Archive for December 6th, 2011
Democratic Underground nicely sums up where the “free market” approach works and doesn’t work. Here’s where it works:
The Republican belief in privatization is based largely or totally on their faith in “free market” ideology. That ideology says that everything or almost everything works better, is more efficient, and is fairer when it is driven by a free market than when it is “dictated” by government. The rationale for this ideology is that in their quest for profits corporations are simultaneously motivated to produce quality products, and everyone benefits as a result. In other words, the corporate quest for profits happens to be a good thing for everyone. Under some circumstances they are correct. For example, the entertainment industry is a good example of an activity where free market principles work well. The more entertaining the product produced by the industry, the more people will want to purchase it and the more money they will be willing to pay. The industry produces a quality product, they make a big profit, the people get what they pay for, and everyone is happy.
Here’s where it doesn’t work:
- Activities that are an intrinsic function of government
- Activities where pertinent third parties are totally unrepresented in the transaction
- Scarce resources which are essential to American citizens
- Situations where free market principles cannot operate because of lack of essential information
- Services which are required for the public’s welfare
The Guardian reports that it’s not all in the genes:
Around 40% of cancers in women and 45% of those in men could be prevented by a healthier lifestyle, including drinking less, smoking less and losing weight, according to the most comprehensive study of the risk factors to date.
In a detailed article at Huffpo, Janet Tavakoli argues that China has an economic problem too, that it is caused by fraud and mismanagement, and that China’s bubble will be popping. She also offers a way to determine when China’s bubble will be bursting:
If the rate of change of public officials fleeing the country, df/dt > x, where x is yet to be defined, or the acceleration in fleers, d2f/dt2 > y, where y has yet to be defined, or the rate of change of the average amount of loot dl/dt > z, where z is yet to be defined, then conditions of the Chanos Equilibrium have been violated and destabilization will occur.
Stated differently, when you see the absolute amount of embezzled wealth fleeing the country suddenly increase, or when you see a sudden increase in the absolute number of Chinese officials leaving the country on “holiday,” or when you see an acceleration in the number of officials leaving the country in a stealthier way, you’ll know China is sinking.