Holiday feasts always remind me of that old Twilight Zone episode where aliens with sparkly robes, big eyes and knowing smiles show up with a book called “To Serve Man.” Everyone naturally assumes the book is a primer for saving us silly humans from our own ignorance and evil natures. This is during the Cold War, remember, when we all assumed we were going to blow each other to smithereens at any moment.
Naturally the best and the brightest humans line up for a trip to the home planet where further enlightenment undoubtedly awaits, and a select few will be chosen as mankind’s benevolent overlords: to serve their fellow man.
Unfortunately, though, “To Serve Man” turns out to be a cookbook and the best and brightest are on the menu instead of the guest list.
Maybe it’s just the Christmas sugar rush talking, but I think that’s where this country is headed as people and businesses line up for special treatment from an increasingly centralized, opaque and powerful federal government. At some point they’re going to find out that they’re dinners instead of diners.
Last weekend’s Cromnibus is a case study in how this happens. A huge unreadable bill covering everything from national defense to prairie chickens is ginned up behind closed doors and presented as a “must-pass” piece of legislation that no one will either read or debate before heading home for Christmas.
And who’s behind those closed doors? Only those who can afford their own D.C. lobbyist or, better yet, politician. The result, besides more spending, is a pact with the devil filled with restrictions, regulations, and costs that disproportionately fall on small businesses and families, and favoring inside interests and their benefactors.
Packing bills with favors has been going on for years, but it really reached an art form during the financial meltdown with Dodd/Frank. This “reform” resulted in taxpayers bailing out big banks to the tune of billions of dollars and includes massive increases in compliance, insurance and capital costs, along with giving politically favored large institutions a de facto “too big to fail” designation.
It’s a law that was written for big bankers by big bankers. They can absorb the increased compliance costs while small banks with much lower margins can’t. They can meet the capital and insurance requirements that stifle small banks’ ability to make local loans to farmers and homebuyers. And of course with an implicit government guarantee, big banks enjoy lower borrowing costs than small banks, giving them even more of a competitive advantage.
Big banks, like most big businesses, can absorb and pass along compliance costs and other regulatory burdens while smaller businesses, often operating on razor-thin margins as it is, cannot. That’s why box stores and big hospitals like Obamacare, why drug companies like the FDA, why big banks like Dodd/Frank. Expensive and byzantine regulations erect barriers to new companies entering the market and drive smaller players out completely.
But that’s not my point.
My point is that by centralizing and expanding government power we’re creating a courtier society, one where access to the King’s court is more vital to success than merit is. Continue reading