Friday, June 27, 2014

Rigging to win...

Straight-talking Elizabeth Warren says the economy is "rigged" against average Americans. Right or wrong, she's taking a forever politically-profitable position---she's playing the age-old envy card. You'd think the public would grow tired of being promised the goods supposedly concentrated in the hands of the few, only to come up time and again feeling put upon and rallying for the candidate who promises to steal away their pain. Or to at least exact some pain onto the unworthy rich.

Do big company bigwigs pay for political favor? Well, yeah! Now read that again: Do big company bigwigs pay for political favor? One more time: Do big company bigwigs pay for political favor? Think about it, think about it hard. Think about which party is the culprit (or the primary culprit) in this exchange.

My family and I live under the rules of a homeowners association. Our conspiracy-theorist neighbors believe that our board is lining the pockets of their crony contractors by paying more than market rates for the keeping of the grounds, the repairing of the clubhouse roof, etc. Yet not once have I heard or read anyone calling for the contractors' heads. Nope, it's the board they're after. And rightfully so. I mean, who'd blame the businessperson who happens to have an in with the president of our homeowners association for trying to get ahead? Apparently none of my fellow dues payers.

Do big company bigwigs pay for political favor? Do business owners exploit relationships to win contracts from boards? Again, who's primarily to blame, the private sector actors or the public servants?

Warren is after the bigwigs, when she should be after the recipients of the bribes---the legislators of the favors.

Case in point: In 2012, a senator from Massachusetts---a champion for the Affordable Care Act no less---lobbied for a repeal of a 2.3% tax on an industry slated to be one of the Act's chief beneficiaries, the medical device industry. This particular senator made the case that levying such a tax on certain Massachusetts employers would result in the loss of jobs, etc., in the state. A clearcut case of a politician catering to supporters---cronyism at its worst. Now that's the sort of politician---and the sort of rigging---Warren should be targeting. But wait, she's a politician too. Aren't all politicians that sort of politician? BUT WAIT!! she's THAT Massachusetts politician.

Here's a snippet from her April 2012 op-ed for, yes,
When Congress taxes the sale of a specific product through an excise tax, as the Affordable Care Act does with medical devices, it too often disproportionately impacts the small companies with the narrowest financial margins and the broadest innovative potential. It also pushes companies of all sizes to cut back on research and development for life-saving products. With an appropriate offset, we can repeal the medical device tax without cutting health care coverage for millions of people or forcing Americans to fight the whole health care battle all over again.

"An appropriate offset" simply means: fear not faithful supporters, we can pass this burden on to other industries in other states.

Dang! Reading that excerpt again, I can't help but acknowledge Warren's grasp of basic economics. Her obvious intentions notwithstanding, she's---in terms of the impact on employers---right. Allow me to restate the above and apply her irrefutable logic to raising the minimum wage. Something Warren, hypocritically, is a huge proponent of:
When Congress raises the cost of a specific input, as raising the minimum wage does to employers of low-skilled individuals, it disproportionately impacts the small companies with the narrowest financial margins.

That is an utter no-brainer. But, sadly, it's of no use to the envy-exploiting politician...

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