Edward Conard Speaks UP

 

Edward Conard, the author of Unintended Consequences, was on Sunday's Chris Hayes program, "Up." Conard defended one point that is undeniable: current levels of deficit spending are unsustainable in the long run. But he sounded as if "the long run" should last a couple of months. Conard's subsequent peremptory insistence that government spending must drop simultaneously with a small increase in marginal tax rates for the wealthy was simply benighted.

Hayes finally got Conard to say that the tax increases might happen BEFORE the budget cuts were brought forward, but Conard's line of reasoning throughout the discussion sounded wooden -- as if the economy (or his company or a sports league or anything else) was a deterministic iron structure with a limited set of outcomes based on an even more limited set of inputs.

Rubbish. The various elements in any policy will dynamically interact, sometimes in unforeseen ways, and Conard's twin assertions that (a) preserving the wealth of the investor class (he was a partner in Romney's firm, Bain Capital) is the primary engine of wealth and (b) increased taxation would gravely limit the capability of that class to make investments -- both were unbelievable on their face.

Conard's defense is a classic description of predatory capitalism: their fustian rises to a fever pitch in describing the risks that investors must accept, but they repeatedly overlook any description of the extremes to which they will go to rig "free markets." They remind me of David Ricardo theorizing about the "iron law of rents" but refusing to analyze how the "iron laws" are susceptible to maneuver and historical development. Conard and his fellow-travelers want markets free of regulation and free of oversight so the most powerful participants in the market can shape it to their will -- and then it stops being a free market for everyone.  The market divides into operators and  their prey.   The freebooters can then make the losers walk the plank and proceed to sail on to loot someone else's treasury. Without restraints, the freebooters can structure events to free themselves and shackle others: the logic of organized crime.

Conard once told Erin Burnett that campaign ads during the Republican primaries were critical of "all of business," but his formula for all of business -- "greater value at lower cost," (which can sound reasonable) -- did not mention the destructive logic by which Bain Capital lowered costs and gained its "greater value" -- from borrowing the wealth it then put into its own pocket, leaving everyone else with lesser value. That feature is certainly NOT shared by "all of business."