President Obama’s Speech


Maybe I’m wrong in my interpretation of what President Obama said in his speech in Roanoke, VA. Maybe he really does believe that government, rather than private enterprise, provides the best life for most people. I’m inclined to see this controversy as part of a continuing argument as to whether competition or cooperation is better, with lots of buzzwords included. There were a lot of essays in this past Sunday’s Roanoke, VA Times addressing both sides (at least) of the issue.

One said that if the takers take everything from the givers, the golden goose will stop laying eggs. The author didn’t address just who the takers are, because that’s been established in the public mind: the government is the taker, and it passes along what it gets to welfare recipients. The author didn’t define just who the welfare recipients are either. They’ve been identified in the American mind as poor people who don’t want to work. But some have begun to come to different conclusions after seeing the Wall Street and other bailouts that began four years ago.

Another essay is enraged that the President didn’t give respect to business people who started or enlarged businesses. He said that government had nothing to do with the success of the businesses, but I don’t think that’s entirely true. Government has provided lands for businesses to use, as well as subsidies and tax loopholes to benefit businesses. And that’s not mentioning the infrastructure and services that benefit businesses as well as ordinary people.

I don’t disrespect businesses for the initiative and hard work that made them successful. What I don’t respect is the ethic of profit above anything else. Any business that provides a good product or service for a reasonable price, treats its employees well, and doesn’t leave toxic messes behind it has my complete respect. The problem is that many, but by no means all, seem to have no other ethic but profit.

Apple is a highly profitable company because they’ve made a lot of products people like. But we’ve been discovering that their factories in China keep their workers in dormitories, make them work 30-60 hour shifts (which makes little sense to me), leaving their workers unable to use their hands for the rest of their lives, poorly paid, and with high rates of suicide. Is all this true? I haven’t seen those conditions for myself, so I don’t know. Does it make sense as a business plan? In the short term, it probably does. In the long term, I doubt it. I don’t believe that kind of injustice pays in the long run, which may make me naive. And I don’t know how much Apple dictated the work conditions, but whether they were Apple’s idea or not, Apple is complicit, and from what I read, they haven’t been willing to change them. So Apple is a successful business, at least for now, but what is its ethic? How many people would want to work in those conditions?

That sort of exploitation hasn’t exactly been unusual in history. Take a look at the history of slavery and colonialism. Then take a look at the history of some of the businesses in this country. The coal industry, for example, which I wrote about in a previous post. I certainly didn’t say all there was to say there. The history of coal mining in the Appalachian mountains, for instance, is one of exploitation. Coal companies bought mineral rights from people who thought they could sell those rights without giving up their land. When they discovered they were wrong, they had few choices: they could work for the coal companies, leave the area entirely, or starve. Most took the first choice, living in company towns where they were paid with scrip that could only be redeemed in the company stores, and generally be perpetually in debt to those stores. The coal companies rarely enforced good safety standards in the mines, so many miners were killed in cave-ins or explosions, or got silicosis from breathing too much coal dust. Then some of the companies began mining by blowing the tops off mountains, contributed heavily to the presidential campaign of George W. Bush, and were rewarded by having environmental regulations changed, allowing them to dump toxic waste anywhere they wanted to, creating health hazards for the people living in those areas, and potentially for much of the rest of the eastern United States, by polluting the aquifers that provide drinking water to millions. Who exactly were the givers and takers in this scenario?

Do the bad deeds of business make government noble, and therefore the best hope for most people? Of course not. Governments are as fully capable of evil deeds as any other entity, as we’ve seen in the history of the past century or so. But evil deeds by governments don’t excuse those of businesses, or vice versa. Businesses are the engine of the economy, but if they only benefit the few, of what use are they? There are a lot of people in the world, most of whom are willing and able to work. If they’re unable to find work that enables them to survive and have a decent material life, whom does that benefit?

When I was beginning to work for a living there was still a lot of manufacturing in the United States, though it was beginning to go away. That meant there were a lot of entry-level jobs available for young people that didn’t require high levels of skill, and where people could decide to stay and make a career, or decide to move on to something that better suited their talents. That’s no longer true. There are few entry-level jobs available even for those with college degrees, and those degrees are generally necessary to get any kind of well-paying job. Government loans and land-grant colleges (as one essay in Sunday’s paper pointed out) have enabled a lot of people to get good educations and jobs. That’s an example of positive interventions by the government. So why were Republicans trying to get the interest on college loans doubled recently? So fewer people could go to school and acquire the skills to get good jobs? What sense does that make? One of the columns in the paper decries Obama’s speech as class warfare. I think the above example was class warfare: the warfare obviously doesn’t go only in one direction.

The column by the businessman also decried excessive regulation. No doubt there are foolish regulations, but there are also regulations that aren’t so foolish, and need to be enforced for the benefit of all the citizens. Not just environmental and safety regulations (would CEO’s want to work in conditions where they could be crippled, or there families to live in areas where gold has been mined by soaking the environment in cyanide?), but regulations to prevent banks from speculating with their customer’s money. There was such a regulation, the Glass-Steagall Bill, enacted during the Great Depression, but that was repealed during the late 1990’s. It didn’t take many years for the worst economic downturn since the Depression to happen. Without good laws, intelligently enforced, all kinds of things can happen that are not only bad for ordinary citizens, but eventually bad for business too. I recently saw a poster on Facebook that asked, Of all the crooks on Wall Street, why did only Bernie Madoff get convicted? Answer, Because he stole from the 1%. That seems to be only too true. When power becomes concentrated in too few hands, laws are made only for the benefit of the powerful. It’s happened in many places, and throughout history.

That’s why there has to be a balance between government and the private sector. Neither should be allowed to get too powerful, but neither should get too powerless either. Governments that aren’t powerful enough can be precursors to totalitarianism or other forms of tyranny just as governments that are too powerful can be. Governments and private businesses both have a responsibility to the communities where they exist. Those communities have contributed to the success of both, by providing assent to their existence in the first place, as well as workers, consumers and tax-payers to make them run. Competition isn’t a bad thing in itself (though as John Kenneth Galbraith pointed out, many industries have devoted much effort to eliminate it), any more than cooperation is. A balance is needed there too, and without these balances, the whole system will fail. It would be a tremendous tragedy to see the best things about America end that way.