| Enslaving The Free Market |
[Sep. 21st, 2008|12:19 pm] |
I love capitalism. I know I often sound like some kind of bizarre left-wing fascist, but I'm not a socialist. I support the free market economy. If it's done properly, a capitalist free market empowers the consumer. It's a kind of economic Darwinism. Companies compete for the money of the consumers. To that end, the price and quality of the product must attract the consumer. As such, in the proper free market, the consumer gets better products at lower prices. Meanwhile, the company that has been smart enough to thrive in these conditions becomes richer and richer, while companies that have made foolish decisions file for bankruptcy and die.
Recently, George W. Bush let us know just how much he hates the free market. The recent downward spiral on Wall Street, the result of corporate stupidity, is nothing new. Lehman Bros., Merril Lynch, and AIG were all preceded by the likes of Fanny Mae. Their policy towards sub-prime home loans was to give giant loans to people with no collateral. I can see no negative repercussions to giving loans to people with no means of paying you back! I normally don't have a problem giving business loans to small businesses with little or no collateral, but often these businesses have to prove to the bank that they can be profitable. But these were home loans, not business loans. Let's cut through the bankspeak and figure out what these companies did. They lent large sums of money, which was earmarked for purchasing a home, to people that they knew had little or no means of paying them back. You could call this charity, but I would point out that most actual charities that do this give out business loans, not home loans.
In short, these companies did something tremendously stupid which flies in the face of basic common sense. In response to this stupidity, the invisible hand of the market has throttled them to death. Welcome to the free market. You were an idiot, you failed, you are now poor. But wait, the federal government will come to the rescue! Yes, your stupid stupid ideas have cost your stockholders a fortune, but now you can also cost the taxpayers a fortune by having the federales save your sorry ass! People talk about "market corrections," but that only means something if the market is actually permitted to correct a mistake. By bailing out these companies, the federal government is not only allowing them to continue being stupid, but they are letting other companies know that it's perfectly okay to be equally retarded with your investors' money. And now more and more people can lose more and more money on the stock market. And not just the stock market, since these federal bailouts are being paid for with taxpayer money. I fail to see how any of this is good.
I would call this a market correction if the companies in question just tanked and let everyone in the financial sector know that if you do stupid thing, your company fails. Instead, these companies are being saved (at our expense) so they can continue to waste money on terrible ideas. A free market is one in which companies compete for the money of consumers and investors. What we have now is not a free market, it's a corporate market. The companies will get your money, irregardless of anything they do. In the free market, the consumers get better products from the better corporations, which causes consumers to buy more from that company, which drives profits up, and everybody wins. Consumers get better stuff, corporations get more money. Free markets are good. In this corporate market, the corporations can do whatever they want, and if we don't give them money because they're idiots the government takes the money from us and gives it to the corporations anyway. Consumers lose money, corporations get money. The corporate market screws us over. Is this why we were fighting the communists? Is the annihilation of the middle class a sign of a strong economy? Aren't Republicans supposed to support a capitalist, free market economy? What the Hell are we doing?! |
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| Comments: |
Personally, I'd be more positive about the situation if the following actions were taken.
Each "bailed" company immediately sacs its CEO and board of directors with no severance or pension. Even if we're bailing out the companies, that'll at least make the CEOs think twice about what happens when they bork it up.
For the next 8 years each "bailed" company has to record all board/CEO meetings and post them on Youtube. Failure to do so will result in another sacking as detailed above. Sure, that'll give their competition an edge, but their competition already had an edge as they weren't dumb enough to implode.
I'd call for a public flogging or two as a reality TV special, but I think even that's going too far.
Reading that made me think of the credits for "Monty Python and the Holy Grail."
-"Those responsible for this economic catastrophe have been sacked."
-"We would like to apologize for failing to fix this problem. Those responsible for sacking those originally responsible have also been sacked."
We could just give the money to the people who are falling into debt because these companies screwed them over. That would probably turn out to be cheaper and more effective. Or they could just give $200,000 to every man, woman, and child in the country. And there used to be laws that made this kind of corporate nonsense a federal offense. Those laws were repealed when "someone" thought that deregulating the economy would only result in good things. Of course, I've heard different versions of that story so I don't know if the laws were repealed 7 or 50 years ago.
According to my calculations giving $200k to every man, woman and child would cost $60t dollars. However, turning the $700bn bailout into cash for the populace would be $2324 for everyone in the country if divided perfectly evenly. Of course, that's $41.8k for that family of 18. The deregulation started in 1994, and reached it's peak in 1999. The interesting bit being, this occurred on Clinton's watch. http://www.wsws.org/articles/1999/nov1999/bank-n01.shtml
I'd check the timing of that. Was it during that period that congressional Republicans threw a hissy fit and stopped working, effectively paralyzing Washington? | |
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