Let's say you have a diversified industry of small, medium and large sized firms. Let's say you then gut anti-trust enforcement, eviscerate regulation, and massively increase subsidization to create textbook oligopoly. And then, finally, let's say the few mega-conglomerates that dominate the oligopoly make big mistakes and dangerous decisions. What are you going to get? As I show in my new newspaper column, you're going to get exactly what you got not just in the Wall Street meltdown, but also in the swine-flu outbreak.
I call the mix of consolidation, deregulation and subsidization "piggish capitalism" - and if you're going to be honest about it, it's a bipartisan problem. Both parties in Congress and in the White House formed a consensus around that ideology in the 1980s and particularly in the 1990s, and now we're left with oligopolistic industries like finance and agribusiness whose ruthless efficiencies, vertical/horizontal integrations and lack of oversight have allowed them to turn relatively manageable problems into international emergencies.
Interestingly, as both conservatives and progressives struggle to claim the populist mantle in these times of crisis, they are each seeking to criticize a different leg of piggish capitalism's three-legged stool. The right attacks the concept of spending (ie. subsidization) and progressives attack the deregulation and consolidation. Though I (obviously) think we progressives are far more correct in our analysis of the root problems, I think conservatives (at least the honest ones) are onto something in their criticism of government subsidization of huge business.
As the Huffington Post's Tom Edsall reported, because the Obama administration is still playing into a conservative frame that demonizes public sector jobs, much of the new government spending is corporate welfare - ie. subsidization. It may be better targeted and less corrupt than Bush-style subsidization of Halliburton, et. al.*, but it's the same destructive economic principle: give a shit-ton of government money to the biggest of big corporations.
I want to be clear: Subsidization unto itself isn't always bad. Sometimes it's necessary, and it can be particularly positive when it is targeted at small businesses so as to not underwrite oligopolistic consolidation. The problem is that, as the American Small Business League's Lloyd Chapman shows, so much of our current subsidization is aimed at the mega-conglomerates - even the subsidization that claims to be targeted at small business.
The point here is that we're now suffering through two emergencies directly related to an three-pronged economic theory that we must confront head on - and change. The fact that the Wall Street crisis and the swine-flu outbreak are portrayed as two totally separate and random phenomena is positively absurd.
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* Though I have my doubts about that specifically in relation to the bank bailout...