The Conservative Nanny State, by Dean Baker - economist
Review by Thom Hartmann
It would be difficult to exaggerate the importance of "The Conservative Nanny State" by Dean Baker, a macroeconomist with a PhD in economics from the University of Michigan and co-director of the Center for Economic and Policy Research in Washington, DC.
It's brilliant, encompassing some of the most important and relevant economic issues of our day.
It's easy to read - at 108 pages and written with a comfortable average-guy style.
It's shocking in that dozens of times - at least dozens - you'll slap your forehead and say out loud, "I never understood that!" or "I knew something like this was happening but never knew how they got away with it!!" or "Oh, my God, this is criminal what these rich cons are doing!!!."
The table of contents gives you a good sense of what's included in The Conservative Nanny State:
• Doctors and Dishwashers: How the Nanny State Creates Good Jobs for Those at the Top
• The Workers are Getting Uppity: Call In the Fed!
• The Secret of High CEO Pay and Other Mysteries of the Corporation
• Bill Gates' Welfare Mom: How Government Patent and Copyright Monopolies Enrich the Rich and Distort the Economy
• Mommy, Joey Owes Me Money: How Bankruptcy Laws Are Bailing Out the Rich
• The Rigged Legal Deck: Torts and Takings (The Nanny State Only Gives)
• Small Business Babies
• Taxes: It's Not Your Money
• Don't Make Big Business Compete Against Government Bureaucrats
In the preface, Baker points out how language has been used by conservatives to turn our semantic world upside down:
"The key flaw in the stance that most progressives have taken on economic issues is that they have accepted a framing whereby conservatives are assumed to support market outcomes, while progressives want to rely on the government. This framing leads progressives to futilely lash out against markets, rather than examining the factors that lead to undesirable market outcomes. The market is just a tool, and in fact a very useful one. It makes no more sense to lash out against markets than to lash out against the wheel.
"The reality is that conservatives have been quite actively using the power of the government to shape market outcomes in ways that redistribute income upward. However, conservatives have been clever enough to not own up to their role in this process, pretending all along that everything is just the natural working of the market. And, progressives have been foolish enough to go along with this view."
In the introduction, Baker adds:
"Political debates in the United States are routinely framed as a battle between conservatives who favor market outcomes, whatever they may be, against liberals who prefer government intervention to ensure that families have decent standards-of-living. This description of the two poles is inaccurate; both conservatives and liberals want government intervention. The difference between them is the goal of government intervention, and the fact that conservatives are smart enough to conceal their dependence on the government."
While liberals want government to make things more fair, enhance democracy, and protect the commons, Baker shows how conservatives want to government to reset the rules of the games of business to favor the hyper-rich, reduce the possibility of democratic participation by We The People, and steal the commons for themselves.
They cynically talk about "free markets" while working to make markets as unfree as possible. Examples include the limited liability corporation - a creation of government, not the market - and patent and copyright laws that have turned folks like Bill Gates and big drug company CEOs into what Baker refers to as "Welfare Moms." He lays out how conservatives have both historically and recently rigged bankruptcy laws to favor themselves and screw working people, and are working hard to eliminate any protections average folks may have left in either the markets or the courts against corporate malfeasance.
One of the most interesting points Baker makes is how the truly rich and the hyper-rich have co-opted the merely-upper-middle-class to promote the worldview that supports their lifestyle and transfers wealth from workers to owners. Thus the "influencers" in society - from TV and radio personalities to college professors to syndicated columnists - find themselves in a situation where if they want to stay at the top of the bottom, they have to side with those at the top of the top and promote a mythology that does far more for Paris Hilton than for Joe Sixpack.
"From 1980 to 2005 the economy grew by more than 120 percent. Productivity, the amount of goods and services produced in an average hour of work, rose by almost 70 percent. Yet the wage for a typical worker changed little over this period, after adjusting for inflation. Furthermore, workers had far less security at the end of this period than the beginning, as access to health insurance and pension coverage dwindled, and layoffs and downsizing became standard practices. In short, most workers saw few gains from a quarter century of economic growth.
"But the last 25 years have not been bad news for everyone. Workers with college degrees, and especially workers with advanced degrees like doctors, lawyers, and accountants, have fared quite well over this period. These workers have experienced large gains in wages and living standards since 1980. The wage for a worker at the cutoff for the top 5 percent of wage-earners rose by more than 40 percent between 1980 and 2001. Those at the cutoff for the top 1.0 percent saw their wages increase by almost 75 percent over this period.1 The average doctor in the country now earns more than $180,000 a year.2 A minimum wage earner has to put in 2 days of work to pay for an hour of his doctor's time. (After adding in the overhead fees for operating the doctor's office, the minimum wage earner would have to work even longer.)
"While doctors, lawyers, and accountants don't pull down the same money as corporate CEOs or the Bill Gates types, their success is hugely important in sustaining the conservative nanny state. If the only people doing well in the current economy were a tiny strata of super-rich corporate heads and high-tech entrepreneurs, there would be little political support for sustaining the system. Since the list of winners also includes the most educated segment of society, it creates a much more sustainable system. In addition to being a much broader segment of the population (5-10 percent as opposed to 0.5 percent), this group of highly educated workers includes the people who write news stories and editorial columns, teach college classes, and shape much of what passes for political debate in the country. The fact that these people benefit from the conservative nanny state vastly strengthens its hold."
Walking the reader, step-by-illustrated-step through the primary economic fallacies of our time, Baker concludes his book with this sterling call to action:
In addition to being essential for the effective design of government policy, reframing the debate is also crucial for the prospects for political success. The basic point is very simple: if progressives argue their positions using a script written by conservatives, then we lose. If we argue about “free trade'agreements, which have as one of their primary purposes increasing patent and copyright protection, then we start with a huge disadvantage. Even worse, progressives will sometimes talk about restricting drug patents (as in requiring compulsory licensing for essential medicines) as a form of interference with the free market. The hearts of the nanny state conservatives must be filled with joy when they hear their own rhetoric spouted passionately from the mouths of their political opponents.
"The nanny state conservatives have largely been running the political show in the United States over the last quarter century. This is due in part to the fact that the liberal/progressive opposition has been so incredibly confused in trying to lay out an alternative framework. At the moment, there is nothing on the table that passes the laugh test in either its policy coherence or political appeal.
"In order to have any hope at succeeding, we will have to move beyond the political framing of the nanny state conservatives. Many people have become comfortable with the framing “we like the government, they like the market,'but it is both wrong and politically ineffective. If liberals/progressives insist on adhering to this framework, then they guarantee themselves continuing failure in the national political debate. This framing would be fine if the point is to simply show up and be the perennial losers of national politics, but if the point is to actually change the world in a way that makes it better for the bulk of the population, then we must be prepared to move beyond the ideology of the conservative nanny state."
