"Wall Street failed America," CFTC Chairman Gary Gensler told Mr. Cho. That comment could apply to countless aspects of the economy these days. "And Washington's regulatory system failed America. And if we don't fix it, it's going to happen again."
The essential similarities between the oil fiasco and the larger financial crisis are striking. Both episodes showed us the same cast of characters—Goldman Sachs, AIG and the rest—taking advantage of deregulation.
And the whole rotten thing was then defended by the same bunch of
free-market wise men, who brushed off doubts with a condescending laugh and a snort of indignation. How little critics know about the fantastic complexities of markets. And how arrogant they are as they threaten our freedom to speculate.
http://online.wsj.com/article/SB20001424052702303411604575168162988817630.html?mod=dist_smartbrief
Free market wise men!
Free market with the key word being
free has almost in use of terms such as above become as meaningless as the blanket charges of racism, socialism, communist, wing nut, right winger, et al as they are meaningless buzz words driven more for their effects as strawmen or red herrings. Their use rarely if ever have anything to do with real, intelligent and thoughtful conversation. Same here is true in the often used term
free market as used by bothsides of the 2 party political construct and even variations of the political side projects. As Anna Morganstern at the above link asks in her way, what does free really mean? and the focus should be on that term and not the term market. You could ask, if there is a
free market, is there an unfree market or what would an unfree market look like?
Unfree meaning restrictive in some form or fashion might mean that a marketplace is limited as to who can enter. That can be achieved by those in the marketplace already going to a entity whose job it is to regulate said marketplace to pass rules for market entry and the current market businesses support such overreaching regulation because it grants a type of protected cartel or monopoly in the form of captive customers. What restrictions would UPS agree to, even encourage if such restriction meant FedEx goes out of business and that customer base only can come to UPS? Same is true if you revese the roles of UPS and FedEx! Would either case be an action of the
free market? If you were on the bad end of this deal and looking for a job, would you think it a
free market? Would you think a gov't action well beyond any action good or bad done by your company in the market that forced you out of a job while benefiting the jobs of others was an action of a true
free market? What if said gov't even taxed your unemployment or new job wages and took those tax dollars and gave them to the very competing business that benefitted from your earlier employment demise. Again, is that what you believe is definded by the term
free market? If you think my example is way over the top then take a close look and talk to employees at both Goldman Sachs and now the defunct Lemen Bros. Who determined who won out and who lost longterm? Was it the market or was it another entity? If left to the
free marketplace to decide, who would have won and lost?
Later, these same well connected companies through political connection do in fact obtain deregulation for themselves from such regulatory control but if one reads the law, one finds those same regulations are still in place to any new company that might try and enter that market place. True deregulation would mean all barriers come down, the agency abolished and the shelves and volumes of the US Code decrease in size.
To simplify, if a number of local farmers opened a small marketplace to sell their vegetables and buyers and sellers were free to buy, sell, enter or live the market place at will, I think most reasonable people would call that a
free market. This is still a regulated market because the basic laws against thief and other type fraud apply but what if the farmers in the original market barred any more farmers from entering their market, would you still call that a true
free market? What if these farmers got certain common law violations that result in criminal consequences to now be treated in another law arena created by gov't that limits liability especially in the threat of criminal sanctions of direct lost of property. If a customer enters said market and commits a fraud against the farmers, the customer will likely face criminal sanctions (arrest, imprisonment) but farmer (whose now a corp. fiction, State granted title) doesn't face like results in a like fraud so is this a true
free market?
To those coming and going as customers, it may have the feel of a
free market but are they being deprived the option of access to all possible goods available? If the customer could just go down the street and do business with the restricted farmer, it might not be to bad but what if those farmers in the original market could use a 3rd party who had the power of force to keep that other farmer from selling his vegetables altogether, would we still call all of this a
free market? Ever hear of the lone vendor selling his wears in the public space whose forced out of business by the 3rd party enforcers because lone vendor doesn't comply with the market entry rules setup with the 3rd party as a means of cartelization of the surounding market players? Is this a
free market?
What if times got bad, real bad, and the original farmers in the first marketplace went to the 3rd party who held the power of force and got them to go to each market customer, extract a said amount of money or take out a loan in the name of said market customers making them the debt holder and giving said monies to the market farmers who were in trouble. Is that
free market? What if the outside market farmer was also in trouble but unlike the other farmers who got loans, this farmer was denied, he went bellyup and lost his farm and the surviving farmers were able to absorb his market share boosting their own profit bottomlines. Is that
free market? Did these farmers sustain, profit and grow in a true fair and equal marketplace or did they benefit purely by virtue of priviledge and the welfare from others?
I find it interesting what so many on
numerous sides of political and economic debate these days call "The
Free Market" either in a badge of honor they wear or as a whipping boy to achieve some political advantage. Being your tag of unionman I'm sure you've heard the old saying that unions are not
free market or anti-capitalism and to the capitalism part, that's likely true but in the case of
free market, it is not
true! This being true of a true
free market, then what do we call a marketplace who sez the right to contract is a priviledge only extended to certain actors in the market, not to all actors in the market? Here's a goodie, can an individual actor make his/her own employment contract in the UPS employment marketplace or does a 3rd party enforcment entity (with union monopoly blessing) by law bar such actions? Is this true
free market in the workplace? OOOpppppssssss!!!!!!!!!!!!! So much for the betterment of the worker, only if said worker buys our product.
I find it fascinating to hear people decry the
free market and the evils and dangers of the
free market, the need to protect the people from the evil doers in the
free market. Yet, it's the "evil doers" who not only don't want a
free market but encourages you at everypoint to resist knowing, undestanding and demanding a true
free market because in such a marketplace, those very evil doers people always fret about but whose business models won't sustain because they are built on priviledge, advantage and manipulation of 3rd party intervention (Gov't) and without the coersion and force of gov't, they would likely not exist at all.
Now the real question, are you in fact one of those evil doers, the enslaver of others in order to manipulate the system for your own benefit because your way of life outside the use of force and coersion is not sustainable on it's own in a true
free market?
Capitalism verses The Free Market
