Last week at the Reagan Presidential Library in California, the second Republican presidential debate of the 2016 election season featured most of the candidates attempting to channel their dead president, Ronald Reagan. As they slammed immigrants who have entered the US illegally and an actual diplomatic solution with Iran, they ignored that their hero signed a bill granting amnesty to undocumented immigrants and sold missiles to the same Iran that held 52 American diplomats hostage for 444 days.
Those two little facts aside, perhaps the biggest legacy of Mr. Reagan is his deriding of “Big Gubment” as he put it. Yes, the gross national debt increased significantly under Reagan, from $995 billion to $2.9 trillion, but he still remains the right’s anti-government hero. Listening to today’s Republicans, we have to remove the “shackles” of big government so that businesses can thrive. In theory, “the market” will regulate businesses.
Let’s take a look at the news to see how “the market” is regulating behavior of some members of “Big Bidness:”
- Volkswagen has been accused by the Environmental Protection Agency of implementing technology in nearly half a million VW and Audi diesel vehicles to cheat vehicle emissions tests.
- Exxon scientists have known about the impact of fossil fuels on climate change since the late 70’s, but buried the findings and denied climate change because, well, that’s the product they make their billions on.
- General Motors knew about faulty ignition switches that caused 124 deaths, but ignored it until they got caught, because… profits. They’ve agreed to pay a $900M settlement.
That’s just this week, folks. In my opinion, many private institutions have grown too big via years of merger and acquisition activity in all industries. Competition has lessened and that impacts pricing (higher) and wages (lower).
When candidates like Bernie Sanders says we need to “break up” the big banks, it give me pause because while the 2008 financial crisis almost took the global economy down due to high-risk profiteering gone awry, US banks still need to compete globally against huge banks in Europe, Asia, and elsewhere.
I don’t believe “socialism” is the answer in most markets, an exception being healthcare, but I think we need a more sustainable form of capitalism. We have limited resources, so the infinite growth of revenues and profits simply isn’t possible. We’re already hitting a resource wall with water in some geographies.
I don’t have an answer, but for now, maybe the human beings that make decisions like those by Volkswagen, Exxon and GM can make better ones and not knowingly kill people and potentially the whole planet.