The Capitalism of Government by Ideology

by jhwygil

Call it crisis profiteering, call it disaster capitalism – but airlines companies are doing what private corporations do: They maximize profits.

I’ve long made the argument many times in many scenarios that raising taxes or fees does not mean that those costs will be passed on to consumers.

I’ve said that in regards to housing costs, especially. Propose to raise building fees and every realtor and contractor in the city is down in city hall saying that if fees are increase, affordable housing will be no more. Propose to adopt the International Building Code in the legislature and there’s a whole bucket-load of legislators willing to decry the move as something that will make housing unaffordable.

I don’t know that I’ve ever heard any elected official dispute this unfounded complaint. They’ll regurgitate that just like cattle and their cud – some reiterating the claim, others accepting it while lamenting that it (the raise in fees, the new regulation) has to be done.

Say it often enough, and it’s true. Right?

Well, here’s an example of the the basic fact of capitalism: The cost of the product is what the market will bear.

Witness this past week – the GOP-controlled U.S. House of Representatives has refused to extend operating authority for the FAA. What that means is that 4,000 FAA employees have been furloughed without pay. Traffic controllers are, of course, still on the job.

For now. And just to point out the politics of this situation – is there any doubt that we will have an FAA? Air traffic controllers?

In addition to those 4,000 FAA employees that have been laid off, more than 90,000 airport construction and expansion projects have been shut-down. These are projects in process. These aren’t federal jobs, per se – but they are 90,000 construction jobs that then impact the construction supply industry and then the local grocery store and the gas stations and the mall*marts and on and on.

ALSO part of the FAA shut-down is their inability to collect the taxes that are placed on train and plane tickets.

So what did the airline industry do? They raised their ticket prices equal to the taxes on the tickets.

Capitalism is a lovely thing, isn’t it? The market supported that price for a ticket – it had no connection to actual cost of the product. Eliminate a tax and the price stayed the same. In fact, I bet each CEO called each other up and they all agreed it made sense.

And taxes are pretty significant on a plane ticket. An average of $61 per.

Somewhere the RICO Act weeps.

This poor website’s story was relevant for about 2 seconds.

MOST corporations operating in the U.S. pay no taxes.

The U.S. bailed out banks that not only made record profits – they paid little to no taxes. Take Bank of America, for example – BOA received a $1.9 billion refund.

So here we are in a budget debacle. The GOP and Rep. John Ineffective Boehner refuse to eliminate corporate tax breaks while their lobbyists lobby on their corporate employer’s behalf to ensure that is exactly what occurs – and corporations fly in the face of the whole so-called deficit disaster up there in Washington and raise the price of the airline tickets equal to the taxes that would have been collected.

It’s a “screw” to America, people. Hear them laughing?

Let’s not forget that the GOP is never without it’s ideology: Know why the House GOP is holding up extending FAA operational authority – something that has been done 20 times since 2007? Republicans want to toll back a new union elections rule that was adopted by the National Mediation Board last year.

Ideology first. Talking points second. Policy non-existent. Thank you Tea Party, I expect nothing less.

  1. jack ruby

    This is very true. If suppliers were able to always blindly pass on all additional tax burdens or costs to consumers…they would have already raised the price to that level long ago and just pocketed the difference. Especially if there is no meaningful competition in the market. Is Dave Budge going to come in and now give a lecture on the conservative view of price elasticity of demand and the laffer curve? We should all just wait to be tricked on.

    • No I’m not. But one would wonder why anyone would discount any meaningful discussion of price elasticity. One may also wonder if viewing price movements over a few weeks is a meaningful analysis.

  2. jack ruby

    ‘trickled’ on

  3. Ingemar Johansson

    Airlines…..who rides airlines?

    They’re for the little people.

  4. the idea that america is the home of the free market place is only valid if you take away the corporate subsidies.

    corporate corruption of our formerly representative government has resulted in taxpayer supported enterprise subsidization which is then granted immunity from laws against monopoly and then you lose the important component of a free market- the willing buyer. we are no longer willing buyers under the corporate state. we are captive buyers/taxpayers forced to invest in this unholy collusion between corporations sanctioned by the state.

    oil, gas, health care, even food and water is now under the control of collusionary enterprise working hand in hand with elected officials to make us pay whatever they want us to pay.
    airlines are no longer regulated for people. they are regulated for the good of the enterprise.

    anyone who argues that there is significant free market in anything in this country or even the world is naive or trying to hide the fact that world-wide collusion is now the rule rather than the exception in the marketplace of necessities.

    • Besides a few minor quibbles, that’s about right. Funny, I wouldn’t have figured you agree with Ayn Rand on anything.

      • i don’t. i consider ayn rand a russian born crank who was a victim of inbreeding and a very poor writer. i agree with the founders of this country. who believed in the yankee marketplace between a willing buyer and a willing seller. and who also believed in taxation to take care of the necessities that provide for the common good.

        ayn rand was a corporate predationist.
        i am a proponent of a free market which sanctions government to regulate cheaters, thieves and collusionary practices.

        expecting them to regulate themselves is childishly naive. the corporate state supported predationary market we have now is far from free.

        • Having read that I’m sure that you protest too much. Might you admit that Rand could be right like a broken clock on some issues? I don’t agree with much of what Marx said, but he said many things that are correct. (but I also think you don’t understand Rand if you call her a “corporate predationist.” – and BTW, I’m not a Randian if you think this is a real defense of her in this context.)

          But, just so you know, I figured putting you and Rand in the same thought would make you break out in an itch. Seems to have worked,

  5. deregulation has allowed the market to turn willing buyers into captive consumers. I have no problem with individual enterprises competing for buyers. But dereg has allowed them to pack up. This market is now corporate predationist.

    The only freedom in this market belongs to the predators.

  6. and here comes the #boehner crash……

    the #bushcrash wasn’t enough suffering for the country so the GOP.are about to cause a double dip recession into a full blown depression by scaring away skittery investors in the #Boehner crash.

    • If there is a relief rally when a deal is done are you going to call it the #Boehner rally? My bet is that we’re going to get a downgrade no matter what happens. But the soft market today may have had something to do with a 2%+ drop in durable goods orders. Bond rates barely moved. Dollar was up against the Euro.

      Be careful what you predict.

      • what deal are you referring to?

        anything less than a long term full-blown serious debt reduction package will result in more short term upheaval. and everyone knows that smart money doesn’t like turmoil mr budge.

      • Let me give you a hint about the markets: Everybody knows very little and the people that make the most in the market make it on turmoil. How do you suppose George Soros made his billions? The “smart money” (if there is such a thing) doesn’t care if the market goes up or down. They only care what side of the trade they’re on.

        But I’ll bet you $100 right here and now that when the debt ceiling is raised there will be a up market on that day. Too much? Name the terms.

        • boehner is willing to gamble this nation’s good credit standing. you want to gamble with me. this isn’t a game mr budge. you are talking about politicians willing to sabatoge this country’s future for political gain.

          seems like some people have a serious enough problem with gambling on the right as it is without feeding into the vice.

        • Lighten up a thousand ferchrissakes. What you lack in curiosity you also lack in humor. Life will be OK. We’ll get through this. But the time to worry about this is way fucking past due. Liberals and progressives had the chance to raise taxes and they failed. Now they want to blame conservatives for what? Being conservative? Give me a break.

          I’m not the one who has ever placed my hope on government doing the right thing. Those of you that do are naive at best and, as evidence of where were are, perhaps delusional.

          • it is not very ok right now for the people i know mr budge.
            and the insulated view of things by politicians and their corporate cheerleaders is certainly not reassuring anyone. most people can’t take much more of this recession and the insouciant attitude that everything is going to be ok is a very good example of why we got here. apathy.

          • Don’t lay that on me. I’ve been saying for years that we needed to get this under control. I don’t know what your idea of complacency is but t I’ve been worrying about it for years. Where were you and your ilk calling for a raise in the debt ceiling last year when Dems had control of both Houses and the White House? You’re late to the game and now you’re pointing fingers at only one side of the political spectrum?

            And don’t try to tie me into supporting corporatism. My record speaks for itself.

            • now who is itchy?

              i point fingers at both parties mr budge. you can ask anyone.

              i blame the democrats for their cowardice and i blame the republicans for treasonous predation.

              i have been calling for something sensible in the middle for a long time. maybe when these idiots get through making a mess of things we can finally look toward a third party to clean it all up in 2014.

              by the way. i do fully appreciate that you do care mr budge. we all do. it is why we are here. we see things differently but we care or we wouldn’t try.

              the apathy is with the 90% who see no point in even learning about the issues.

              • of course, through it all i am self aware enough to realize that most of us who care enough to rant about things online are only hunting cougar with squirt guns anyway.

    • I have to agree with Problembear (though I don’t limit the blame to Boner). The corporate world has succured for itself a lasting golden paracute so they could care less if the majority of Americans are hammered back to the stone age. In fact, it will reduce their labor costs because they can pay them the same thing the stone age chinese were getting paid before they became “enlightened”. Worse, those people working with thank their corporate masters for the job – even if it pays pennies. They certainly got their money’s worth when they bought the American Political System.

      I also agree with Budge. At this point, a downgrade is not only likely, it is probably enevitable. There isn’t time to pass a significant debt reduction/debt ceiling bill. If a debt ceiling bill gets passed at this point, It will be a “clean bill” – meaning that it will only address the debt ceiling (and I think at this point, that is a HUGE if). Any debt reduction bill will have to be vetted by the CBO and there just isn’t time. Boner’s bill is a fail in the Senate (assuming it can even pass the insanity of hte House) and Reid’s bill is a fail in the House. No one is compromising and no one is budging on their “principles”. In short, they are going to let the US economy fall off a cliff.

      Assuming that they do pass some kind of lame debt ceiling bill (without debt reduction or a stop gap bill like McConnell’s), we will still get downgraded for failing to address the significant debt problem we have.

      To say I am frustrated is an understatement. We will be looking at an inflation fueled double dip recession if not a complete depression. My wife and I are as prepared as we can be but this will get a lot uglier before it gets better.

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