The Free Market Problem

Paul Ryan and his supporters are trying to sell their spending cut and lower tax program and they’re getting booed at town hall meetings.  They’re finally cutting into people’s pockets who can’t defend themselves.  They thought they were doing what their constituency wanted and must be baffled at this negative response. Okay, this might get a bit complicated, but not really.  It just requires a shift in perspective away from the definition of capitalism we’ve been being sold since Reagan to something that is more descriptive of what actually happens.  Theory is all well and good and can be very useful in specific instances, but a one-size-fits-all approach to something as basic as resources is destined to fail. Oh, I’m sorry, let me back up a sec there—fail if your stated goal is to float all boats, to raise the general standard of living, to provide jobs and resources sufficient to sustain a viable community at a decent level.  If, on the other hand, your goal is to feed a machine that generates larger and larger bank accounts for fewer and fewer people at the expense of communities, then by all means keep doing what we’ve been doing. Here’s the basic problem.  People think that the free market and capitalism are one and the same thing.  They are not.  THEY ARE CLOSELY RELATED and both thrive in the presence of the other, but they are not the same thing. But before all that we have to understand one thing---there is no such thing as a Free Market.  None.  Someone always dominates it, controls it, and usually to the detriment of someone else. How is it a free market when one of the most salient features of it is the ability of a small group to determine who will be allowed to participate and at what level?  I’m not talking about the government here, I’m talking about big business, which as standard practice does all it can to eliminate competitors through any means it can get away with and that includes market manipulations that can devalue smaller companies and make them ripe for take-over or force them into bankruptcy.

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Ralph Nader’s letter to Barack Obama regarding Elizabeth Warren

Ralph Nader has written quite a challenging and apparently much-needed letter to Barack Obama, who has become comfortable serving the needs of big business while offering mostly pretty rhetoric to common folks. Here's an excerpt from the letter, which appears at Common Dreams:

[Y]ou promptly appointed Mr. Immelt to be the chairman of the President’s Council on Jobs and Competitive, while letting him keep his full time lucrative position as CEO of General Electric (The Corporate State Expands). At the announcement, you said that Mr. Immelt “understands what it takes for America to compete in the global economy.” Did you mean that he understands how to avoid all federal income taxes for his company’s $14.2 billion in profits last year, while corralling a $3.2 billion benefit? Or did you mean that he understands how to get a federal bailout for GE Capital and its reckless exposure to risky debt? Or could you have meant that GE knows how to block unionization of its far flung workers here and abroad? Perhaps Mr. Immelt can share with you GE’s historical experience with lucrative campaign contributions, price-fixing, pollution and those nuclear reactors that are giving people fits in Japan and worrying millions of Americans here living or working near similar reactors. Compare, if you will, the record of Elizabeth Warren and her acutely informed knowledge about delivering justice to those innocents harmed by injustice in the financial services industry. . .

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Elizabeth Warren’s attitude toward the free market

What is Elizabeth Warren's attitude toward the "free market"? It's not what it is often portrayed to be, as described by Madonna Gauding of Occasional Planet:

She does not envision new rules and regulations as the main focus of how the CFPB can best protect consumers. Her concern is that they are like “putting down fence posts on the prairie: They can be too easy to run around.” Rather than increased regulation, she wants to make markets for consumer financial products and services work in a fair, transparent, and competitive manner. “That means creating a level playing field where both parties to the transaction understand the terms of the deal, where the price and the risk of products are clear, and where direct comparisons can be made from one product to another.”

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Happy Ponzi Day!

Charles Ponzi was born 129 years ago today, so I guess that makes it Ponzi Day today. The man for whom the pyramid scheme was named though, was a chump. Today's schemers have been many times more successful. By the time Ponzi's scheme peaked in 1920, Wikipedia notes that "he had made $420,000 ($4.59 million in 2008 terms)." See what I mean? $4 and half million isn't even enough for today's ponzi artists to get out of bed. For example, let's look at the currently best-known ponzi artist, Bernie Madoff. The amount missing from Madoff clients' accounts was nearly $65 billion, although that includes fabricated money-- actual losses total about $18 billion. Even at $18 billion though, that's still almost 4,000 times the ponzi scheme than Ponzi himself. Madoff made headlines again this week, saying that “It’s unbelievable, Goldman … no one has any criminal convictions. The whole new regulatory reform is a joke. The whole government is a Ponzi scheme.” And who better to know Ponzi schemes than the man who bested Ponzi?

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We Are Not Parts

I’ll admit up front that I’m shooting from the hip here. There are many aspects to what is happening in Wisconsin right now with parallels to several past instances in the country in the fight over workers’ rights, unions, and moneyed interests, but I frankly don’t have the time to research them all right now and get something up before it all comes to a head. Isn’t it interesting, though, that we are collectively cheering what is happening in the Middle East right now and something similar is happening right here and people don’t seem to be paying attention to what’s at stake? I grant you, it’s a stretch. But on principles, not so much. We’re talking about who has the right to speak to power and over what. The protesters in Madison aren’t having their internet access and phone service pulled and it’s doubtful the military will be called in, but on the other hand the Wisconsin state police are being asked to go get the now-labeled Wisconsin 14 and bring them back to the state capitol to vote on something that is clearly a stripping of the right of petition and assembly. So this can become very quickly a constitutional issue and that’s scary, because right now the Supreme Court has been decidedly against workers’ rights. Governor Scott is at least being clear. I’ll give him credit, he’s not ducking questions about what he’s trying to do. Wisconsin, like many states, has a budget crisis. He’s already gotten concessions from the unions, a lot of money. The unions have not balked at doing their civic duty in terms of agreeing to pay cuts, freezes on raises, and some concessions on benefits to help the state meet its budgetary responsibilities. But he’s going further and asking that all these unions be stripped of their collective bargaining abilities in order to make sure they never again demand something from the state that the legislature or the governor believes they don’t deserve. In other words, Governor Scott doesn’t ever want to have to sit down and ask them for concessions ever again—he wants to be able to just take what he wants. [More . . . ]

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