Aloha Mauidog,
You commented: "So, now the political leaders you elected Democratically are in charge of the economy, rewarding those they judge are playing by their rules, and punishing those who do not. They are also planning what industries we need, and what we should be trading to obtain from other nations."
This sounds like what any responsible government should be doing.
You also commented: "In theory, you might be able to replace politicians who make bad economic decisions, but when they have the power to save or destroy entire industries, who is going to go against them? The labor unions, who supposedly represent the people, will back whichever candidate promises the most in raises and benefits. That is going to be the majority voting block."
Doesn't any government regardless of political ideology have that power or should have that power? Also, if you believe in a true democracy, labor unions using their numbers to influence elections is exactly what is suppose to happen.
You commented: "It's the same thing we see today. Trying to repackage the failed economic policies of Socialism by bundling it it with "New and Improved" Democratic rule is a sham."
Your analysis of the current situation is very accurate, but In your words then, what would be the ideal situation?
Kuleana
I disagree. In a capitalist economic system, the market dictates what industries thrive and what goods and services are best brought in from other nations.
The role of the government is not to pick and choose winners, but to create a level playing field, free of unfair business practices and monopolistic companies which prevent new companies form entering an industry market. the "Capital Cronyism" you hear about is anything but capitalism. It's quasi-Socialism, where the government sticks it's nose in the economy where it doesn't belong.
Did you know that during the first term of Obama, more money was made speculating on who would be bailed out than from actual growth of companies that weren't needing bailouts? That's just wrong on many levels.
There are certain things the government must do to ensure a stable infrastructure, such as regulate utilities, punish major polluters/environmentally destructive practices and evaluate/adjust market interest rates in times of economic distress. Other than that, the government should get out of the way and let the buyers, sellers and investors determine the prices, what products and services are to be offered, and what market risks and consequences they are willing to accept.
Take a look at Singapore. They adopted the free market model the US used to use, and they are thriving very well.
We've transitioned to a mostly services-oriented economy with very little manufacturing compared to the last century. Those jobs are now being done in Mexico, Singapore, Egypt, China, and many other countries.
How many union jobs in manufacturing do we have now in the US? Many have priced themselves out of the market. Their costs drive up the final costs of goods beyond what the market is able to bear. Meanwhile, it's cheaper to import those goods from locations with much cheaper labor.
In Hawaii, I hear of 3 unions constantly: Gov't Employees, Teachers, and Longshoremen. None of these unions are part of manufacturing. They are purely services related. I find it difficult to believe that these jobs require organization to get fair treatment. What I have seen first- and second-hand are new employees getting pink slips right after the Governor signed a new state employee's union contract. They got raises and more benefits, but at the cost of losing a percentage of jobs. The budget is just so big, and there isn't enough to do more for all employees long term.
The one area that's difficult to say whether government has a role or not is agriculture (aside from FDA). If we allow the market to dictate prices, large buyers can manipulate prices. Subsidies have proven to help keep crop prices from being driven too far down, but the problem is, once a subsidy is created, it never seems to go away. There are news anchors who bought peanut farms and were making money off all us tax payers because half a century ago, the subsidies were create to pay farmers to NOT GROW ANY peanuts. Keeping the supply low artificially kept the price up for the actual peanut farmers. That subsidy was on 60 minutes back in the 80s and still exists now.