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The Myth of Over-Regulation

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Perhaps the worst crime committed by the corporate Oligarchs who now dominate our lives was their successful efforts to rewrite much of “history”, and then use the mythology they created to brainwash us.

The two most insidious and damaging of the myths they created were that unionization was bad for economies and that regulation was bad for economies. The facts are quite clear here, however. The 1960’s marked the absolute zenith in the Western world for both unionization and regulation. Consequently, the 1960’s also represented the all-time peak in our standard of living, and the all-time peak in the prosperity of our economies.

Since that time (and during the rise of the Oligarchs), they have pursued two goals with ruthless tenacity: union genocide and the abolition of all “regulation”. Consequently, over the past 40 years we have seen our standard of living plummet across the Western world, while our ever more anemic economies drowned themselves in debt. This particular piece will focus on the irreparable economic damage which the Oligarchs have caused with their myth of “over-regulation” – and the era of deregulation they spawned.

The examples of the failure of this policy are practically infinite, as “deregulation mania” has engulfed the tiny minds of our politicians and (supposed) “regulators” throughout the past four decades. One of the first (and most illuminating) examples of deregulation at work was the destruction of the global airlines industry.

Because of the massive capital investments required in this sector as part of the continuing costs of doing business, the oligopoly model was a necessary evil in the airline industry. Smaller nations had a single (and often public) airline which represented their entire market, while the largest of markets (the U.S. ) had a handful of companies in its own airline oligopoly.

During the 1960’s the airline industry represented a triumph of capitalism: an oligopoly model which was not inherently parasitic and/or self-destructive – despite the fact that roughly four centuries of capitalist theory has taught us that monopolies and oligopolies are the ultimate evil.

How did the global economy avoid being victimized by the airlines oligopoly? Through a veritable straitjacket of regulation. Virtually every facet of the industry was tightly regulated – in harmony with other markets – with the result being a stable and modestly profitable industry.

Then came deregulation. What has followed is four decades of bankruptcies, bail-outs, and economic chaos. The absence of regulation resulted in the Airlines Oligarchs doing what Oligarchs always do: exterminate as much of the competition as possible – and then collude with the survivors. “Customer service” has become an anachronism, as the parasitic Oligarchs take as much as possible, while giving as little as they can in return. In short, four decades of deregulation has helped no one, not even the airlines themselves.

Almost simultaneously with the deregulation of the airline industry came the deregulation of the trucking industry in North America (with our vast network of highways and supply-chains). Same result: total destruction. Bankruptcies occurred across the trucking industry. The standard of living for truck-drivers plummeted (along with safety standards) as “competition” forced the drivers to put in longer and longer hours, cut corners on maintenance, and do all the other things typical of unregulated industries.

At this point however, the Oligarchs became impatient with their sector-by-sector deregulation/destruction of the global economy, and so along came the euphemism of “free trade”, soon replaced by the even more meaningless buzzword “globalization”. To refer to the “economic theory” which supposedly justified this doctrine as “simplistic” would be much too charitable toward the global community of economists who barked their approval for it like a colony of trained seals.

To boil this movement down to its essential components, it involved simply erasing all constraints on multinational corporations (i.e. Oligarchs) while simultaneously erasing all protection for workers (primarily in the Western world). To this day, not only do these economic charlatans not understand why the economic demolition which followed did not improve the global economy, but these posers continue to insist that in fact it did improve the global economy.

It takes a special brand of intellectual dishonesty to ignore the collapse in our standard of living, ignore the destruction of our environment, ignore the massive, structural unemployment endemic in the West, ignore the imminent bankrutpcy of most/all Western nations and proclaim globalization a “success” – simply because the top 1% (and the corporations they own) became much, much, much wealthier.

A recent survey in the Land of Deregulation (i.e. the United States) shows that even the business community no longer believes or supports the corporate mythology regarding the supposed menace of “over-regulation”.  When it comes to “killing jobs”, even U.S. employers themselves concluded that “over-regulation” accounted for less than 5% of their job-cuts, while “insufficient demand” (i.e. the economic destruction caused by four decades of deregulation and “globalization”) was responsible for 95% of their lay-offs.

Similarly, less than one in five small business owners (the backbone of every economy) cited government regulation as a “problem”. Indeed, two of the hallmarks of adequate regulation are stability and certainty. Meanwhile, we consistently have to listen to the heads of large corporations whining that the reason why they are not doing more hiring is because of “instability” and “uncertainty” – the inevitable result of all deregulation.

If there was still any residual uncertainty in anyone’s mind about the absolute need for comprehensive regulation of business (especially “big business”), along with the rigorous enforcement of any/all such regulations, then such doubt has been permanently eliminated by the serial economic atrocities committed by Wall Street.

In the late 1990’s, the Clinton regime hacked away the “lynchpin” of financial regulation in the United States: the Glass-Steagall Act. It was a law put in place immediately after the last major era of insanely reckless gambling by American financial Oligarchs (the “Roaring Twenties”) and the Great Depression which followed. And for the next six decades it kept these compulsive gamblers more-or-less under control, and their sector (relatively) stable.

In little more than a decade following the abolition of that safeguard, the Wall Street banksters had “blown up” their own sector in the largest financial failure in the history of the world (by a factor of at least 100), and consequently caused a near-total collapse of the global economy.

With morally-bankrupt Western leaders not only paying off $trillions in their gambling losses, but still refusing to regulate these financial psychopaths, Wall Street then proceeded to immediately launch a campaign of economic terrorism against European debt markets (via the fraudulent manipulation of credit default swaps). This has already resulted in the obvious bankrupting of one of these nations (Greece) with the rest of these debt-saturated dominoes (and their masochistic “leaders”) doing little more than standing around waiting for the Wall Street terrorists to knock the next one over.

If all this evil isn’t enough to sicken readers already, it gets worse. After these predatory Oligarchs have already destroyed Western economies through their campaign of deregulation, these amoral predators now have the audacity to attempt to argue that the only thing which can “save us” is even more deregulation.

Such anti-logic should not surprise us. We need only look at the incompetent traitors whom our suicidal electorates have chosen to govern us. Yet again we are listening to these consummate idiots claiming that they are about to “bail out” a collection of insolvent economies who engaged in too much “money”printing and too much debt-creation – by printing more “money” and creating more debt.

The complete and absolute betrayal of the “other 99%” by our political “leaders”, business Oligarchs, and the corporate propaganda-machine has in one sense made our lives simpler. Anything/everything these entities tell us is “good for us” we must automatically reject, while any policies or doctrines which they shun we need to embrace.

Politicians, Oligarchs, and media talking-heads are unanimous in their hatred of regulation. Therefore we must embark on the most ambitious era of re-regulation in all of history.

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Jeff Nielson
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written by Jeff Nielson, October 24, 2011
Goldbug86, what BAFFLES me is the absolute lack of PERSPECTIVE among most ordinary people.

People get "mad" at unions because they are OBSESSED with the fact that their NEIGHBOUR might make a few PERCENT more than they deserve - and so in North America unions have been nearly exterminated (except for public sector unions).

Meanwhile the banksters plunder our economies LITERALLY for $TRILLIONS, and only NOW are the brain-dead serfs finally BEGINNING to protest at allowing these crime syndicates to continue to exist.

Even worse, the average person has been DUPED into believing that "public sector workers are over-paid" - when what has ACTUALLY happened is that 40 YEARS of falling wages mean that private sector workers are GROSSLY UNDER-PAID.
goldbug86
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written by goldbug86, October 24, 2011
Like it or not Unions are our only defense against financial terrorists. I also some times get angry when i see public sector unions doing whatever they want but when they shut down the ministry of finance and telling troika to shove it. Yea i like them. smilies/grin.gif
paxjds
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written by paxjds, October 23, 2011
Jeff, I have also noticed a "lack of regulation" in regards to mergers and aquisitions" over the past 10-15 years. Both parties and their Howdy Doody presidential mouthpieces have been looking the otherway when Big buisness buys out one of its competitirs. Our Congressional overseers speak of efficiencies in manufacturing and services. In reality it means more people lose their jobs, higher prices for the public and government, and more profits for big business. Mainstreet gets fxxxzz AGAIN BY WALL STREET and the government again. And these idiots in government wonder why GDP is not going up and income tax revenue is down!
From what I can tell, Europe is just as bad. In fact, a co-conspiriter when the mergers and aquisions are between the USA and Europe. This almost proves the length of reach of the Banksters as it is highly unlikely that my congressman has any idea who his counterpart is in Germany or Greece.
Jeff Nielson
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written by Jeff Nielson, October 23, 2011
Thanks Earl.

There is plenty of room for these sorts of commentaries, since THROUGHOUT the realm of economics (and public policy) we have been FORCE-FED outrageous mythology over the past few decades in MANY different areas.

In particular, the EXTREME zealotry about "small government" which has been CHAMPIONED by so many "prominent conservatives" is absolutely bizarre and hypocritical when those SAME zealots continuously sing the praises of "big business".

Anyone who argues FOR "big business" but AGAINST "big government" is at best a hypocrite, and most likely just an idiot. The SAME inherent defects which apply to "big government" apply even MORE to "big business" - since the beneficiaries of "big government" are the society as a whole, while the beneficiaries of "big business" are its TINY group of shareholders, along with the psychopaths in management.

And in fact, what we SEE are the fascists who have been the biggest boosters of big business ALSO like "big government" (in terms of a big war-machine and a big "security apparatus").

The only parts of government which such hypocrites want to SHRINK are the parts that actually HELP PEOPLE.
Earl
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written by Earl, October 23, 2011
Jeff,

Great commentary. Paxjds just "nails it" and your commentary does a good job of presenting the history and the results. Great read and I personally learned from the perspective and view you both presented.

Thank You
Earl
Earl
Jeff Nielson
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written by Jeff Nielson, October 23, 2011
Paxjds, I'm going to enthusiastically agree with your remarks - but qualify part of them.

When you claim that the U.S. government has gotten "too top heavy" I couldn't agree more. However, instead of laying off TEACHERS, and FBI FRAUD INVESTIGATORS, and GOVERNMENT AUDITORS, what the U.S. government SHOULD be doing is AXING at least 90% of the Nazis it has working in the "Defense" Department - and 100% of the Homeland Security Nazis.

You're also right that there are FAR TOO FEW taxpayers - and part of the reason the Western governments are experiencing their worst REVENUE CRISES in history. The "solution" is not more union genocide, but rather a four-day work and DRASTICALLY INCREASED union representation - so that not only are there "more taxpayers" but that they actually HAVE SOMETHING (I.e. something more than "minimum wage") to tax...
paxjds
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written by paxjds, October 22, 2011
The US Government has gotton way too top heavey with to many employeees at the federal, state, and local levels. There are not enough tax payers with so many government employees for us to afford this bloated bureaucracy of government empire building, both foreign and internal to our borders. Total government needs to get down 25% and less range for federal, state, and local. Talk about lack of efficiancy> Also government employees make more in salaries and benifits than the average private employee. This also need to end, no matter what form of government one has.
Not only have we disasterly deregulated as you point out, but we have also Over-Regulated in schools, medical, EPA, etc that are strangling our society and small business.
The US One Party system is causing this, bringing to mind the old USSR, and Fascist Germany and Italy. The USA that I grew up in the 50's is long gone. I wonder why the USA is even refered to as a Republic or a Democracy when we have a one party systems that has phony elections as if we really had two parties.
The other over-regulation going on is more and more laws taking away our liberties. Our one party system reminds me of Hitler or Mussilini's rise to one party rule while the citizens slept. Even our Courts are asleep at the wheel.
IMHO, the misguided Over and Under Regulations and Laws going on in the world will lead to Economic Collapse and a World Dictorial Government run by the Hidden and Super Wealthy.
Jeff Nielson
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written by Jeff Nielson, October 22, 2011
Sorry Abperusdisvet, but you're passing along more popular mythology here.

First of all, ALL Western economies are suffering from their worst REVENUE CRISES in history. If you adjust spending for inflation, then in real dollars spending has been steadily falling in Western nations - despite the fact that interest payments on the debts of these nations have been increasing exponentially.

The only exception to this is the U.S., and the only reason the U.S.'s spending has gone up is because of two multi-TRILLION dollar invasions. Subtract the $TRILLIONS squandered on the bogus "War on Terror" and U.S. spending has been steadily DECLINING too.

However revenues have fallen off a cliff - because those on the bottom have nothing left to tax, and our governments REFUSE to tax those on top. The fat cats haven't had tax rates this low since back when income taxation was first created.

The other reason why revenues are so low across the Western world are the 50+ million people NOT ALLOWED to work because of massive structural unemployment.

In real dollars, compensation for public sector workers has ALSO been falling - just not falling as FAST as for the private sector workers who THREW AWAY their unions.
apberusdisvet
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written by apberusdisvet, October 22, 2011
Jeff: you make many valid points. IMO that with regards to the unions, there should be a distinction made between private sector unions and public sector unions. Private sector unions serve a countervailing restraint on corporate greed and malfeasance in the workplace, but I see no justification for public sector unions which are in the process of bankrupting every state due to pension and benefit giveaways granted by corrupt officials in return for votes.

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