American Elephants


The private sector: Useful for dumping on, attacking, punishing, and paying the bills. by The Elephant's Child
March 26, 2009, 7:11 pm
Filed under: Capitalism, Freedom, Socialism | Tags: , ,

I have to quote Daniel Henninger of the Wall Street Journal a bit here, because his column reflects (with a lot more insight) on what I’ve been writing about in the last couple of days:

With its vote in the House of Representatives to punish corporate bonus payments, the national Democratic Party has disconnected itself entirely from the private sector.

The public bear-baiting of AIG’s Ed Liddy, and then passage of the bonus bill, gave the nation a good look at the modern Democratic Party freed of constraints.

The current version of the party has largely broken free of any understanding whatsoever of the private sector — how it works or what it needs to function.

True socialists at least think about markets so they can criticize them.  The Democratic Party”s leadership doesn’t stir to even that level of engagement.  In the House, Senate and some corners of the Obama White House, the party is acting as if the marketplace was the world of an alien tribe, which it has to control through intimidation or demands for protective tribute (read:campaign contributions).

This is not true of the entire 90% of self-identified Democrats who voted for Barack Obama.  But Democrats who work in real jobs rather than work for the mothership in Washington must recognize that the party’s obsessions are becoming ever less hospitable to a functioning economy, or Mr. Geithner’s labors to that goal. (…)

Put it this way: Imagine any of this generation’s Democratic establishment taking a job at Procter & Gamble in Cincinnati as a middle-manager responsible for a division of employees and its annual profit and loss.  It is wholly inconceivable.  Or helping an owner of an auto-parts company manage through a real crisis.  They wouldn’t have  a clue.

That anti-bonus bill was not unique.  It is routine.

The attack on the retention bonuses of AIG executives was, of course, designed to distract attention from what was going on in Congress.  The sinners at AIG who caused the financial problems are long gone, and the recipients of retention bonuses, enticed to stick around and help out winding things down, encouraged by the “retention bonuses” not to leave.

So we had the Hate Week from 1984 fully applied and the executives received innumerable vicious death threats, and orders from Congress to return the money at once.  Andrew Cuomo threatened to release all of their names and addresses if the money was not returned instantly. Most have obediently returned the money, but one brave soul donated his bonus in its entirety to charity and quit, publicly, in a letter in the New York Times.

Interestingly the bonuses, though returned, are still taxable.

Daniel Henninger continues:

If the private sector is now largely an abstraction to Democrats in Congress, they will continue to make mistakes, explicit like the bonus bill or just thoughtless errors that constantly disrupt operations for private companies.

This will have a dampening effect on the U.S. growth rate and its ability to create jobs, especially for new, younger entrants.

Do read the whole thing.  It is important to understand these trends, and so hard to spot them.




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