Government policies that attempt to control are easy to find. You need look no further than the liberal/progressive legislative priorities which, not coincidentally, are championed by President Obama.
In the beginning welfare was supposed to be a program to help low income folks out of poverty. What it became was a continuous spigot of funds to folks who made poverty a generational family tradition. When government produced policies encouraging people to get on, then stay on, welfare rather than graduate off welfare these problems were predictable. Benefits didn’t taper off as poor families increased their earnings, it was essentially all or nothing thus punishing recipients for adding a wage earner in the family by marriage or by improving their income through steady work. Government cash and services account for almost 4/5’s of poor people’s purchasing power according to economist Dr. Thomas Sowell. When the government controls a major portion of your revenue and expenses it can only be viewed as a control policy.
Note that current Democrats immediately weakened welfare reforms by hiding the issue deep in the Stimulus Bill. These reforms were enacted between the Republican congress and Bill Clinton in 1996. Under the reforms government assistance was temporary and recipients were assisted into work and off of welfare. And it was effective. People leaving welfare and working means they are not only moving up the economic ladder but they are also shrugging off government control and gaining independence. Democrats feared losing continuous control of welfare recipients and made it easier to keep poor people in poverty by keeping them on welfare. More folks on welfare means greater control and fewer folks on welfare mean less control.
Ask yourselves this, “If the government tried to keep certain groups poor and wanted to be subtle about it, how would it look different from welfare prior to 1996?”
See this site for an exhausting look at welfare and its affects on society. The page is extremely long but meticulously researched and documented.
RACIAL PREFERENCES / QUOTAS / AFFIRMATIVE ACTION
Even though Dr. King advocated for equal treatment liberals quickly turned the civil rights movement into a racial preferences movement. Under the umbrella of righting past grievances racial preferences, racial quotas, and affirmative action policies were implemented. The policies were touted as being necessary but temporary. Of course, as Mark Twain once said, nothing is as permanent as a temporary government program.
Blacks were allowed lower qualifying scores to get into college, graduate school, medical school, and law school. The result was that blacks admitted under affirmative action were much more likely to drop out than their peers. Blacks that were admitted to schools that their scores merited had a drop out ratio equal to their peers. This preferential treatment harmed a great many students who were accepted into schools and programs for which they were not academically prepared. Failure and frustration are the usual results when anyone is thrown into settings for which they are not prepared.
In the business world hiring blacks became less desirable since companies feared (rightfully so in many cases) that firing blacks would be difficult. Companies found it more difficult to eliminate poor performing blacks due to the expected charge of racism. Poor performing blacks were certain to be retained at much higher percentages than poor performing workers of other ethnicities. Many black workers took advantage of this situation and purposefully put forth little effort. This made companies less likely to hire other blacks and built resentment among productive workers of all colors.
I described an affirmative action scenario to a friend of mine who is female, caucasian, short, and ran road races. Suppose that short, white, female runners were not doing as well as other runners in 10K races. Road racing officials decided that to make up for this discrepancy all short, white, female runners only had to run 8K of 10K races. Now for the critical questions:
- With the lower standards would the short, white, female runners feel equal to or inferior to the other runners?
- Would they train to run 10K races or would they focus their training to only run 8K?
- Would other runners, especially short, white, female runners who were competitive at 10K races, ignore or resent the advantage given?
Critics defend affirmative action as necessary and insist the poor outcomes are just unintended consequences. However, unintended consequences is not the same thing as unanticipated consequences. If you follow the rewards and punishments of a policy and look at its affect on all groups the consequences can be foretold.
Government reward for failure. Propping up unsuccessful companies with taxpayer money. Using bailout money to take control of companies and heavily influence industries. Does anyone not see the control component here? That being said, there are two items worth commenting on here.
As discussed in the Economic Rewards page the financial institutions were lending as proscribed by the government and as rewarded by the government. One can argue that since the government led them into the mess they should bear a financial responsibility toward assisting them. This might be a pill that the taxpayer could swallow if the government would admit their culpability and rescind the laws that created the situation. Rather than hold your breath waiting for this to happen I suggest you give your business to those banks who resisted the push to pursue bad practices.
How did our cars become so non-competitive with foreign makers? Let’s look at the largest foreign makers for some clues. Honda and Toyota are the two largest foreign makers in the American market. If you’ve ever shopped prices for these two brands you would have noticed that most of their cars are more expensive than their American counterparts. Obviously Honda and Toyota were not gaining market share by offering a lineup of cheaper cars. The one item that separates these two foreign makers from American makers is long-term quality and reliability. Honda and Toyota hold up longer and better than US cars and American buyers have rewarded them for this.
Why aren’t American cars built with the same quality? Because the autoworker’s union refuses to allow the quality of the product to be a component of their pay structure. It’s hard to make a quality car with workers who have no vested and tangible interest in the quality of the car. US car makers were too weak to confront the union and are complicit in this failure as well. Now this failure is rewarded as companies receive bailouts and unions are given ownership stakes. Will this solve the problem? Not until failure has its natural consequences.
Those of you who read the Economic sections of this site will have an easier time understanding the issues at play here.
The American Recovery Reinvestment Act (ARRA) (a.k.a. the Stimulus Plan) passed by Congress and signed into law by the President (with only three total votes from Republicans) was sold to the American people as a necessary tool for fixing the economy. The package was $787 billion which will top $1 trillion total with interest payments. One source put it this way: if you spent $1 million a day since the time of Christ’s birth until today you would not equal the initial cost of this package ($1,000,000 x 2000 years x 365 days = $730 billion). Our 2008 Gross Domestic Product (GDP) was $14 trillion. In other words the Stimulus Bill borrowed from Chinese banks is an amount approximately equal to 5.6% of our GDP to help stimulate the economy.
Assuming that the creation of massive debt is not a problem in its own right, one might expect that money to make a significant impact in an economic recovery. When the money spent in the bill is analyzed one finds that the “rewards” are not going to those who create jobs and make the economy grow. The spending instead “rewards” those groups that helped get the Democrats elected. Groups like ACORN, and many George Soros funded groups are in line to receive billions. Unions of all stripes were thrown expensive bones. Money is spent on research that private companies do not think credible enough to fund. Only $50 billion of the bill is designated to our county’s infrastructure repair and expansion. That’s less than 6.5% of the bill. That $50 billion for roads, bridges, etc. is spread around the country on many relatively small projects and extends over several years. Not exactly a catalyst for job creation. Which is why we here at the Average Joe Think Tank call the bill “Porkenstein”.
As an economic recovery animal Porkenstein is missing all four legs. The money does not reward job creators. As a result unemployment continues to climb. As a control policy though – it is working as intended. Democratic allies are being rewarded with additional funds (or pork products if you prefer) to help erode our supervisory government’s mechanisms for blocking federal government control.