The "Conservative" Nanny State?

In his recently-published book entitled The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer (available free online), Economist Dean Baker from the Center for Economic and Policy Research excoriates the Corporate Right for phony support for free markets. Although Baker is thoroughly statist, he makes a lot of good points. For one, he points out how the Corporate Right loves cheap immigrant labor, but vigorously opposes the immigration of tens of thousands of well-qualified foreign professionals, like the thousands of well-qualified Indian and Eastern European physicians. He also points out the sham of intellectual monopoly grants; he asserts that Microsoft gains more from their intellectual property monopoly grants every year ($40 billion) than the US government spends on the Temporary Assistance for Needy Families (TANF) welfare program doles out every year ($18 Billion); He also does a good job of exploding the myth of “big business”-“big government” animosity

An argument he made that I had never heard before was in regards to corporate taxation. Baker made the argument that corporate taxes are completely voluntary, since people don't have to incorporate. Furthermore, he states that corporate taxes must be cheaper than the alternative or individuals wouldn't incorporate in the first place. Baker concludes that the corporate tax is a fee paid by individuals for the privileges of limited liability and tax-deductible merger and acquisition (M&A) debt, among other things.

One of the sections that Baker really misses the boat, however, is his examination of the Federal Reserve. Baker regurgitates the old leftist claim that the Fed is designed to "throw workers out on the street" when they get too "uppity" by raising interest rates. While that may happen, he completely avoids examining how the Fed really transfers wealth from the middle class and poor to the rich -- through monetary inflation, investors and bankers further up the monetary food chain gain enormous profits while the rest of the country gets saddled with price inflation and increasingly-unaffordable property prices; the middle and upper-middle classes eventually catch on to the game an invest in the bubble, but they are the ones who are left holding the bag when it goes bust.

Presidential hopeful Rep. Ron Paul (R-TX) has recently made this argument, and I think it could resonate with the majority of Americans.

Bottom line: Baker’s book is a misnomer; true conservatism is the defense of free markets, tradition, non-interventionism, and the natural order. True conservatism is best exemplified in Presidential Candidate Ron Paul, Barry Goldwater, Robert Taft, Howard Buffett, and many others. Labeling corporate shills for moneyed interests as “conservatives” does the entire Right a disservice.