A radical call for a moderate view
Republicans believe that private business — free enterprise — will solve the nation’s problems, providing an ultra-small government backs off and doesn’t muck it up.
Republicans are wrong.
Democrats believe that private business has a corruptness about it, and a large government — a “we the people” working together — will solve most problems. Democrats are wrong. A perfect system doesn’t exist. A bestthat-we-can-do system is something inbetween — and it requires Democrats and Republicans to work together. Private businesses perform some functions best; government performs other functions best. The trick is finding that balance.
To Republicans: The classic version of capitalism is an empty storefront, an entrepreneur who identifies a product the market wants and, a short time later, a successful business operation. But this is like calling Disney’s Main Street USA an idyllic small town without looking behind doors that say, “Cast members only.”
In many companies where CEOs make 500 times as much money as rank-and-file employees, these leaders don’t have longterm goals for company survival — they have personal five-year goals to maximize stock options (they own gazillions) and get out. If the company dies in year six, it doesn’t matter — they got theirs.
Toward the end of the recession, thenFederal Reserve Chairman Alan Greenspan, a staunch advocate for capitalism, deregulation and business independence, admitted this as part of his mea culpa in 2008: “I made a mistake in presuming that the selfinterests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.”
Translation: Government regulations should have kept businesses in check.
To Democrats: Government programs have no incentive to make money, minimize expenses or do a complete reorganization as the world changes and archaic systems fail. While audits, oversight tools and the media can help, the federal government is a massive monster where individual employees benefit by growing their departments rather than running efficiently. As a result, billions of tax dollars easily fall between the cracks.
To both parties: Need another reason to balance private businesses’ freedoms and government functions? If we’d done so in 2005, we might have avoided the Great Recession.
In 1981, Fannie Mae issued its first mortgage-backed security. Don’t know what an MBS is? Don’t understand how they work? Of course not. Few people do. But money poured into this new investment vehicle; banks wallowed in gobs of mortgage cash and dropped their lending standards. Naive homeowners accepted too much money, and the housing market crashed — and along the way, government did nothing to stop it. Feds called the economy “frothy” when they should have said, “Run — run while you still can.”
A winner-take-all business versus big government fight benefits no one. Constantly striving to find the best balance does.