Monday, February 22, 2010
The Paradox Of A 'Giving' Government
This article on forbes.com talks about the nature of our government and politicians being courted by private sector CEO's and the effect of government borrowing. Any favor done in Washington is expected to be returned in one way or another and it usually does get repaid. The author also talks about how other firms with weaker ties to Washington will face lower wages in the future. He also gives examples of Pfizer, GM, and other banks who received TARP payments. One part that stuck out the most is, "the re-orientation of precious capital away from the U.S. version of "crony capitalism" will almost without a doubt bring more economic pain than any near-term difficulties wrought by a weak economy would." Asian model meets American?
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According to Schouten, the lobbying industry is humming along in the nation’s capital, even for companies that have shed thousands of jobs in the past year. Yet, politicians have to implement taxes to recover the funds given away for the creation of jobs. And overall, the pursuit of profits is hampered by their core regulations and supposedly voluntary government initiatives. So for both companies, and taxpayers, it seems as though the aid given by politicians helps only in the short run. In the long run though, it seems like the funds given out will eventually catch up and hurt because of the regulations and the hampering of the profits for companies, and the increase in taxes and only temporary jobs created for taxpayers.
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