Where the free market fails

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:
  1. Activities that are an intrinsic function of government
  2. Activities where pertinent third parties are totally unrepresented in the transaction
  3. Monopolies
  4. Scarce resources which are essential to American citizens
  5. Situations where free market principles cannot operate because of lack of essential information
  6. Services which are required for the public’s welfare

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China’s debt woes

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.

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Four Major GOP Candidates Remain After Cain “Suspends” Campaign

Herman Cain has now “suspended” his campaign for the 2012 Republican nomination for President of the United States. Mr. Cain cited “continued distractions and continued hurt on me and my family.” Mr. Cain had been the target of claims of past sexual harassment and a long standing sexual affair with an Atlanta woman. With Mr. Cain’s withdrawal, there seem to be four remaining candidates atop the GOP Presidential field:  Mitt Romney, Mitt Romney, Newt Gingrich and Newt Gingrich. Former Republican Massachusetts Governor Mitt Romney in 2012 is running against himself from his race for Governor of the State of Massachusetts. Governor Romney has also lost credibility regarding his efforts as a “job creator.” Romney’s  prior private sector business, Bain Capital, and Goldman Sachs purchased two Florida medical diagnostics firms, closed them and 850 jobs were lost; Bain and Goldman made $250 million on the deal. Romney’s net worth went up to some $250 million during this time. Meanwhile, former Republican Speaker of the US House of Representatives Newt Gingrich is running against what he said as recently as a week before his last statement on some issues. Gingrich is no stranger to controversy as he was cited for ethics violations and fined $300,000 while serving as the Republican Speaker of the US House in January of 1997. Mr. Gingrich has also been criticized for extra-marital affairs and leaving two wives as they suffered from multiple sclerosis and cancer. One ex had to sue Gingrich for child support as she suffered and survived on charity as Gingrich served in the US House. Mr. Gingrich had carried on an affair with his now third wife even as his second wife was suffering from cancer.

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