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The Myth of a Free Market
seeker
I came across this wonderful article today and thought some might find it interesting.
"Those who cannot remember the past are condemned to repeat it." - George Santayana
 
catman
seeker: You're right. It is quite good, although most of it came as no surprise to me. Wherever there is money to be made, an ideological reason can be found for making it.
"If I owned both Hell and Texas, I'd live in Hell and rent out Texas." - General Sheridan
 
seeker
I found especially relevant with the current goings on in our economy these days. Right now certain politicians are using these myths as propaganda to try to fundamentally change the way our country operates
"Those who cannot remember the past are condemned to repeat it." - George Santayana
 
catman
I agree, although it's been going on for some time. But with the economy as shaky as it is, such arguments are more dangerous, since frightened people are less likely to think things over.
Edited by catman on 02/01/2011 16:43
"If I owned both Hell and Texas, I'd live in Hell and rent out Texas." - General Sheridan
 
seeker
Very true catman. I tend to think we'll actually have to experience a complete economic failure before people get wise to just how dangerous these Free Market nuts really are.
"Those who cannot remember the past are condemned to repeat it." - George Santayana
 
Kowboy
Pfffft. Chang was the author of "Kicking Away the Ladder" which was required reading by my admitted communist political science professor last semester.

I've had enough Chang for a lifetime.

We've seen how well capitalism works and we've seen how well communism and other not-capitalist systems work. Good thing we've got all these rich people, someone's got to pay the taxes:

http://theblogpro...-care.html
Edited by Kowboy on 02/03/2011 23:09
 
seeker
I have to laugh when I see stuff like that kowboy.

First off the article you referred to completely ignores the staggering difference between what the top one percent in this country make and what the bottom 47% make.

Think about it, your own article points out that the top one percent in this country earn nearly a quarter (around 23.5% depending on the study you are looking at) of all the earned income. The bottom 40% only earn about 12% of the income and in fact the bottom 50% of US citizens don't earn cumulatively what the top 1% makes.

Let's put that in perspective though. Here is a breakdown of incomes in 2006 (The gap has increased since then). Note that the income for the person is the bottom 50 percentile is under $31,987 while the actual income that qualifies you to be in the top one percent is $1,320,560. In fact the average income in 2006 for a person in the bottom 50% is only $14,971, just over $4000 above the poverty line for a single individual.

That's the real problem with your thinking kowboy. That guy in the top one percent is not only benefiting the most from our economic system but then he is turning around and exploiting the bottom 50% (who do you think makes it possible for the top one percent to make their money) and he cries because he only has eight or nine hundred thousand a year to live on. Meanwhile most of the rest of the country is barely getting by at all.

The true comedy here is that while Republican's whine about 'redistribution of wealth' their policies are designed to do just that, only with the wealthy getting it all
Edited by seeker on 02/04/2011 17:04
"Those who cannot remember the past are condemned to repeat it." - George Santayana
 
Kowboy
seeker wrote:
I have to laugh when I see stuff like that kowboy.

First off the article you referred to completely ignores the staggering difference between what the top one percent in this country make and what the bottom 47% make.

Think about it, your own article points out that the top one percent in this country earn nearly a quarter (around 23.5% depending on the study you are looking at) of all the earned income. The bottom 40% only earn about 12% of the income and in fact the bottom 50% of US citizens don't earn cumulatively what the top 1% makes.

Let's put that in perspective though. Here is a breakdown of incomes in 2006 (The gap has increased since then). Note that the income for the person is the bottom 50 percentile is under $31,987 while the actual income that qualifies you to be in the top one percent is $1,320,560. In fact the average income in 2006 for a person in the bottom 50% is only $14,971, just over $4000 above the poverty line for a single individual.

That's the real problem with your thinking kowboy. That guy in the top one percent is not only benefiting the most from our economic system but then he is turning around and exploiting the bottom 50% (who do you think makes it possible for the top one percent to make their money) and he cries because he only has eight or nine hundred thousand a year to live on. Meanwhile most of the rest of the country is barely getting by at all.

The true comedy here is that while Republican's whine about 'redistribution of wealth' their policies are designed to do just that, only with the wealthy getting it all



seeker:

This is typical of the kind of liberal pap that you spout. At least you used the right term, "what the top 1% earned" Yeah, that's right, they earned it. They didn't have it handed it to them by someone else. They worked hard and long or more efficiently and earned their money. It is so amazing to me that in your world the rewards of hard work and innovation are held in such scorn.

No, the rich don't get richer by eating the pies of others, they get richer by making more pies for all. It's not a zero-sum game but I know that's hard for all you class-envy types to get your head around.
 
Bob of QF
Kowboy wrote:

This is typical of the kind of liberal pap that you spout. At least you used the right term, "what the top 1% earned" Yeah, that's right, they earned it. They didn't have it handed it to them by someone else. They worked hard and long or more efficiently and earned their money. It is so amazing to me that in your world the rewards of hard work and innovation are held in such scorn.

No, the rich don't get richer by eating the pies of others, they get richer by making more pies for all. It's not a zero-sum game but I know that's hard for all you class-envy types to get your head around.


Actually?

The majority of the super-rich, with very few exceptions, inherited that wealth by the simple accident of being born of rich parents.

Hard work? Hardly. Paris Hilton is allegeric to hard work.... and she is typical of the caste.

Even Bill Gates had a wealthy father giving him a healthy financial kick in the seat-- had Gates been born poor, he would have died poor.

As soon as you eliminate all inheritance? Your argument might have some merit...
Quantum Junction: Use both lanes

Reality is that which is left, after you stop believing.
 
seeker
Kowboy wrote:

seeker:

This is typical of the kind of liberal pap that you spout. At least you used the right term, "what the top 1% earned" Yeah, that's right, they earned it. They didn't have it handed it to them by someone else. They worked hard and long or more efficiently and earned their money. It is so amazing to me that in your world the rewards of hard work and innovation are held in such scorn.

No, the rich don't get richer by eating the pies of others, they get richer by making more pies for all. It's not a zero-sum game but I know that's hard for all you class-envy types to get your head around.


Actually, as Bob pointed out, many of them DID have it handed to them. I merely used the term earned in the generic sense.

The fact is that much of the recent 'innovation' has consisted of finding ways to take advantage of the public to the detriment of society. Mortgage lending companies selling interest only loans, pharmaceutical companies manipulating testing results so they could rush to market unsafe drugs etc are the real world examples of the kinds of things that happen when you deregulate.

Where you really lose the debate though is the simple fact that the US has been following the egregiously stupid economic policies you espouse for the last forty years and it has resulted in the same economic problems that resulted in every other country dumb enough to have fallen for Friedmanism. Make any argument that you like but the facts are that the best economic times in this country occurred during that thirty period after WWII when taxes were high.

The pretense that your economic position is viable fails when you consider that it has been being tried in this country for forty years now and done nothing but result in steady decline.
"Those who cannot remember the past are condemned to repeat it." - George Santayana
 
seeker
One of the things I find truly amazing about the current love Republicans have for their Friedmanistic idiocy is that these policies have a track record that clearly shows they do not work. Rather than some abstract set of theories that have never been tried we can see precisely what Friedmanism has resulted in versus the Keynesian approach that lead to the success of our economy in the 40's, 50's and 60's.

Here is a discussion of the track record of Friedmanism and its effects where it has been tried. Read carefully, especially this bit which sounds eerily familiar to anyone paying attention to the US economy:

Gradually eliminating their political competition within the military and civilian bureacracy, the Chicago Boys had, by 1975, accumulated enough political capital to implement their program pretty much as they pleased. They began a series of far-reaching reforms - which they called "shock treatment" - which included devaluing and floating the currency, steeply increasing interest rates and slashing tariffs to counteract the inflation that the devaluation would have caused, while greatly reducing public expenditures. They abolished all taxes on wealth and business profits, and began slashing government workforces, including selling off any and all state-owned enterprises.

Social reforms included school choice, labor law reform, social welfare reform, and many other similar proposals that would be instantly familiar to current American conservatives as part of their own agenda. The effects, however, were exactly what American social liberals had predicted - a generalized increase in poverty, disease, homelessness, and a general spread of squalor, unrest and disaffection - all effects that were of no concern whatever to the Chicago Boys.

The land reforms carried out by the two previous administrations, including Allende's, were also reversed. But the reversals were not to restore the land to its previous owners, but rather to consolidate ownership of it for the use of export-oriented corporations. The slogan was "the three 'F's,' fruit, forest products and fish." Never mind that those whose land had been expropriated were not compensated or offered other means of employment. They were left to fend for themselves, swelling the ranks of the already previously disposessed, former members of the working class who had worked, often for years, in the newly-abandoned factories, and were left with nothing.

The Chicago Boys began privatizing anything and everything in sight - 212 state-owned enterprises in all, including utilities - resulting in steep rises in utility costs, transportation costs and health care costs for ordinary Chileans. The banks were an especially interesting case. The Chicago Boys convinced Pinochet that freeing the banks from government regulation would attract foreign investment, and competition would enforce fiscal discipline and honest accounting. So in a case of deregulation gone berserk, the general sold off all six state-owned banks to the first comers. They quickly fell into the hands of two speculators, Javier Vial and Manuel Cruzsat. These two then promptly used the banks as collateral on loans obtained from foreign sources to buy up local industrial enterprises. Disliquifying these enterprises generated more cash, which Vial and Cruzsat then used for even more leveraged buyouts, and as the end approached, these go-getters got themselves gone. It was a classic Ponzi scheme. Soon, Chileans faced the problem of having no trustworth banks at all through which they could conduct banking transactions.

Freed from the heavy hand of bureacracy, business regulation, taxes and public-owned enterprise, the economy took off - right off a cliff and into a severe recession. The slowdown had the predictable effect on Chile's industrial sector, resulting in massive layoffs and reduced economic activity. Suddenly, Chile's large and prosperous middle class found itself facing huge unemployment increases, rapidly falling salaries and rapidly increasing living costs.

The economic performance of the Chilean economy after the application of the "shock treatments" was anything but impressive. While there were three short bursts of impressive economic growth (which were impressive mostly because they were really just periods of recovery), they were interspersed with the classic steep, sharp, much lengthier contractions, which simply added to the growing misery of the poor and the former middle class. The later recessions, the last of which synchronized with world-wide recessions, were exacerbated by the liberalization of trade policies, making it more difficult for local industries to compete, either locally or internationally. Add to that the banking collapse caused by the privatization of the banking system, created widespread problems with credit, especially for the poor, and the stage was set for economic failure. Blood and glass began to litter factory floors throughout the country. Real economic output declined by a full 19% in 1982 and 1983 alone.


There is a bit of irony though, as this article points out, the one contribution that Friedman made that did work was his creation of the withholding tax.
Edited by seeker on 02/05/2011 13:22
"Those who cannot remember the past are condemned to repeat it." - George Santayana
 
JohnH
My sister in law once remarked to my brother how did your father end up worth more money than my father. I did not use quotes because I was not there in person. My father was a foreman mechanic and my brother's father in law was a surgeon.

It is that a way to deal with human life. That weird happenstance can determine the wealth and joy of a person.

I am comfortable that at least for two generations most of the offspring I would care about will be fine.

How many families in the Americas can say that, what about the world.

We must discuss economic issues with an understanding that there are attributes to free enterprise and to communal economics.

I speak from a place of privilege.

edited because I cannot spell for shit.
Edited by JohnH on 02/08/2011 02:37
 
seeker
Great observation John. If history has proven anything it is that the best system is really a balance somewhere between the two extremes. The big problem that is going on right now is that the free market types have distorted our system of regulation to the point where we no longer have a way to safeguard people when poor decisions are made.

The recent huge economic disasters caused by various corporations are precisely the result of too much deregulation. This country is bleeding jobs because we removed corporate incentives to hire US workers. To top it all off the concentration of wealth means less money circulates in the economy.
"Those who cannot remember the past are condemned to repeat it." - George Santayana
 
JohnH
Kowboy, you accept the capitalist explanation of how the world should work.

I would ask you to look at your place in the existent economic situation. What is it based on, family money, hard work, weird luck. Mine and my offspring is based on weird luck. Is this the way the world should work.
 
Kowboy
JohnH wrote:
Kowboy, you accept the capitalist explanation of how the world should work.

I would ask you to look at your place in the existent economic situation. What is it based on, family money, hard work, weird luck. Mine and my offspring is based on weird luck. Is this the way the world should work.


John:

I am pragmatic whore. If you could convince me that there is a better more efficient economic system than capitalism, I would abandon it in a minute. Unfortunately, you nor anyone else here can do that.

Are we lucky to have been born in the greatest country the world has ever known? Hell yes. That's the way the world works, sometimes you're the windsheild, sometimes your the bug.
 
Cynic
Of course, the question is, "efficient at doing what?"

While not exactly high caliber, I'm curious what you think of this:

http://www.post-g...56-150.stm
 
seeker
Isn't it funny though how the best years of our capitalist system occurred when we were the most communist and its worst years occurred when the market was most open.
"Those who cannot remember the past are condemned to repeat it." - George Santayana
 
Bob of QF
seeker wrote:
Isn't it funny though how the best years of our capitalist system occurred when we were the most communist and its worst years occurred when the market was most open.


Indeed.

For a very fine example of completely unregulated capitalism?

I submit for your perusal, the illegal drug trade in the US.

This trade is strictly cash-on-delivery, the capitalist's nirvana. There are zero government regulations over the product, strictly market-driven. The price is set by the supply-and-demand forces, too, mostly demand. There isn't even an import/export tariff to worry about.

Ain't it a lovely picture of pure capitalism at work, too? Driven entirely by the profit motive, without a single regard for health, safety, well-being, or any of that liberal shit.

The illegal drug manufacturers even respond to the demands of their market, too: ever seeking an improved product, capable of meeting the desires of their customers in ever smaller doses.

All true conservatives should look to the illegal drug trade, with admiration and envy. Perhaps they should use it as a model for their goals, too.
Quantum Junction: Use both lanes

Reality is that which is left, after you stop believing.
 
Bob of QF
(in case there is any doubt? The preceding comments were entirely in a sarcastic context... )
Quantum Junction: Use both lanes

Reality is that which is left, after you stop believing.
 
catman
Personally, I thought it was a fine example.
"If I owned both Hell and Texas, I'd live in Hell and rent out Texas." - General Sheridan
 
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