Starve the beast

Call them Conservatives. Self-reliant traditionalists, often hyphenated with Libertarians, to include those who adhere to the principle that the government that governs best is that which governs least. They support laissez-faire economics and wish only to "starve the beast," to use their language — the beast being the federal government — while outsourcing to private enterprise as much of the work of government as possible.

The Conservatives have had their turn. They are coming off an eight-year, free-market, marginally regulated binge and the results are not pretty. The metaphor "deep ditch" comes to mind. Suddenly the deregulators are caught in a trap of their own making and the hypocrisy is glaring. They've argued for years that government should stay out of the way and let markets and private enterprise hold sway. But now, these same laissez-faire privateers, their ships taking water, turn to the very beast they've so loathed and hat in hand ask for bailing buckets in the billions. The response of the taxpayers is overwhelmingly hostile and righteously so. But then, they too are caught between the economy's rock and hard place. When push comes to shove the "D" word is played: Depression. And black-and-white images come to mind of stark hobo camps, out-of-work Americans standing in soup lines and haunted men riding the rails while unemployment crushes families coast to coast.

Consider what insufficient government oversight has wrought. And let's begin with the Big Three automakers since they are center stage. For decades they have resisted government intrusion into their manufacturing, insisting they were making cars that the public wanted to drive. They lobbied against seat belts, airbags and raising of fuel economy standards. Ralph Nader and his ilk fought and litigated and pointed out consistently that Detroit's cars were unsafe at any speed.

Grudgingly, Detroit installed safety belts and airbags and has, incrementally, made our cars safer. The carmakers have, however, been more successful in holding down Corporate Average Fuel Economy standards, established by Congress in 1975 after the Arab Oil Embargo of 1973. Post-embargo, with supply stabilized, gas prices were low, hence the Big Three ignored gas mileage while building bigger and heavier cars (light trucks and SUVs, representing an enormous loophole, were exempt from the CAFE gas mileage minimums set by Congress, believed by many to be ridiculously low).

When the administration of Bush 43 took power, starve the beast and deregulate wherever possible was the philosophy du jour and was implemented with a vengeance. Hence the Republican-controlled Congress and the White House did little to press Detroit to look forward, take a signal from foreign car manufacturers and build lighter, more fuel efficient cars. And this laissez-faire attitude existed in spite of two events taking place: Global warming, after much denial, was now in play, the evidence incontrovertible, and the realization that worldwide oil reserves were being depleted at an alarming rate. For the automakers it continued to be business as usual.

Until now. And the arrival of a fierce recession.

The point here is that a balance should always be struck between heavy-handed oversight by government and unbridled free market practices which, when unleashed, can serve the interest of the companies and manufacturers but not of the welfare of the public. Case in point, the recent mortgage meltdown.

We ignore at our peril the truism that there are some things that government can do and do well. Raising CAFE standards is but one example. Another would be the need to have a beefy, well-funded U.S. Food and Drug Administration closely regulating the manufacturing of both domestic and foreign drugs. Like other regulating governmental agencies, the FDA has been starved over the last decade. This is no small thing. Soon China will produce about two-thirds of all aspirin in the world (and countless other generic drugs). But are they safe? Is there contamination in the factories? We don't know. Recently melamine, a toxic chemical, was illegally added to watered-down baby formula to increase the protein count and food quality tests. Some 53,000 babies in China were sickened and at least four babies died. Traces of melamine have shown up in chocolate in Great Britain and minute traces have been detected in the U.S. Contaminated dog food, toothpaste and fish have also been exported from China, a major player in globalization and a first choice destination for international drug companies' future outsourcing.

According to a recent New York Times Magazine article, "The Safety Gap," by Gardiner Harris, the FDA "regulates more than $1 trillion worth of consumer goods, which amounts to about 25 cents of every consumer dollar spent in this country. This includes $466 billion in food sales, $275 billion in drugs, $60 billion in cosmetics and $18 billion in vitamin supplements. It has fewer than 500 inspectors and computer systems so old that repairmen must be called out of retirement to fix them." The FDA once stood between the consumers and tainted tomatoes, chicken with salmonella, and children's toys covered in lead paint. In other words, starve the beast resulted in the safety net (comprehensive inspections) being at best frayed if not broken.

Our regulatory agencies have been truncated, some beyond recognition, and the results have been catastrophic. Witness predatory lenders and the raft of liar loans, the first domino in the now entrenched recession. Classical conservatism is one thing. A government run by ideologues is another. To restore balance, the incoming administration will, hopefully, trump ideology with common sense and a balanced economic policy.

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