big companies love government regulations. They know the little guys can’t compete if they have to comply with all those rules. If fact, those businesses are often acquired by the bigs for pennies on the dollar.

    And did I mention that the lobbyists for the big companies also help write the rules in ways that help make it tough for small companies to comply? I know, shocking isn’t it? Point being, it’s not the government that’s trying to fuck the small businesses, it’s the big guys that want to keep them from competing. Not exactly the Invisible Hand at work, is it?

    As to California’s environmental quality act allowing law suits and the like, virtually every state has similar laws. And, by the way, the large companies are just as exposed to liability as the little ones, if not more so (think deep pockets). If the private sector enterprises would stop polluting the air and water, there wouldn’t be a need for all the rules. Likewise, if the citizens of CA want to minimize the requirements in their environmental laws, then they just need to elect legislators who promise to do just that.

    And it is absurd to think we, the USA, is anything close to a socialist state. In fact, we are probably the least socialist of any of the other developed nations on the planet. Now, if we start offering free health care and free college education like most other civilized nations, then the claim of us being a socialist state might be credible.

    At the end of the day, it’s we the people who are supposed to determine, democratically, how much government we want. But with a dysfunctional Congress that has a 10% approval rating (an F minus), well, good luck. In fact, a more accurate descriptor for our government these days is “Plutocracy.” The days of us being a democratic republic are pretty much over. And we are damn sure not heading in the direction of socialism.

  3. rationaloptimist Says:

    Not true that other states have environmental laws equivalent to California’s, an open season for excessive litigiousness that others sensibly avoid. “If the private sector would stop polluting there wouldn’t be a need for all the rules” — nobody questions a need for rules. If people would stop robbing we wouldn’t need laws against theft. The question is whether the rules are functional or dysfunctional.
    Blaming it all on Congress and saying we are no longer democratic is a popular trope, but wrong. At the end of the day we get the Congress we elect, and Congress is the way it is because voters are the way they are.

  4. Herb Van Fleet Says:

    “Not true that other states have environmental laws equivalent to California’s, an open season for excessive litigiousness that others sensibly avoid,” you say. Well, it’s true that I haven’t reviewed the environmental laws in all 50 states to see which have “excessive litigiousness”. Besides, I don’t know what that term even means.

    Nonetheless, the environmental laws in California have not been a bearer to business growth, litigiousness notwithstanding. According to report in the June 15th, 2013, edition of USA Today, California was 5th highest in the country with a GDP growth rate of 3.5% in 2012. (Tied with Minnesota.) Interestingly, Oregon and Washington, both with fairly high environmental standards, were 3rd and 4th respectfully in GDP growth rates.

    The private sector growth in these three states obviously doesn’t seem to be too effected by stricter environmental laws. So, what you say is simply not true.

    Then you say, “At the end of the day we get the Congress we elect, and Congress is the way it is because voters are the way they are.” Well, if you believe that, I’ve got a bridge in Brooklyn I’d like to sell you. But I understand. Being an optimist often requires putting on the blinders.

  5. rationaloptimist Says:

    So — you don’t believe voters have anything to do who’s in Congress? I suppose you believe they got there by the political equivalent of immaculate conception. Talk about buying bridges!

  6. Ozymandias Says:

    rationaloptimist: I think Herb is talking about how the current voting mechanisms in the US are not corruption-proof, and that there is serious speculation as to whether most elections are non-biased.

  7. Herb Van Fleet Says:

    Optimist,

    Congress is NOT the way it is because the voters are the way THEY are. Consider the fact that Congress has only a 10% or so approval rating, yet, on average, 95% of all incumbents are reelected. It’s the incumbents who have the piles of cash needed for their campaigns, while the challengers, with little name recognition typically don’t have enough contributors to compete.

    Consider too the gerrymandering to get districts where the vast majority of are of a certain political party. See Illinois 4th district, Maryland’s 3rd district, and Pennsylvania’s 12th district for some extreme examples.

    Then there is the voter turnout. According to the Bipartisan Policy Center, “Voter turnout dipped from 62.3 percent of eligible citizens voting in 2008 to an estimated 57.5 in 2012. That figure was also below the 60.4 level of the 2004 election but higher than the 54.2 percent turnout in the 2000 election. Despite an increase of over eight million citizens in the eligible population, turnout declined from 131 million voters in 2008 to an estimated 126 million voters in 2012 when all ballots are tallied. Some 93 million eligible citizens did not vote.”

    Now, individual races will vary wildly, of course, but it’s safe to say that, on average, the winners got elected by roughly 1 out of 4 eligible voters. Hardly a majority.

    By any standard, then, these statistics prove that we have a limited form of democracy where voters are manipulated or don’t even take the time to show up.

    Congress is the way it is, Optimist, because the political parties and their rich contributors make it that way, not the voters.

    Now, this is your blog and you can say whatever you want. In fact, I’ve enjoyed most of your postings since becoming a follower. But a little research in support of your claims and assertions would be helpful, especially for readers like me who tend to question everything.

    Now, about that bridge . . . .

  8. rationaloptimist Says:

    People hate Congress — but, in general, love their own Congressman. Why? Because that Congressman generally behaves the way they like. For all the problems cited by commenters, at the end of the day nobody gets elected without a majority of voters backing them. (To not vote is of course effectively a vote in favor of the status quo; it’s a complete fantasy to imagine that if only 100% voted, results would be different.) Regardless of any “manipulation” by powers-that-be, voters still have the option of saying “no.” That they don’t is certainly frustrating for those like me who’d like to see different outcomes. But that’s what one gets living in a democratic country.
    If you want to blame someone for what Congress does or doesn’t do, look in the mirror.

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